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Amazon Innovation Strategy: An Analysis on Utilization and Application of Design Thinking

Question

Task:Generally, innovation initiatives within a parent organisation are driven by an innovation strategy. An innovation strategy is a subset of an organisation’s overall strategy. The innovation strategy describes the future development an organisation’s innovation capabilities and the future direction of its innovation activities. An organisation’s innovation strategy does not exist in a vacuum, it responds to a specific set of circumstances including innovation trends and provides an important context; direction; guidance; monitoring and facilitation of an organisation’s innovation initiatives. Thus, organisations take care to diagnose the organisation’s circumstances including innovation trends to inform the design and development of its innovation strategy.

Select one of the following organisations impacted by the advances of 'design thinking' or 'lean start-up' social technology:

Firm

  • Alipay (online payment platform).
  • Amazon (online shopping).
  • Cochlear (hearing implant).
  • Commbank (finance and banking).
  • Ikea (furniture manufacturer).
  • Volvo (automotive manufacturer).

Select one of the following innovation trends:

  • Design thinking (Liedtka, 2018; Liedtka & Ogilvie, 2011).
  • Lean Startup (Blank, 2013; Cooper & Vlaskovits, 2016).

Ideally, your selected innovation trend is important to the selected firm or organisation as that makes the innovation strategy report important to its senior executives, the report interesting to read and the report writing exciting.

Assesmnt task: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) or impacted 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

Introduction
This amazon innovation strategy has chosen Amazon, one of the largest online shopping sites, to understand the different facets of innovation and developing business in the most sustainable manner. This assignment focuses on Liedtka’s challenges of innovation that she presented in her paper while developing a concrete understanding on the innovation practices of Amazon in the contemporary world. In the business world, for an imaginative plan to be valuable, it must be replicable without being excessively costly and it needs to determine a specific need. Advancement is accomplished by giving something unique and is frequently observed to deliver productivity, prompting a thought that essentially influences the general society.Development is a mind boggling build and covers with a couple of other pervasive ideas, for example, innovation, innovativeness, and change. Research on advancement traverses numerous fields of request including business, financial aspects, designing, and opens organization (Uhl & Gollenia, 2016). The purpose of this report is to develop a strong understanding on the use and practices of bringing innovation to any organization and how to positively impact the business. The following content of the innovation strategy for amazon lcontains sections that develop more on this particular purpose.

Discussion
Selecting a business impacted by the advances of 'design thinking' movement as described in the paper by Liedtka(2018)
Design thinking, as elucidated by Liedtka in her popular paper published under Harvard Business Review has been one of the major documents that narrate the idea of a structure from research to rollout("Why Design Thinking Works", 2019). Her ideas and vision in analyzing different aspects and operations of any organization to improve its overall quality and outlook is highly essential for business organizations to look at ("Jeanne Liedtka", 2019). The organization that this particular report is going to focus on is Amazon shopping. This is one of the major shopping sites that is extensively used by millions of people worldwide.

Succinctly introducing the selected organization and selected innovation trend
Amazon being a large scale company houses several products from a diverse range of companies. The online shopping site is one of the prime and most preferred shopping destinations for people who tend to shop from the comfort of their homes. Amazon has adapted various strategies and innovation practices that helped them improve their business and cater to the diverse and changing needs of the customers in the world.

One of the innovation trends that Amazon brilliantly put into practice was the innovation of voice search. The invention of Alexa has changed the whole dynamics of the voice search engines ("Council Post: Eight Trends That Amazon Made Better", 2019). The company’s massive platform that offers thousands of products was hugely benefited by the introduction and design of voice searching.

Succinctly defining the following concepts and their relationships:

  • The organizational environment- the organizational environment refers to the entire ambience of the organization that plays an important role in building strategies, governing employees, administering works and managing all departments. It is linked with the workplace culture and contributes to the overall success of the organization. Amazon’s organizational environment helps the organization to think creatively and bring out the best strategies and innovation to shape their future in the most profitable way ("Innovation Lessons from Amazon", 2019).
  • Innovation trend- innovation in simple terms refers to the new ideas, new thinking, creative visions that are shaped through mediums of work or instruments. Innovation trend is actually the introduction of innovation as per the society trends that help in suiting the needs of the stakeholders in an organization for a certain period of time(Blom, 2015). Innovation trends do change with time and new innovation takes the place of the old ones, thus continuing the trend with new ideas and vision and methods of workings. Innovation trends in Amazon have been notably successful from all areas and aspects. Major trends that shaped the company are- cloud computing, one click ordering, voice searches, two day delivery, online reviews etc.
  • Innovation strategy- this implies to developing the market, profit rates, and ongoing activities of an organization by improving service innovation. It simply refers to developing and upgrading the technology that is used to cater to the stakeholders. As a strategy, Amazon keeps upgrading their ongoing technology and also introduces new ones, for instance Alexa in voice search.
  • Innovation capabilities- this is the ability or the capacity of an organization to transform a vision or an idea into practice or a mode of work that carries economic value (Dangelico, Pujari & Pontrandolfo, 2017)). Amazon, as a company that tries to cater to a diverse range of customers, enables their ongoing services to amalgamate with new ideas and also create something new out of it. All Amazon’s innovation has been highly eco-friendly and economically profitable.
  • Innovation value creation and capture- innovation value creation refers to the evolution and development of sales process, customer segmentation, and to allocate the right resources effectively to reach better profit scales. This involves utilization of all digital tools and strategies at the fullest potential. Contrary to this, innovation that is used to capture some amount of value that is provided in all transactions is the innovation value capture("Capture More Value", 2019). Amazon has concentrated on both the aspects that help them to develop their practices with the effective use of technology and also save the sufficient revenue that is required for future development.

