Amazon.co.uk is a UK based online organization that was initiated in 1994. The organization is among the top 100 leading online sites in the world. Based on traffic rankings in a three month period, Amzon.co.uk was ranked ninety five in the world (Alexa n.d). On average, the visitors access an estimated 9.8 pages with each page view taking 8.6 minutes.
The online retailer retails and distributes entertainment products like music in CDs and DVDs, movies in CDs and DVDs, books, games and games consoles, tools, sports apparels, toys, phones, cameras, and general garden and home items (Alexa n.d). Amazon.co.uk competes with other online site retailers like eBay, Wal-Mart, and Amazon.com.
Other competitors include physical walk-ins in organizations that allow consumers to walk in and purchase the different goods on offer. However, the advantage of the site is that people are able to purchase the required tools and products from a single platform without movement and at their convenience. The report offers strategy choices that would be adopted by Amazon.co.uk to enhance its future operations.
Partnerships options for Amazon.co.uk
Amazon.co.uk could form strategic partnership with other organizations, brands and companies, in several ways. For instance, Amazon.co.uk can engage in technology partnership with an organization which has an already established technology with the aim of getting access to technology in new geographic regions (Watts 30).
A technology based organizations like Google can assist the organization to improvise or devise a model that would increase the loading speed of Amazon.co.uk. The update on the Amazon’s search engine would ensure that the company satisfies its customers fully. Having access to new technology improves the technological capabilities and skills of the employees (Watts 30).
According to Watts (30) an organization can enter into a technological partnership in order to gain a competitive advantage over its competitors in new markets.
Amazon.co.uk can partner with companies offering transport and delivery services (Capon and Hulbert 472). With this form of supply chain partnership (Qingyuan 318), Amazon.co.uk would deliver the products bought online in a quick and easy manner. The strategy also offers the organization a chance to utilize an already established supply chain, as opposed to establishing a new supply chain in new market area (Qingyuan 318).
Given that different transport and delivery companies operate in different areas, the partnership would offer the company new markets in a new geographical regions. This form of partnership is less expensive and Amazon.co.uk would remain as the main decision maker.
With the emergence of new markets in Asia, Amazon.co.uk can partner with China based manufacturers and suppliers to access the Chinese products available in the Chinese market. This form of partnership would offer Amazon.co.uk the opportunity to access markets in new geographical regions.
In an attempt to increase their dominance in China, the strategy would enable easy understanding of the Chinese marketing structure and the purchasing habits of the Chinese people as well as their culture. In return, the partnership would lead to an increase in sales (Sahaf 210).
The market share of the company would be increased thus leading to increased revenues and profits. Amazon.co.uk can franchise part of its business and enjoy the profits gained from new markets. This would also enable the company to expand its market share as well (Sahaf 210).
Amazon.co.uk can partner with manufacturing companies to get new brands available to its site (Begemann 36; Kunitzky 38). For instance, it could partner with famous companies like Apple Inc to have its products online. This would introduce Amazon.co.uk to new markets and customers.
Apple has a large market share in U.S and other parts of world, thus, the partnership would benefit Amazon.co.uk through new market penetration. Bringing the products to new customers would increase its customer base making it reliable and dependable thus an increase in its market share (Begemann 36).
Industry position strategic options available to the Amzaon.co.uk
As the market leader in the UK, Amazon.co.uk could create a fortress around itself. The aim of the defense position strategy is to protect product positioning, profitability and market share of the Amazon.co.uk (Kotler, Shalowitz, Shalowitz, and Stevens 2010). The organization would adopt marketing strategy frameworks like increasing customer satisfaction, customer loyalty, and brand equity.
The essence of the defense position strategy is to create industry barriers to new entrants, increase and defend its current market share, and also defend its market segments. Although it is a weak strategy which is prone to attacks from challengers like eBay, nonetheless, it would ensure that the attackers do not get stronger to attack its defense.
The organization can offer discounts, awards to its loyal customers and even purchasing vouchers to retain the already existing customers. Other means would be consolidating the available resources to the already existing markets.
Flank position: This kind of strategic positioning would involve the redeployment of the Amazon.co.uk resources with the aim of deterring any flanking attacks (Kotler et al. 2011; Malhotra 105). The choice of this strategy is because of its capacity to protect the organization from potential market share loss to competitors.
