Amazon and Future Group: Rethinking the Alliance Strategy SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Leadership & Managing People
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Amazon and Future Group: Rethinking the Alliance Strategy
In 2014, the chief executives officers of Amazon and Future Group led their companies into an alliance that, while initially successful, encountered some difficulties in regards to discounts on their retail products. With the global retail industry standing at US$25.4 trillion in 2016, and the percentage of which e-commerce made up 7.4 per cent, the partners would have to decide if they should resolve their conflict and remain allies, or if they should consider becoming independent companies again. If one partner placed a higher value on the use of discounts than the other, how much was the alliance really worth? Meeta Dasgupta is affiliated with Management Development Institute.
Swot Analysis of "Amazon and Future Group: Rethinking the Alliance Strategy" written by Meeta Dasgupta includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Alliance Discounts facing as an external strategic factors. Some of the topics covered in Amazon and Future Group: Rethinking the Alliance Strategy case study are - Strategic Management Strategies, Joint ventures, Negotiations and Leadership & Managing People.
Some of the macro environment factors that can be used to understand the Amazon and Future Group: Rethinking the Alliance Strategy casestudy better are - – increasing household debt because of falling income levels, there is increasing trade war between United States & China, technology disruption, supply chains are disrupted by pandemic , wage bills are increasing, talent flight as more people leaving formal jobs, central banks are concerned over increasing inflation,
increasing transportation and logistics costs, geopolitical disruptions, etc
Introduction to SWOT Analysis of Amazon and Future Group: Rethinking the Alliance Strategy
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Amazon and Future Group: Rethinking the Alliance Strategy case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Alliance Discounts, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Alliance Discounts operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Amazon and Future Group: Rethinking the Alliance Strategy can be done for the following purposes –
1. Strategic planning using facts provided in Amazon and Future Group: Rethinking the Alliance Strategy case study
2. Improving business portfolio management of Alliance Discounts
3. Assessing feasibility of the new initiative in Leadership & Managing People field.
4. Making a Leadership & Managing People topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Alliance Discounts
Strengths Amazon and Future Group: Rethinking the Alliance Strategy | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Alliance Discounts in Amazon and Future Group: Rethinking the Alliance Strategy Harvard Business Review case study are -
Innovation driven organization
– Alliance Discounts is one of the most innovative firm in sector. Manager in Amazon and Future Group: Rethinking the Alliance Strategy Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Effective Research and Development (R&D)
– Alliance Discounts has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Amazon and Future Group: Rethinking the Alliance Strategy - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Successful track record of launching new products
– Alliance Discounts has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Alliance Discounts has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
High switching costs
– The high switching costs that Alliance Discounts has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Low bargaining power of suppliers
– Suppliers of Alliance Discounts in the sector have low bargaining power. Amazon and Future Group: Rethinking the Alliance Strategy has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Alliance Discounts to manage not only supply disruptions but also source products at highly competitive prices.
Strong track record of project management
– Alliance Discounts is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
Organizational Resilience of Alliance Discounts
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Alliance Discounts does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
High brand equity
– Alliance Discounts has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Alliance Discounts to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Digital Transformation in Leadership & Managing People segment
- digital transformation varies from industry to industry. For Alliance Discounts digital transformation journey comprises differing goals based on market maturity, customer technology acceptance, and organizational culture. Alliance Discounts has successfully integrated the four key components of digital transformation – digital integration in processes, digital integration in marketing and customer relationship management, digital integration into the value chain, and using technology to explore new products and market opportunities.
Operational resilience
– The operational resilience strategy in the Amazon and Future Group: Rethinking the Alliance Strategy Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Training and development
– Alliance Discounts has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Amazon and Future Group: Rethinking the Alliance Strategy Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Analytics focus
– Alliance Discounts is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Meeta Dasgupta can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Weaknesses Amazon and Future Group: Rethinking the Alliance Strategy | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Amazon and Future Group: Rethinking the Alliance Strategy are -
High operating costs
– Compare to the competitors, firm in the HBR case study Amazon and Future Group: Rethinking the Alliance Strategy has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Alliance Discounts 's lucrative customers.
Need for greater diversity
– Alliance Discounts has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Slow decision making process
– As mentioned earlier in the report, Alliance Discounts has a very deliberative decision making approach. This approach has resulted in prudent decisions, but it has also resulted in missing opportunities in the industry over the last five years. Alliance Discounts even though has strong showing on digital transformation primary two stages, it has struggled to capitalize the power of digital transformation in marketing efforts and new venture efforts.
Slow to strategic competitive environment developments
– As Amazon and Future Group: Rethinking the Alliance Strategy HBR case study mentions - Alliance Discounts takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Alliance Discounts is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Amazon and Future Group: Rethinking the Alliance Strategy can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Employees’ incomplete understanding of strategy
– From the instances in the HBR case study Amazon and Future Group: Rethinking the Alliance Strategy, it seems that the employees of Alliance Discounts don’t have comprehensive understanding of the firm’s strategy. This is reflected in number of promotional campaigns over the last few years that had mixed messaging and competing priorities. Some of the strategic activities and services promoted in the promotional campaigns were not consistent with the organization’s strategy.
