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Amazon Business Strategy: Impact Of Design Thinking

Question

Assessment Tasks: You are required to write a 2000 word innovation strategy report to the board of your selected organisation. Your innovation strategy report must:

  1. Select a business impacted by the advances of 'design thinking' movement as described in the paper by Liedtka (2018) orimpacted by the advances of 'lean startup' movement as described in the paper by Blank (2013).
  2. Succinctly introduce the selected organisation and selected innovation trend.
  3. Succinctly define the following concepts and their relationships: the organisational environment, innovation trend, innovation strategy, innovation capabilities, innovation value creation and capture.
  4. Succinctly describe how the creation of an innovation strategy ensures strategic alignment within organisations and why it is important.
  5. Analyse the impact of the selected innovation trend on the selected organisation. You should apply at least one strategy tool to analyse the impact, opportunities and threats to the organisation. Use the business model canvas by Osterwalder and Pigneur (2010) to support your analysis and argumentation.
  6. Recommend how the organisation’s innovation strategy best responds to the innovation trend by answering the following questions.
    • How should the organisation organise its innovation activities?
    • What additional innovation capabilities should the organisation develop?
    • What innovation initiatives should it pursue?
    • How should the organisation ensure that it creates and captures value from the innovation?
  7. Recommend how the organisation best ensures strategic alignment to address the innovation trend.

Answer

Executive Summary
An innovation strategy is known to be a subset of the overall strategy of any business organisation. The future development and future direction of the innovation capabilities of an organisation are described by its innovation strategy. This amazon strategy and business development focuses upon how Amazon has been impacted by the advances of design thinking social technology. Various concepts of innovation and creation and capturing of value within organisations have been explained in detail. The innovation strategies, strategic alignment and the overall impact of the design thinking been explained thoroughly. Finally, recommendations in this Amazon Business Strategy have been provided related to how the selected organisation can respond to the innovation trend in the best possible manner. Amazon has been quite successful in ensuring strategic alignment for addressing the innovation trend but there are further measure it would need to take for gaining a competitive advantage. Attention should be paid towards organising the innovative activities. Business strategy for amazon should be made by changing the organizational structure of working with innovations and innovative ideas should be implemented as well.

Introduction
Thinking of a crazy retail giant and leader, Amazon is what comes into the mind. The company, which was primarily a bookseller, has established itself in nearly every industry like publishers, inventory management, wireless communications, retail, tech devices, fashion and apparels and much more. The current time is the peak season, when such large online retailers of the world are working hard to serve and satisfy the growing needs and demands of the customers. The various innovation which have made Amazon a better company and can be referred as its secret to success are voice search, cloud computing, automated stores of brick and mortar, one-click orders, online reviews, reading and books, two-day delivery option and personalized customer experiences. A process for solving problems for drafting the business strategy for amazon in a creative manner is known as design thinking. According to Liedtka (2018), design thinking involves seven steps along the way from discovery of customers to generation of new ideas to the innovation otucome itself. These seven steps namely are: Immersion, alignment, sense making, articulation, emergence, learning in action and pre-experience. Design thinking usually has a human-centred core and it encourages companies for focusing upon the people for home products, procedures and services are created and improved. Design thinking is used by business organisations for finding compelling new and emerging solutions to the problems of all sectors. It is an iterative procedure where options are challenged, and problems are redefined in an attempt of identifying alternative solutions and strategies which might not be a parent and instantly of bears with the initial level of understanding of an organisation.

Concepts
Organizational environment: Organisational environment are constituted of Institutions or forces that surround in organisation or a business which impact the resources for operations and performances. The organisation environments include all the elements which exist external of the boundaries of an organisation and have the potential of impacting one for all of the functions of a business (Alexiev, Volberda, and Van den Bosch, 2016). For instance, organisational environment include customers, competitors, pressure from general public, suppliers and government regulatory agencies. There is a high need of understanding the overall environment properly for the managers for ensuring effective management of the organisation or business. The environmental factors have been divided into two parts by Scholars and researchers, namely external and internal environments.

The internal environment of an organisation includes the conditions, factors, events and entities which are within the business and impact the activities and choices of the organisation. The strengths and weaknesses which are found within the business are clearly exposed. The factors which are usually considered a part of the internal environment of an organisation consist of the culture of the organisation, employee behaviours, leadership styles and the mission statement.

The external environment of an organisation or a business includes the conditions, factors surrounding the business, events and entities which impact the activities and choices of the business and also help in the determination of the threats and potential opportunities to the business. It is also known as the operating environment of the business. The examples of external environment factors which affect an organisation are economic conditions, competition, government regulations, public opinion and customers.