The commonly applicable marketing strategy framework would be the introduction of new brands, new products or new products lines. Moreover, the organization can also reposition the already existing products to increase its competitive advantage. Other adoptable mechanisms include increased promotions of the products sold by the organization to existing and new customers (Kotler et al. 2011). Amazon.co.uk can also undertake product differentiation and market segmentations.
This would help the company to familiarize itself with the targeted customers and also redeploy its resources towards that target. The reason for the choice of this strategy is that it retains existing customers and at the same time, helps a firm to acquire more customers thus increasing its market share, profitability, and geographical representation.
Market expansion: This strategy is the most appropriate for Amazon.co.uk. The strategy involves an expansion of the organization’s market share through different marketing channels (Hiam 28). Although the strategy is an expensive venture that requires a lot of resources, it is worth the risk. Amazon.co.uk would be in a position to increase its geographical market share and profitability.
For instance, the organization can franchise part of its business to the upcoming markets like in the Asian nations. The organization can also sell its rights to a start up or existing company thus gaining geographical expansion. Since Amazon.co.uk is part of the Amazon.com, it can branch out and start chains outside UK.
This would duplicate its plan and marketing strategies on different regions of the world hence market expansion. The most adoptable tactic for market expansion is through increased product sales in an already existing market(s) (Hiam 28). Through this framework, the organization would be able to devise new pricing strategies, improve its marketing techniques, and devise new marketing techniques.
The combination of these techniques would ensure profitability as the organization is able to retain its already existing customers in the market.
The technique ensures that the organization keeps in touch with its loyal customers hence customer satisfactions (Hiam 29). New channels of distributions could be adopted that would avail the goods and products in time. This way, it would be able to keep its competitors off its customers and market share.
Competitor reaction and strategic options the competition may counter the plans with
Obviously, competitors will retaliate upon the implementation and adoption of the above discussed strategies by Amazon.co.uk. The stronger challenger would be eBay, and as such, a fierce rivalry between Amazon.co.uk and eBay could be witnessed. Below are the likely competitor’s reactions in respect to the mentioned strategies and counter plans.
Competitors would reiterate in response to the frontal position strategy (Luffman 173). The organization would be trying to get its market share back, retain its loyal customers, and obtain customers from Amazon.co.uk. The organization is likely to get into price reduction warfare, find weakness on the positing of Amazon.co.uk, or even target the weak points strategically.
One of the strategic options is frontal attack which includes financial commitment and redeployment of organizational resources (Luffman 173). The organization should be prepared to change its marketing strategies and get in a continual war with the competitors. The organization can carry advertising assaults with new branding with the aim of attacking the weak points of the competitor. However, this strategy is an expensive venture and unsuccessful in most cases.
Nonetheless, the strategy can be adopted in advance to strengthen any weaknesses available and turn it into strengths. This strategy is applicable when defender and the attacker are involved in homogenous products market like the case of Amazon.co.uk and eBay.
Another strategy that can counter the plans is the envelopment or encirclement strategy (Cascarino and Esch 89). In this kind of offensive strategy, the target competitor is encircled leaving them with no way out (Luffman 174). The strategy is carried through the introduction of products similar to those of the competitor. The aim is to divert the competitors’ resources and invest in other products in the market.
The introduction of new products liberates the market share weakening the segments hence competitors retreat. Upon demoralization of the organizations segments, the organization can target the competitor’s markets niche. This strategy encroaches on the niche market of competitors.
The aim of this strategy is to liberate the target’s market share and adopt it as its own. The applicability of this strategy works well where there is loose market segmentation or the attacker’s resources for product development are strong (Cascarino and Esch 89). By getting the attention of the competitor, the organization would be in a position to defend itself.
The flanking attack strategy is adopted with the aim of attacking the attacker’s flanks (Luffman 173-174). The holes in flanks of the competitors are established and attacked.
The limitation of the strategy is that it requires a lot of resources to redeploy on the offensive side. Some of the flanking attack strategies include personal selling, use of discrete promotions, advertising campaigns and improving the public relations (Cascarino and Esch 89). For instance, the Amazon may develop its products to fit that particular niche with the aim of encircling the eBay niche.