Lack of clear differentiation of Alliance Discounts products
– To increase the profitability and margins on the products, Alliance Discounts needs to provide more differentiated products than what it is currently offering in the marketplace.
Workers concerns about automation
– As automation is fast increasing in the segment, Alliance Discounts needs to come up with a strategy to reduce the workers concern regarding automation. Without a clear strategy, it could lead to disruption and uncertainty within the organization.
No frontier risks strategy
– After analyzing the HBR case study Amazon and Future Group: Rethinking the Alliance Strategy, it seems that company is thinking about the frontier risks that can impact Leadership & Managing People strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Amazon and Future Group: Rethinking the Alliance Strategy, is just above the industry average. Alliance Discounts needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Low market penetration in new markets
– Outside its home market of Alliance Discounts, firm in the HBR case study Amazon and Future Group: Rethinking the Alliance Strategy needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Opportunities Amazon and Future Group: Rethinking the Alliance Strategy | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Amazon and Future Group: Rethinking the Alliance Strategy are -
Leveraging digital technologies
– Alliance Discounts can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Alliance Discounts in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Leadership & Managing People segment, and it will provide faster access to the consumers.
Reforming the budgeting process
- By establishing new metrics that will be used to evaluate both existing and potential projects Alliance Discounts can not only reduce the costs of the project but also help it in integrating the projects with other processes within the organization.
Low interest rates
– Even though inflation is raising its head in most developed economies, Alliance Discounts can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Buying journey improvements
– Alliance Discounts can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Amazon and Future Group: Rethinking the Alliance Strategy suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Using analytics as competitive advantage
– Alliance Discounts has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Amazon and Future Group: Rethinking the Alliance Strategy - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Alliance Discounts to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Better consumer reach
– The expansion of the 5G network will help Alliance Discounts to increase its market reach. Alliance Discounts will be able to reach out to new customers. Secondly 5G will also provide technology framework to build new tools and products that can help more immersive consumer experience and faster consumer journey.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Alliance Discounts is facing challenges because of the dominance of functional experts in the organization. Amazon and Future Group: Rethinking the Alliance Strategy case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Leadership & Managing People industry, but it has also influenced the consumer preferences. Alliance Discounts can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Alliance Discounts to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Alliance Discounts to hire the very best people irrespective of their geographical location.
Loyalty marketing
– Alliance Discounts has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Manufacturing automation
– Alliance Discounts can use the latest technology developments to improve its manufacturing and designing process in Leadership & Managing People segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Creating value in data economy
– The success of analytics program of Alliance Discounts has opened avenues for new revenue streams for the organization in the industry. This can help Alliance Discounts to build a more holistic ecosystem as suggested in the Amazon and Future Group: Rethinking the Alliance Strategy case study. Alliance Discounts can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Threats Amazon and Future Group: Rethinking the Alliance Strategy External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Amazon and Future Group: Rethinking the Alliance Strategy are -
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Alliance Discounts with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Amazon and Future Group: Rethinking the Alliance Strategy, Alliance Discounts may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Leadership & Managing People .
Aging population
– As the populations of most advanced economies are aging, it will lead to high social security costs, higher savings among population, and lower demand for goods and services in the economy. The household savings in US, France, UK, Germany, and Japan are growing faster than predicted because of uncertainty caused by pandemic.
Easy access to finance
– Easy access to finance in Leadership & Managing People field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Alliance Discounts can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
Consumer confidence and its impact on Alliance Discounts demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Alliance Discounts can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Amazon and Future Group: Rethinking the Alliance Strategy .
Technology acceleration in Forth Industrial Revolution
– Alliance Discounts has witnessed rapid integration of technology during Covid-19 in the Leadership & Managing People industry. As one of the leading players in the industry, Alliance Discounts needs to keep up with the evolution of technology in the Leadership & Managing People sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
High dependence on third party suppliers
– Alliance Discounts high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Alliance Discounts needs to understand the core reasons impacting the Leadership & Managing People industry. This will help it in building a better workplace.
Environmental challenges
– Alliance Discounts needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Alliance Discounts can take advantage of this fund but it will also bring new competitors in the Leadership & Managing People industry.
Shortening product life cycle
– it is one of the major threat that Alliance Discounts is facing in Leadership & Managing People sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Alliance Discounts will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Weighted SWOT Analysis of Amazon and Future Group: Rethinking the Alliance Strategy Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Amazon and Future Group: Rethinking the Alliance Strategy needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Amazon and Future Group: Rethinking the Alliance Strategy is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Amazon and Future Group: Rethinking the Alliance Strategy is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Amazon and Future Group: Rethinking the Alliance Strategy is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Alliance Discounts needs to make to build a sustainable competitive advantage.
