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Innovation at Amazon

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Daniel Monnier

on 13 December 2012

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Transcript of Innovation at Amazon

Outline 1. Introduction
2. Innovation Strategy Formulation
3. Description of the Innovation Process
4. Innovation Strategy Implementation
5. Conclusions/Summary Innovation Strategy According to Freeman’s classification
Amazon special mix of both:

offensive strategy as a technological leader &

defensive strategy as technological follower based in Seattle

founded by Jeff Bezos in 1995

global leader in e-commerce offers everything from books and electronics to tennis rackets and diamond jewelry

international: Canada, China, France, Germany, etc.

most well-known product: Amazon Kindle, e-book reader employs more than 56 200 people around the world

e-commerce platform used by over 152 million active customer accounts, 2 million active seller accounts and hundreds of thousands of external developers

some competitors are: Apple, Barnes & Noble, Walmart and Ebay Objectives and effects of innovation Source: based on Oslo Manual, 2005, p. 77-83 former employees have founded and started a number of companies like BankBazaar

thanks to their business strategy based innovation & their leadership princples (ownership, invent and simplify) considered as one of main companies in innovation industry Offensive strategy first online retailer

patented 1-Click®-Technology and Bid-Click® auction

the new invention and technology in the Kindle Defensive strategy adopted eBay’s auctions

the Kindle as an e-book

adapting Groupon’s discount deals Introduction Innovation Strategy Implementation Innovation’s Portfolio the 1-Click®-Technology
Bid-Click® auction bidding process
Amazon Associates Program
book recommendation service BookMatcher
“zShops” Amazon Commerce Network
"Amazon.com Anywhere"
"Wish List" feature
“Instant Order Update”
“Look Inside the Book”
search engine A9.com
Amazon Prime
Amazon Web Services
Kindle - the electronic reader device
Amazon Lockers Conclusions / Summary Innovation Process Employee-Driven Innovation Market Orientation mission most customer-centric company

CEO Jeff Bezos strongly involved pushes innovation continuously

top down approval of innovation proposals
filter system integration of projects “focus on customer experience by offering customers low prices, convenience, and a wide selection of merchandise”

Amazon’s corporate culture must be obsessed with the needs of its customers

"the Earth’s most customer centric company. It means three things: listen, invent and personalize”

focus on customers, not competitors Interactive Innovation Process Hampering Factors of Innovation Process customer focus

competitors: leverage current assets and information and turn them into new business opportunities analyze competitors

adaptation and improvement of existing and new technologies (new combinations) Kindle, EC2 source: spigit.com Amazon’s Customers source: spigit.com consumers


developers source: class material and google research standardized characteristics disconnection between the corporate office and the innovation teams
determine innovation exactly?

filter levels: big communication gaps

no established and proper incentive system problems in not only retaining but also attracting qualified personal Entrepreneurial Orientation low advertisement people might not be aware of the big advantages

strong competitors also in technology or service driven industries “patent wars” vibrant and dynamic corporate entrepreneurship strategy strongly driven by its visionary CEO Innovation Leadership from the Top and its pursuit of diverse innovation opportunities

long-term vision

“If you want to continuously revitalize the service that you offer to your customers, you cannot stop at what you are good at, you have to ask what your customers need and want, and then, no matter how hard it is, you better get good at those things.” narrow authority angle

problems with internal learning capability

slow information flow

lack of connection between different levels divided in two branches: USA and the rest of the world

two differentiated activities: Kindle and Online sales

board of directors composed by : Jeff Bezos and SVP’s

activity based organizational structure Innovation Strategy Formulation unawareness of innovation in society

dependence from individual persons

even such an experienced company has room to improve Timeline of Amazon's main businesses; source: bryancopeland.com Share prices and volume of shares traded ($); source: Nasdaq.com Ranking of innovative firms; source: Forbes.com "one among many" market leader

continually keeping an eye on the customer and developing new business ideas based around current and potential customer's needs and wants

shaping and leading the market rather than adapting to it

Amazon's initial growth strategy not all about technology

Will Amazon be able to maintain its leading position? THANK YOU FOR YOUR ATTENTION! Group 1:

Libertad Montero Vicente

Madeleine Sundström

Agnieszka Lewandowska

Daniel Monnier

Sergio Kazakov Amazon Organizational structure, own composition according to www.cogmap.com Amazon information Flow chart, own composition according to www.TheOfficialboard.com
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