By-pass is applied where frontal attacks have been deployed (Linneman and Stanton 255). This strategy is applied through product diversification, market expansion, and technological innovation (Cascarino and Esch 89). Usually, the organization uses this strategy to attack the competitor who may have more resources that the defender.
Through product diversification, an organization is able to come with new products that are new to the market (Linneman and Stanton 255). The organization can also introduce products in areas where its opponents do not have large market shares and in areas that do not have high competition.
Since organizations are involved in technological markets (Luffman 174), a bypass through leapfrog to acquire new technologies for improving the marketing platforms would be adopted (Linneman and Stanton 255). The essence of bypass is usually to broaden the resource base. Basically, imitation is not common in this strategy as diversification is the ultimate goal.
Guerrilla intermittent is adopted as a last resort. This competitive strategy involves probing with the intention of demoralizing and harassing the competitor (Luffman 174). The goal of guerrilla strategy is competition demoralization and the competitor is made to feel that competition is not worthy then they retreat (Linneman and Stanton 258; Cascarino and Esch 89).
Some of the commonly applied guerrilla intermittent strategies include price cuts, increasing salaries and wages to attract the best staff of competitors or increasing the rate at which advertisements are carried.
Preferred strategic marketing option and justification
The most preferred strategic marketing option would be market expansion. Compared to the other discussed options, market expansion though expensive is a long-term approach that would bring back profits, increased customer levels, and increased market share. An organization like Amazon.co.uk would expand its market share and customer base by adopting different methods.
Given the current position of Amazon.co.uk, it has reached its acceptable market in the UK which is the primary market. The most applicable tactics available for Amzaon.co.uk are market penetration through the application of technology and line extensions.
However, according to Paley (169) this kind of strategy is only applicable when an organization has enough capital to venture into new markets.
Based on the financial position of the organization and that of its mother company Amazon.com, Amazon.co.uk is capable of applying this kind of marketing strategy.
A new market offers an organization competitive advantage given that market penetration is well planned. Other forms of market expansion include adoption of new distribution channels, new packaging and increased product sales.
The limitation of market expansion is that it requires adequate planning and resources. An expansion strategy would enable the organization to position itself and enter into new markets like the expansive growing market in Asia. The Asian markets are well established and all that Amazon.co.uk will require is market penetration.
Market penetration can be achieved through the partnership of already existing organizations that have market share but lack the platform for its products. In this case, Amazon.co.uk would be able to expand geographically into new markets. The advantage associated with expansion to existing new markets include increased sales, profits and market share (Stevens, Sherwood and Dunn 23).
This could be achieved through altering the customers purchase patterns hence customer satisfaction and increase or offering prices that are competitive to the already existing prices in the established market.
Unlike the other strategic marketing options, the market expansion strategy is less confrontational. It does not lead to price wars and guerrilla attacks. Although amazon.co.uk is not involved in direct development of products, it can increase its sales by introducing “new products to existing markets” (Stevens et al.24).
In this strategy, the organization would add new features to its products as a way of repackaging to increase its sales. This may include putting waterproof covers to its books, CDs and DVDs. This improves the quality of the products which makes them more attractive to the customers hence consumer loyalty and satisfaction (Stevens et al. 24).
The organization can penetrate in new markets and offer new products to those markets (Stevens et al. 24). This market development strategy offers a competitive advantage as monopoly in new markets may be enjoyed where the products are not currently available. It also increases the market share as organizations are able to venture in new markets in new geographical regions (Alan and Garrod 2006).
Expansion involves the use of product or market diversification (Stevens et al.23). For amazon.co.uk to enjoy increased sales from market or products diversification, it has to understand the market or the product being diversified. For instance, Amazon.co.uk managers can associate themselves with other managers who have adequate knowledge before entering the market. This would enable the firm to understand the diversified markets well and increase its market share, profits, and revenues through increased sales (Alan and Garrod 2006).
Works Cited
Alexa. “Amazon.co.uk.” n.d. 11 Feb. 2012. < https://www.alexa.com/siteinfo/amazon.co.uk>
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