Paper Example on Amazon's Supply Chain Management

Paper Type:  Essay
Pages:  8
Wordcount:  1957 Words
Date:  2022-10-05


The supply chain is a strategy and network that involves connecting the suppliers and a company in the production and distribution of goods in the market and the process involves ensuring that the services and goods are accessible by the consumers. Efficient management of the supply chain process ensures that there is a faster cycle of production and limited production costs. There exist three main flows in the supply chain process which are the finances, product and information flow and the supply chain management process which is involved in the oversight process as the commodities a move within the cycle is the force behind the integration and coordination of the flows. The competitive strategies are the measures that are adopted by a given business with the desire to ensure that it has bargaining powers in the market and it can utilize the advantage to beat off the competition from the rival entities in the market. The firm first determines its strengths and weakness of the competitors and makes a comparison with those of its own to understand the areas that it can utilize to move ahead of the rivals. It works towards improving its areas of weakness while maintaining the strengths and ensuring that they remain intact (Ross 2016). Finding a strategic fit between the competitive strategies adopted by a given entity and the supply chain is crucial in achieving success in the present world. Amazon is one of the organizations that is known to have a strategic fit, and this has given it the platform to continue expanding and widening its activities globally. It is an e-commerce firm that is involved in offering cloud computing services, and its headquarters are based in the United States. In this analysis, there will be a determination of the strategic measures adopted by the Amazon in Europe.

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The competition in the modern market is based on the supply chain against the supply chain adopted by the various entities, and it has moved from the case of a firm against a firm. Therefore, the success of a business is based on the partners that an organization involves in its supply process and Amazon's issue of flexibility and low costs on its products is evident in the supply chain processes it adopts, the competitive strategies that it enjoys. The low-cost products attract the consumers in the market, and it serves in a way causing disruptions to the supply chain process. The achievement of these strategic fit involves realizing the consistency that exist between the supply chain capabilities and competitive strategies considering that they both have the same goals. The strategic fit is realized by having an understanding of the uncertainty of the supply chain and the customers. The supply chain should work in a manner that is consistent with the customers' needs and all the activities that are done in the value chain should work towards supporting the competitive strategy that is adopted by the business.

The company has changed the way business operations are being done in Europe due to the supply chain systems that it has adopted and the utilization of innovative technological systems that have given it an upper hand in the market to sell its commodities. It has shaped its supply in a manner in which it is expected to provide the organization with competitive strategies. The firm has experienced massive growth and expansion in the last few years, and this has been realized due to the reliance on the highly efficient systems of supply of commodities. The organization usually delivers the goods to its consumers in the shortest time possible, and this has been causing the rival businesses to feel the pressure for they are losing a share of their market to Amazon (Stevens & Johnson 2016). These competitors view Amazon as the benchmark, and they have been copying what the company is doing with a move to ensure that they do not lose the market. The easiness of transferring goods to the consumers when they need them has given Amazon the competitive advantage that has made it remain relevant in the market thus leading to the creation of a strategic fit between the two concepts.

In the year 2005, Amazon Europe introduced the Amazon Prime service where the clients who made an annual subscription fee were guaranteed that they would receive 2-day shipping in various products. The reduction in the number of days it took to deliver the commodities changed a lot of issues for the company, and this presented the company with the opportunity to dominate the online retail industry. A given number of the competitors started to offer the 2-day shipping period and to remain the dominant player in the market, the organization relied on the Amazon Prime service which involved ensuring that the commodities are delivered within 1-hour. Although the programs have resorted to the 2-day delivery period, the organization efficiency in the supply chain process has given it the opportunity to have a competitive advantage in the market making it difficult for the rivals to catch up with its way of operating.