Succinctly describing how the creation of an innovation strategy ensures strategic alignment within organizations and why it is important.
Innovation strategy is highly essential for all business organization that aims to maintain their competitive advantage and maintain market position. The creation of an innovation strategy refers to the improvement and acceptance of the best and most updated digital and technological inventions and instruments to expand the company’s target market, shares of profit and customer base. It must be noted that the right ways of innovation strategy helps an organization, for instance Amazon in this particular case, to develop various aspects of the business and also help in fulfilling the objectives of the organization and achieve goals (Dolata, 2017).

It must be noted that aligning the innovation with the company’s strategies help to meet the requirements and changing needs of the stakeholders. It also helps in creating customer value and retains customers in the highly competitive and changing market ("The importance of linking strategy with innovation | Innovation Management", 2019). The creation of the innovation strategy does ensure strategic alignment and helps the business to fetch new opportunities and develop the existing operations in more than one way.

Analyzing the impact of the selected innovation trend on the selected organization by applying at least one strategy tool to analyze the impact, opportunities and threats to the organization
The innovation trend that was discussed earlier in the report is related to Amazon’s use of the voice search. The organization initially introduced this small gadget through which voice searches could be made and named it Alexa. However, as a innovation strategy the organization brought various changes to the way the voice searches are working in the current days. it is rightfully stated by Brian Deagon that this has become a money making machine(Deagon, 2018). Various scholars and social anthropologists are stating that the introduction of such features is not right as it eradicates organic human conversations and develop somber conversations that lead up to the lack of effective communication across various cultures. However, the impact of the innovation trend on Amazon has been highly positive and beneficial as the trend has earned million for the said company.

This particular section of the innovation strategy for amazon calls for the mention of the business model canvas by Farrell(2015). According to the canvas, the scholars mention about the nine primary blocks of business that needs to be noted to successfully channel the business (Farrell, 2015). The block of Customer Relations as a tool of the canvas can be applied in relation to the innovation of Amazon. It must be noted that the customer relationships is one of the most important facets of the success of any business and the trend of the voice searches has drastically improved the company’s customer relationships by satisfying many customers and providing them a new and interesting way of communication and shopping. Irrespective of many opportunities of digital and technological development, the only threat could be the backlash from many customers who are not happy or satisfied with the innovation of voice searching that is extensively used by Amazon.

Recommending how the organization’s innovation strategy best responds to the innovation trend by answering the following questions.

How should the organization organize its innovation activities?
Organizing the innovation activities are very important for any organization, especially for Amazon due to its massive range of production and market share. The innovation activities can be organized by developing an innovation centric department that is dedicated to specifically look into the innovation opportunities and how to bring them in the most effective manner(Daspit, Andreini & Bettinelli, 2017). The innovation activities need proper treatment and attention from experts in the field of technology, science and digital media.

What additional innovation capabilities should the organization develop?
Innovation capabilities, as discussed earlier are the abilities of the organization to produce more innovation strategies that inherit an economic value in them(Cooper & Vlaskovits, 2013). The organization can easily develop the new and emerging ideas into the products and features of the organization. The new ideas can be the new ways to treat and satisfy customers. The facilities and prerogatives that are enjoyed by the customers can be modified and updated for better outcomes.

What innovation initiatives should it pursue?
The company must stay open to the opportunities and options in adapting new ideas and visions to improve their innovation strategies. Taking proper and effective initiatives in transforming the new ideas into services and products is what the core idea of bringing innovation is all about. As recommended earlier, the innovation department must look carefully into the opportunities and take initiatives in accepting the best and most effective initiatives to nurture and develop their ongoing services (Blank, 2013). Adapting the best research and digital ideas can be a good initiative in knowing the updated and most tech friendly processes of transforming ideas into activities.