Innovation trend: Innovation basically means creative thoughts, new imaginations and new ideas in the form of methods or devices. Innovation is also seen as application of the better solutions which meet the new requirements, existing requirements of the market or unarticulated requirements. Such innovation takes place by the provision of processes, Business models, Technologies, services or products which are more effective and are made available for the society, Markets and governments. Innovation is something which is more effective and original and as a result breaks into the society of the market because it is new. Innovation might be similar to but is not exactly the same as invention. As we are entering the second decade of the 21st century, innovation has rapidly started to become an important driver for organisations in context of business strategies (Andreassen, Lervik-Olsen, and Calabretta, 2015). However, most of the businesses have been struggling when it comes to understanding the concept of innovation. As a result they are unable to be more innovative and in moving forward towards innovation. One of the latest trends of future innovation which can help business organisations in gaining a competitive edge are: innovation would be defined by organisations with their environment, a strategic innovation plan would be created by Business organisations for ensuring that innovation transforms into a strategic imperative, a culture for continuous innovations for the reduction of the ad hoc approach towards innovation would be created by businesses, etc.

Innovation strategy: An innovation strategy is known as a plan for growing overall profits and market share by the means of bringing innovation into products and services (Teece, 2010). While looking at the strategy of innovation from the context of jobs to be done, vital strategies should significantly inform which job, segment and job executed should be targeted for achieving the highest level of growth and which can meet requirements should be targeted for helping customers in getting the job done in a better way. When the question is about the creation of a better business strategy for amazon, strategy innovation should also indicate whether a breakthrough innovation approach, a disruptive innovation approach for a product improvement approach is the best option. However, most of the strategies of innovation in this context unfortunately which is the primary reason for low success rates of innovation. Innovation strategy is not about the selection of activities for pursuing which are distinct from the market competitors. Instead, it is the creation of winning products which means making products for a better market, meeting a specific customer segment which is more profitable, addressing the right set of unmet requirements and helping customers in fulfilling their needs.

Innovation strategy for amazon

Innovation value creation: One of the primary objectives of any business organisation is value creation. Creation of value for customers selling services and products while at the same time bringing creation of value for the stakeholders in the form of inclined stock prices ensuring the availability of capital investment in the future for fund operations (Adner, and Kapoor, 2010). From the financial view point, business organisation earns return on capital or revenue, which exceeds the cost of capital of the total expenditure, value is said to be created (Sanchez, and Ricart, 2010). The primary purpose of drafting a better business strategy for amazon is the creation of business value. You can be defined in various different ways like turn off new services and products, reduction of cost or incremental improvements in the old or existing products.

Innovation value capture: In order to arrive at a better amazon strategy and business development, an understanding of the understanding, a thorough understanding of value capture and value creation is required (Austin, and Seitanidi, 2012). Collaboration among the independent and distributed actors that rely on the capability of each other for the capture and creation of value is required for open innovation. Open innovation value is driven by all the actors involved in value creation as well as their capability of capturing value (Johannessen, and Olsen, 2010).

Creation of innovation strategy ensures strategic alignment within organizations and importance: The process of linking the strategy of innovation of a business organisation along with the goals, objectives, corporate vision and the strategies of the organisation is known as strategic alignment. The amount of time and cost which is required for the creation of a new service or product is so huge that a perfectly executed and aligned strategy of innovation can become extremely wasteful. A business organisation can pursue any opportunity which it wants however; it might not be able to afford pursuing all the opportunities which it wants. Strategic alignment helps in the creation of a directional beacon which defines the necessary domains to be explored and the ones which should be avoided. The creation of an innovation strategy helps in ensuring strategic alignment within the business organisations. Such strategic alignment and creation of innovation strategy is quite important for various reasons. It helps in necessarily emphasising upon the right areas during the right period of Time. It helps in reducing and abolishing the redundancies of the workplace and in the elimination of the conflicting priorities. Strategic alignment helps in the increment of communication and coordination within the business. The competitive advantages and capabilities of a business are clarified.

Impact of design thinking on Amazon: The design thinking of Amazon has been successful because it has used the four important principles which are embodied by the greatest shopping experiences. The retail Giants of the world emphasize upon making the purchase and pricing procedure clear and easily understandable. At an initial glance, the shopping experience of Amazon does not appear to be as transparent as it should be. When the dynamic pricing model of Amazon is taken into consideration, which is much similar to that of the hotels and airfares, the business has been criticized in insignificant transparency which caused them to be imposed with fines. One of the possible reasons for the customers of Amazon being fine with dynamic pricing is that the prime service of Amazon has helped in solving two primary obstacles that are most common in online shopping. These obstacles are the perception that retail shopping is faster than online shopping and the hidden cost of shipping. The prime service of Amazon has helped in elimination of these two obstacles. The success of prime is dependent upon the effortless mental model design. The customers are easily convinced for paying yearly fee and getting free two day shipping. The design thinking achievement for shopping of Amazon is enabled by the mental model of the company's transparency of prime. The elegance as well as simplicity of the patent of Amazon related to one click purchases is one of the most notable design thinking achievements of the company.

