1. Amazon: Analytical Tools and Frameworks
Group 5
Patricia Martinez, Shavena Smith, Bryan Arias
10am Class

2. Chapter Overview The Strategy Canvas The Four Actions Framework
The Eliminate-Reduce-Raise-Create Grid
Three Characteristics of a Good Strategy
Reading the Value Curves

3. Introduction
In order to create a Blue Ocean, one has to create a unique and exceptional value curve
A blue ocean strategy is the simultaneous pursuit of differentiation and low cost to open up a new market space and create new demand. It is about creating and capturing uncontested market space, thereby making the competition irrelevant
Amazon’s strategic profile focuses on keeping their customers happy and customizing products that would appeal to the customer.
Market penetration is a secondary intensive growth strategy in Amazon's online retail business.

4. The Strategy Canvas
The strategy canvas is a diagnostic and an action framework for building a compelling blue ocean strategy
The horizontal axis captures the range of factors the industry competes on and invests in
The vertical axis of the strategy canvas, captures the offering level that buyers receive across all these key competing factors
To fundamentally shift the strategy canvas of an industry, you must begin by reorienting your strategy focus from competitors to alternatives, and from customers to noncustomers of the industry

5. Strategy Canvas of Amazon as of 2018

6. Strategy Canvas benefits
Shows the company’s strategic profile and how it invests in the competitive factors and possible future factors to create a BOS
Industry profile by showing the factors that affect competition among the players
Strategy Canvas benefits
Shows the strategy profile for incumbents, identifying which factors they invest in

7. Conventional Strategic Logic
Drives you to offer better solutions than your rivals to existing problems defined by your industry
With Amazon,
2 day shipping/2 hour shipping
Lower prices
Prime membership benefits (convenience, simplicity, free music & video streaming, etc.)

8. The Four Actions Framework
Eliminate
Which of the factors that the industry takes for granted should be eliminated?
Raise
Which factors should be raised well above the industry’s standard?
Reduce
Which factors should be reduced well below the industry’s standard?
Create
Which factors should be created that the industry has never offered?

9. Amazon’s Eliminate-Reduce-Raise-Create Grid
Fire phone
Any products or ideas that are of liability and do not provide much benefit to customers
Non-customer Centric ideals
Raise
More distribution centers
Sense of urgency
Product range
Small business approach
Reduce
Ideas products that don’t lead to the highest efficiency
Create
Easy access
Fast shipping
Strategic alliances
Effective fulfillment centers

10. Three Characteristics of a Good Strategy
Focus
Main attractions
Ex: friendly service, fast shipping, non brick-and-mortar so ca be easily accessed
Divergence
Differentiate their profile from the industry’s average profile; how is their strategy different from everyone else
Ex: Customer Centric
Compelling Tagline
Deliver a clear message and advertise an offering truthfully so customers will not lose trust and interest
Ex: “Work Hard. Have Fun. Make History”
Customer centric is a way of doing business with your customer in a way that provides a positive customer experience before and after a sale
Amazon’s slogan, “Work Hard. Have Fun. Make History.”

11. Value Curve
A graphic depiction of a company’s relative performance across its industry’s factors of competition.
Enables companies to see the future in the present
Companies may have to out beat competition by offering a little more for a little less

12. Blue Ocean vs. Red Ocean Strategy
Compete in existing market
Beat competition
Capture more of existing demand
Make the value/cost trade off
Blue Ocean
New market creation
Make competition irrelevant
Create new demand
Disprove the value/cost trade off

13. Over delivery without payback...
The strategy canvas signals that the company may be oversupplying its customers, offering too much of those elements that add incremental value to buyers
The company must decide which factors to eliminate and reduce to construct a divergent value curve

14. Strategic Contradictions
Where a company is offering a high level on one competing factor while ignoring others that support that factor
Ex: investing heavily in making a company’s website easy to use but failing to correct the site’s slow speed
Amazon promotes eating healthy with the Prime subscription; members are able to purchase food on Prime Now from their local Whole Foods Market and receive their groceries within 2 hours. This only works if there is a Whole Foods Market in reasonable distance.
Strategic Contradictions is offering a high level on one competing factor while ignoring the rest that support one factor. For an example, a company can focus on improving their website so it’s easier for customers to use but ignore the website’s slow speed. With our company Amazon, they have a Prime Subscription which allows you purchase food from their local Whole Foods Market and you will receive it within 2hrs. However they ignore the facts of the customer having a Whole Foods Market in a reasonable distance

15. What is An Internally Driven Company?
Is the company’s strategic vision built on an “outside-in” perspective, driven by the demand side or an “inside-out” perspective that is operationally driven.
“Inside-out”
“Our vision is to be earth's most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online.”
Amazon’s placement is built like an inside out perspective. They focus more on their customers then their profits. You can tell just by reading their vision which states, “Our vision is to be earth’s most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online.”

16. Conclusion
The Strategy Canvas and EERC Grid are valuable tools for for analysis, visualisation, and communication; they predict how the company will be profitable in the future compared to others in the industry.
Blue Ocean Strategy is used to focus on divergence in the market rather than competing so Amazon focuses on how they will provide to their customers differently rather than how they can have higher profits.