How should the organization ensure that it creates and captures value from the innovation?
The organization needs to segregate a certain amount of money from all their transactions in order to capture value. This amount can be added to the overall revenues and also be used to modify and bring changes to the ongoing operations that can help in developing the overall outcome of the company. The new ideas and thoughts need to be well assessed first and analyzed on the basis of its capacity of holding a certain economic value that can be beneficial after the innovation is put into practice.

Business Model Canvas of Amazon

Business Model Canvas of Amazon

Recommending how the organization best ensures strategic alignment to address the innovation trend.
Each of the organization’s operations and goals are required to be aligned with the innovation strategy. This is done to create a system of overall development in the organization. The organization can introduce innovation that only suits their vision and goals of satisfying the customers by looking at the changing needs and demands of the customers worldwide. Addressing the innovation trends will help in looking at the development and evolvement of the digital and technological tools and strategies that are going to cater to the fulfillment of the objectives.

Conclusions
This amazon innovation strategy has shed a lot of light and information on the ideas and concepts of bringing innovation in the organization. It also gives various insights about innovation strategy, innovation capabilities and multiple value creation captures. It can be concluded that using innovation strategies like strategic alignment can prove to be beneficial for the profitability of the organization.

  • It is recommended in this innovation strategy for amazon that the company must carefully look into the customer relationship areas before introducing any other innovation strategy.
  • It is also recommended that the company must take special attention to understanding the various ways through which the innovation team or department can fetch ideas and transform them into creative practices.

Satisfying the customers can be the only way to achieve goals and attain objectives. It has been observed through the report that innovation is an essential thing in business that keeps the business moving and brings profit. It is equally challenging to identify the right innovation and apply them practically. An innovation strategy to a great extent have been the biggest factors for each and every organization around the globe for increasing sustainability. Thus, it can be concluded in this innovation strategy of amazon that the rising trend of innovation is both beneficial as well as profitable. Amazon innovation strategy assignments are being prepared by our quality management assignment help experts from top universities which let us to provide you a reliable online assignment help service.

References
Blank, S. (2013). Why the lean start-up changes everything. Harvard Business Review, 91(5), 63-72

Blom, E. R. (2015). Reframing Strategy Tools: The design of a new tool the development of innovation strategy.

Capture More Value. (2019). Retrieved from https://hbr.org/2014/10/capture-more-value

Cooper, B., & Vlaskovits, P. (2013). The lean entrepreneur: How visionaries create products, innovate with new ventures, and disrupt markets (Second ed.). Hoboken, New Jersey: Wiley.

Council Post: Eight Trends That Amazon Made Better. (2019). Retrieved from https://www.forbes.com/sites/forbestechcouncil/2018/08/31/eight-trends-that-amazon-made-better/#6a8fedc969e0

Dangelico, R. M., Pujari, D., & Pontrandolfo, P. (2017). Green product innovation in manufacturing firms: A sustainability?oriented dynamic capability perspective. Business Strategy and the Environment, 26(4), 490-506.

Daspit, J. J. (2017). D. Andreini and C. Bettinelli: Business model innovation: from systematic literature review to future research directions. Journal of Management & Governance, 21(3), 785-792.

Deagon, B. (2018). Amazon's Alexa Is Shifting From A Clever Gadget To A Money-Making Machine. Retrieved from https://www.investors.com/news/technology/amazon-echo-alexa-smart-speakers/

Dolata, U. (2017). Apple, Amazon, Google, Facebook, Microsoft: Market concentration-competition-innovation strategies (No. 2017-01). Stuttgarter Beiträge zur Organisations-und Innovationsforschung, SOI Discussion Paper.

Farrell, C. C. (2015). Designing school systems to encourage data use and instructional improvement: A comparison of school districts and charter management organizations. Educational Administration Quarterly, 51(3), 438-471.

Innovation Lessons from Amazon. (2019). Retrieved from https://hbr.org/2008/05/innovation-lessons-from-amazon

Jeanne Liedtka. (2019). Retrieved from https://thisisdesignthinking.net/author/liedtkaj/

Liedtka, J & Ogilvie T. (2011). Designing for growth: a design thinking toolkit for managers. New York: Colombia Business School Publishing.

Liedtka, J. (2018). Why Design Thinking works: It addresses the biases and behaviors that hamper innovation, Harvard Business Review, 96 (5): 72-79.

The importance of linking strategy with innovation | Innovation Management. (2019). Retrieved from http://www.innovationmanagement.se/imtool-articles/the-importance-of-linking-strategy-with-innovation/

Uhl, A., & Gollenia, L. A. (2016). Digital enterprise transformation: A business-driven approach to leveraging innovative IT. Routledge.

Why Design Thinking Works. (2019). Retrieved from https://hbr.org/2018/09/why-design-thinking-works

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