Functional Tactics

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Date Submitted: 11/24/2012 03:03 PM

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Short-Term Objectives

Amazon CEO Jeff Bezos recently said that Amazon has three key ideas that are central to its business philosophy, a) long-term thinking, b) customer obsession, and c) willingness to invent. Amazon’s long-term objective is to expand and grow its market-share, and almost everything it does in the short-term is to make that vision real. The big picture is to provide a wide range of services and products to greater numbers of people, and thus ensuring its long-term sustainability and market-share. In order to bring this vision to fruition Amazon has been aggressively pursuing the two sides of this equation, the growth of its customer base and its inventions in the short-term. Amazon is committed to its long-term vision of larger market-share and sustained growth, and it is therefore, more than willing to take risk and lose money in the short-term to achieve its goals.

More than anything customer focus is central to the realization of this goal of growth and wider reach. It believes fostering and maintaining a very special relationship with customers will pay dividends for a long time to come. Therefore, in the short-term Amazon employs a low-price and low-profit margin strategy that is meant to incentivize customer business and earn their satisfaction and potentially their business. This strategy has significantly lowered its potential for increased profit, but Amazon believes this approach greatly enhances customer loyalty and satisfaction, not to mention its product development and innovation; thus enabling it to expand its market-share in the long-term. Although, it is hard to quantitatively measure the effectiveness of these short-term measures to the long-term growth of Amazon in the future, we can definitively say it has been great thus far. Amazon is investing and betting heavily on its customers now, on the chance that they will be loyal consumers of its services and products in the future, and it is probably a good bet it will pay in...