Week 4 - Assignment

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University Of Arizona *

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633

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Business

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May 30, 2024

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1 An Organization’s Competitive Advantage Alina Zargaryan The University of Arizona Global Campus BUS 633: Project & Operations Management Dr. Webber March 25, 2024

2 An Organization’s Competitive Advantage Countless organizations put in significant effort to establish a competitive advantage. Competitive advantage refers to a company's capacity to outperform its competitors regarding market position and financial performance (Collier & Evans, 2024). Developing a competitive advantage can involve offering more affordable services, discounts, loyalty programs, cost- effective products, and superior quality goods. Understanding customer needs and expectations and delivering attractive customer benefit packages is crucial for organizations to gain a strategic advantage (Collier & Evans, 2024). Individuals need to possess the ability to develop and utilize the company's operational capabilities in order to support the desired competitive priorities effectively. Amazon is the largest online retailer globally. This paper will analyze, discuss, and illustrate Amazon's competitive advantage and the strategic use of priority costs to strengthen this advantage. Amazon Amazon is a versatile company that offers a wide range of services, including online retail, web services, retail stores, and subscription services. Jeff Bezos founded Amazon in 1994. Amazon started its journey by selling books online. Amazon made a mark in the market by pledging to deliver books to readers worldwide (Waters, 2024). Many skeptics in the financial journalism and analyst community questioned Amazon's chances of success in the face of established book retailers like Barnes & Noble. Despite the skeptics and Amazon's modest beginnings, Bezos always saw the website as more than just a platform for selling consumer products. According to Waters (2024), Bezos emphasized that Amazon.com was a technology company focused on streamlining consumer online transactions. Despite not making a profit in

3 the final quarter of 2001, Amazon remained committed to its vision and has become the largest retailer worldwide. Competitive Advantage A competitive advantage is a distinguishing attribute that enables a company to surpass its rivals in performance. Management must thoroughly grasp consumer wants and expectations and how the value chain can successfully meet them to gain a competitive advantage (Collier & Evans, 2024). Amazon's competitive advantage is derived from a strong combination of various factors, with cost being one of its primary focuses. The company has leveraged its extensive, interconnected value chain to provide customers with competitive pricing, an extensive product range, and efficient, dependable delivery (Dudovskiy, 2022). Amazon saves money through economies of scale, technology-driven operations, clever fulfillment center positioning, and a robust third-party seller marketplace that boosts product listings without inventory expenditures. Amazon's management keenly understands what customers want: affordable prices and convenience. The company utilizes its operational capabilities, including data analytics, machine learning, and innovative warehouse automation, to enhance inventory management and expedite order fulfillment (Dudovskiy, 2022). These technology investments help improve efficiency and lower costs, enabling Amazon to offer competitive prices for its extensive range of products. In addition, Amazon’s commitment to operational excellence is evident through its continuous efforts to improve processes and adopt new technologies, which aligns with the company’s strategic focus on cost leadership. The company’s focus on customer satisfaction and its efficient operations allow it to respond swiftly to evolving customer demands and maintain a cost structure that sets it apart from competitors. Amazon’s strategic and operational decisions

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4 have solidified its market position, providing customer value and establishing a sustainable competitive advantage that supports its long-term success. Strategic Advantage A corporation gains a strategic advantage by taking coherent actions that set it apart from competitors and provide higher value to customers. It allows a company to constantly outperform competitors by aligning its unique strengths and resources with its long-term goals (Collier & Evans, 2024). Amazon's strategic advantage stems from its focus on cost optimization, which allows it to provide competitive prices and convenient services and solidifies its position as a market leader. Amazon's priority is evident in its strategic choices, allowing it to minimize costs and maximize efficiency and customer satisfaction. Amazon has created an extensive network of fulfillment centers strategically positioned near major urban areas (Mehta. 2023). This shortens the distance to the end consumer, reducing shipping costs and faster delivery times. Amazon effectively reduces transportation costs through strategic route optimization and efficient shipment consolidation. This allows the company to offer customers lower prices and invest in areas like Amazon Prime, enhancing its overall value. In addition, Amazon's implementation of automation technology in its warehouses, such as using robots to retrieve items, significantly lowers handling costs and accelerates processing time. This ultimately leads to reduced expenses in order fulfillment. This automation can significantly reduce labor expenses and minimize errors, resulting in lower return costs and improved operational efficiency (Knight, 2023). As long as the business keeps growing, specific jobs will be phased out while new ones will arise. Moreover, competitors will always need to adjust or face the consequences.

5 Conclusion Priority cost benefits an organization aiming to achieve a sustainable competitive advantage. Finding and adapting to a niche is crucial for the organization's success. Jeff Bezos, the visionary founder of Amazon, understood that his ambitious goals would take time. Instead of becoming discouraged, he focused on what he could accomplish in the short term, ultimately building the world's largest online retailer. Amazon stands out from its competitors due to its dedication to customer satisfaction, competitive pricing, extensive product selection, and convenient shopping experience.

6 References Collier, D. A., & Evans, J. R. (2024). Operations and supply chain management (3rd ed.). Cengage Learning. Dharmesh Mehta, (2023, September 12). Announcing supply chain by Amazon: New Services for Sellers. US About Amazon. Dudovskiy, J. (2022, March 22). Amazon Business Strategy: Cost leadership & customer centricity —business Research Methodology. Dudovskiy, J. (2022, March 25). Amazon Value Chain Analysis. Business Research- Methodology. Knight, W. (2023, June 26). Amazon's new robots are rolling out an automation revolution . Wired. Walmart Foundation . (n.d.). Walmart Foundation. https://walmart.org/ Waters, J. (2024, March 15). Amazon.com. Encyclopedia Britannica.

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Week 4 - Assignment

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