The organization is favored by a significant number of users in the market due to its efficient and quick way of facilitating the supply chain process. It has an extensive network of warehouses, sophisticated information technology, excellent transportation and multi-tier inventory management system making it the best performing entity in the sector. The firm has been outsourcing the inventory management procedures especially on the commodities that attract low demand levels. They are not stored within the firm's warehouses, and this tends to reduce the cost of operations like security and stores expenses. It relies on managing its logistic measures for it cannot expect the third party logistics to manage its operations despite purchasing the commodities from the third party. The firm understands that relying on the outside parties will only increase the delivery time and this may lead to the company losing customers. The firm has introduced different warehouses for the process of delivering various commodities to the clients in the market, and some of the delivery options available are the first class, one-day and free super saver delivery strategies. All these supply chain measures have been adopted by the business with the desire to enable it to achieve a competitive advantage in the market and make it a logistic giant and a leader in the retail industry in the European market and world at large. The supply chain success is realized by ensuring that there is the adoption of the push/pull strategy that leads to the warehouses being strategically located in the city centers and metropolitan areas ensuring that they are easily accessible by a large number of customers in the market. It relies on pure pull strategy when it is selling the commodities that it has obtained from the third parties. In the year 2012, the firm adopted the Kiva system which are automated warehouses which were later changed to Amazon robotic in 2015, and they play a great role towards the picking and packing of commodities with the need of the human assistance (Prajogo 2016). Their introduction means that the costs of operations have been minimized and there is a reduction in the cases of burnout among the workforce leading to high output levels and optimal utilization of resources. The reduction in the operational costs has led to the charges made on the commodities sold by the business to reduce, and this has benefited the consumers in the market for they can now acquire and make low payment for the commodities purchased. The introduction of the drones has been a great move to enable the firm cement its status in the market as the global leader in the logistics industry and ensure that it continues to enjoy the competitive strategy in future. The Amazon CEO has been known to advocate for various issues that are expected to continue raising the business profits among them the introduction of these drones. The manager has the desire to ensure that the business forage profits in the short-term with the idea of managing to realize low-cost and speed delivery of products concept. In the year 2013, the CEO decided to introduce the drones to ensure that the goods were delivered to the customer's doorstep within 30 minutes with the desire to intimidate the competitors and ensure that Amazon remains the global leader in the e-commerce chain. The same-day delivery procedure is becoming the firm's competitive advantage, and it is giving it the ability to remain focused towards the realization of the overall goals and objectives that the business has set. It has combined these strategies with the supply chain procedures to realize a strategic fit that helps the business to remain at the core of its business activities. The idea of introducing drones is to ensure that sales are not lost and that the firm manages to reach consumers that the other rival businesses cannot serve.

Over the years, Amazon in the European market has managed to realize competitive advantage by running its activities in a certain way different from the way that the competitors are doing. The firm has positioned itself in the market well leading to the creation of a niche, and the business has done this through the provision of value to the end users by combining instant access, extraordinary convenience, and some comprehensive selection. These factors have been combined with the low cost of the final goods, and this has given the firm the platform to build its brand (Wisner, Tan & Leong 2014). Selling its products at low margins led the innovator of this company, the Bezos understand that the concept will attract more customers to the store leading to an increase in the volume of sales made. The proprietor believes that reverting to high-profit margins would justify the need for the rival businesses to make investments in research and the development process and this would lead to increased competition levels. Therefore, selling the commodities at low prices discourages the competitors from taking any measures that would give them the opportunity to close the operations gap on Amazon meaning the company continues to dominate the European market. The unique set of activities that the organization has undertaken to offer its clients has given it the competitive advantage, and when it has been combined with the efficiency in the supply chain processes, the company has managed to create a strategic fit. It has been performing many activities with the desire to value proposition to its various consumers (Coyle, Langley, Novack & Gibson 2016). It has customized its activities with the desire to meet the low price proposition and enable the buyers to achieve convenience. These activities are unique to the business ad they have become the means through which the firm has managed to realize a competitive advantage.

The plans taken by Amazon in Europe have driven other entities to take note and try to copy what this company is doing. In an example, Google introduced a concept dubbed Shopping Express that involved making the same-day deliveries in the cities of Los Angeles and New York. eBay has been engaging in local deliveries since 2011 while Walmart is also working with the idea of delivering groceries to the customers' doorstep (Mohamed 2018). The same-day delivery logistics are not easy and simple to manage, and it can be noted that the firm's executive officer has to test the Amazon Fresh in the region of Seattle before he was convinced enough that it can be expanded to other regions like the Los Angeles (Leblanc 2018). Therefore, a lot of consideration needs to be made before an entity can decide to take a given measure that it expects to give it a competitive advantage in the market. It must ensure that...

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