Response of Amazon’s innovation strategy to innovation trend: Organisation of the innovation activities is one of the basic functions of management of any business. Amazon can work upon increasing the education level of its employees, since the knowledge and information related to the current trends as well as a basic overview within the retail field create the basis for innovative ideas. With the help of such aspects, the employees of Amazon can easily find a Blue Ocean within a dynamic and competitive environment. Another important aspect which Amazon need to focus upon is the motivation of its employees. In order to come up with new and innovative ideas, the employee should be motivated in a positive manner. For business like Amazon, the creation of an incentive program where the primary focus would be placed upon innovative ideas is quite important. The creation of the incentive program should be implemented on the basis of the actual requirements of the employees who should be provided with rewards for coming up with innovative ideas on a predetermined criteria basis. The primary factors which would help in the organisation of the innovation activities of Amazon are teamwork, management support, resources like material, financial and human, correct delegation for assignment of responsibility and authority and optimal placement of employees.

Amazon should focus upon developing various other innovation capabilities. These are, evaluation of benchmark and innovation readiness against the best practices, building capabilities for launching and defining new growth businesses, creation and renewal of an innovation culture with a brilliant set of skills, committed leadership and a shared vision, improvement of the overall customer centricity by the means of organisation around the jobs to be done of customers, development of innovation leaders of the next generation and establishment of a governance system that would help in enabling smart and fast decision making.

The various innovation initiatives which Amazon must pursue are payment mechanisms and a mixture of other Technologies, usage of wearable computing, employment of social media analytics for optimisation of inventory efficiencies and product assortment online for serving the customers in a better way. The Other initiatives include offering various functionalities of e-commerce like advanced search options, inventory lookup and navigation features. Finally, Amazon should implement complete system integrations that would work well with the legacy systems which are not able to communicate. Implementation of an integrated platform would help in allowing the company further differentiation of its brands while at the same time improving upon its operational efficiencies.

There are various ways of ensuring that value is created and captured by Amazon from innovation. These days are primarily related to efficiency, complementarities, lock in and novelty. The internet always makes it possible for increasing the efficiency of production services and various ways. One of the most of the obvious is its capability of reducing the information asymmetry between the sellers and buyers. Value creation can be leverage upon by companies like Amazon for its products when it can bundle them with other complementary products from external suppliers. Lock in refers to the capability of a model of business of prompting its users and customers for engaging into repetition of transactions. Lock-in can be enabled by the means of creation of switching costs. Finally, the introduction of this amazon strategy and business development assignment, the novel services and products and procedures has always been involved in innovation. There are limitless possibilities of innovating in the way transactions are enabled by the introduction of new revenue and business models.

Conclusion and Recommendations
On the basis of the above analysis in this Amazon Business Strategy, it can be concluded that Amazon has been quite successful in ensuring strategic alignment for addressing the innovation trend, there are various measures which the company should readily take for further widening of its market share and gaining a competitive advantage of a higher level. It should provide significant attention towards organising the innovative activities. The organizational structure of working with innovations and innovative ideas should be adapted by the company. The attitude of the management of the company should be supported for organising is Innovative activities and aligning with its strategies. The responsibilities and the powers within the company for every individual procedure as well as task which are related to Innovation and innovative ideas should be determined by the business. Finally, the innovative ideas should be recorded in information system and these Information Systems should be adapted for innovation. Amazon business strategy assignments are being prepared by our help with business assignment experts from top universities which let us to provide you a reliable best assignment help online service.

Reference List
Adner, R. and Kapoor, R., 2010. Value creation in innovation ecosystems: How the structure of technological interdependence affects firm performance in new technology generations. Strategic management journal, 31(3), pp.306-333.

Alexiev, A.S., Volberda, H.W. and Van den Bosch, F.A., 2016. Interorganizational collaboration and firm innovativeness: Unpacking the role of the organizational environment. Journal of Business Research, 69(2), pp.974-984.

Andreassen, T.W., Lervik-Olsen, L. and Calabretta, G., 2015. Trend spotting and service innovation. Journal of Service Theory and Practice, 25(1), pp.10-30.

Austin, J.E. and Seitanidi, M.M., 2012. Collaborative value creation: A review of partnering between nonprofits and businesses: Part I. Value creation spectrum and collaboration stages. Nonprofit and Voluntary Sector Quarterly, 41(5), pp.726-758.

Johannessen, J.A. and Olsen, B., 2010. The future of value creation and innovations: Aspects of a theory of value creation and innovation in a global knowledge economy. International Journal of Information Management, 30(6), pp.502-511.

Liedtka, J.M., 2018. 7 steps of design thinking. [online] Available at: https://ideas.darden.virginia.edu/7-steps-of-design-thinking [Accessed on 21 April 2019]

Sanchez, P. and Ricart, J.E., 2010. Business model innovation and sources of value creation in low?income markets. European management review, 7(3), pp.138-154.

Teece, D.J., 2010. Business models, business strategy and innovation. Long range planning, 43(2-3), pp.172-194.3

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