Amazon Marketing Strategy Enter Netherlands

Question

Task: Write a 3000 words report critically discussing about the Amazon marketing strategy to enter potential Dutch market within 2020-2022?

Answer

Introduction
The following marketing management and business report will assist the management of Amazon marketing strategy to enter potential Dutch market within 2020-2022. Amazon.com is a multinational technology company, which is headquartered in Seattle. This America based technology company was formed in 1994 and it has gradually achieved its competitive edge in the global market place by aggressive business expansion, technological advancement, business diversification, and innovation in global business. The management of Amazon is thinking about entering into the potential Dutch market. The management of Amazon thinks that Netherlands will be a potential business market for the company and it will significantly help the company to ensure more market share growth and more profitability.

Growth Strategies of Amazon in International Market
Amazon.com has become one of the leading technology enterprises across the globe due to several reasons. Some important calculated risks and effective strategic approaches are the major reasons behind the global business growth of Amazon.

First of all, the company has successfully adopted business diversification approach. The company focuses on diversified businesses like e-commerce, digital streaming, cloud computing, artificial intelligence, and e-reader platforms (Cherney, 2018). Calculated risks in terms of diversification of business as per the demands of people across the globe have allowed the management of Amazon to influence the buying behaviour of the consumers in a positive way.

Secondly, technological advancement and innovation in the business is considered to be another important reason behind the growth stories in global market. The company uses Artificial Intelligence, Big Data, Advanced ICT Applications, and other important technological tools in the business operation activities. These allow the company bring excellence, innovation, and efficiency in business operation activities and service delivery processes (Gupta and nair, 2020). Apart from these, the management also follows the less-hierarchical organisational structure and democratic leadership style. These two collaboratively allow the employees to share their innovative and creative ideas with management. Due to the technological advancement and innovation in global business, Amazon has become one of the innovative and influential companies in this world like Facebook, Apple, and Google.

Thirdly, integration of cultural diversity in the business also has helped in adopting aggressive global expansion approach. Amazon is the leading and profitable e-commerce company across the globe due to the successful integration of cultural diversity in business in different global regions.

SWOT Analysis
This analysis on Amazon marketing strategy can help the researchers to identify the reasons behind the business growth in the global market. Apart from the competencies and abilities, the internal weaknesses, possible opportunities, and future threats also can be analysed through the following SWOT framework.

Entering Dutch Market from the Perspectives of Amazon: Born-Global Theory
From the global business perspectives of Amazon, it will be appropriate for the management to adopt the Born-Global Theory of internationalisation to do business in Netherlands. It is important here to understand the business characteristics of Amazon marketing strategy. The business characteristics and principles of Amazon are to offer differentiated products and services to the people across the globe through internet. The company is following global online retailing model (Deepak and Jeyakumar, 2019). Hence, it is very much clear that the company is following the Born-Global theory of internationalisation.

The nature of any Born-Global company is to ensure competitive advantages by selling differentiated products and services to the people of multiple nations through the use of innovative and quality resources in business. As per the business model of Amazon, the company generally sells different kinds of goods, such as books, electronic goods, home appliances, cosmetics, apparel products, beauty products, and human wellness products of different brands across the globe through internet and online platforms (Hackley et al., 2018). The vision of the company is to expand further in Netherlands and offer same services through its online platform. Hence, Born-Global Path should be appropriate for the management of Amazon to enter into the Dutch market.

Competitors for Amazon in the Netherlands
Bol.com, Wehkamp, and Zalando can be considered as the potential competitors of Amazon in Netherlands. The degree of competition within the Dutch e-commerce industry is high enough. Most importantly, the e-commerce industry of Netherlands is strongly dominated by these three competitors of Amazon. The management of Amazon will face real tough challenges in Netherlands from the existing customers.

Competitive Reactions from Competitors and Competitive Strategy of Amazon
Wehkamp, Bol.com, and Zalando are three popular e-commerce websites. Bol.com follows similar kinds of e-commerce business operation model of Amazon as differentiated products are available through the online platforms of Bol.com. On the other hand, Wehkamp is specially an online fashion retailer. Apart from clothes and apparel products, different kinds of electronic goods, toys for children, sports equipment, gifts, and beauty products are currently offered by Wehkamp. Zalando is a popular online fashion retail company, which offers different kinds of quality clothes and apparel products of different popular brands to the people of the Netherlands. Most importantly, the management of Wehkamp, Zalando, and Bol.com significantly focuses on important aspects in business operation activities to improve profitability (Haider et al., 2017). First of all, all of these three competitors of Amazon are focusing on customer service and quality management. Secondly, these companies are also focusing on time and cost efficiency in business operation activities to ensure competitive advantages. These are the competitive reactions of the competitors to gain competitive advantages. Wehkamp, Zalando, and Bol.com are currently following B2C business model.

The management of Amazon is expecting that the e-commerce organisations of Netherland will try to adopt B2B model and C2C model in business to ensure better competitive advantages. Apart from these, the management of Amazon is also expecting that the competitors will offer more differentiated products and more value-added services to make it impossible for other competitors (Hollensen, 2019). Hence, the management should focus on the adoption of the following competitive strategies in the business. First of all, as per the Amazon marketing strategy, the company should reduce the supply chain lead time and shorten the inventory cycle. This will reduce the overall supply chain management time and it will allow the customers to receive their orders within limited timeline. Hence, time-efficiency is important in Netherlands (Kotler et al., 2018).

Secondly, value-addition and differentiation is important. Effective membership facilities like gifts and discounts for the customers should be considered by the management of Amazon to influence the purchasing behaviour of Dutch people.

Lastly, the management of Amazon should pro-actively follow all the three business models, such as B2C, C2C, and B2B model in the e-commerce business (Kotler, 2016). This will definitely help Amazon to create a benchmark within the industry and the management will be also successful in attracting higher number of consumers to the e-commerce platforms for different purposes. Ultimately, the degree of competitive advantage will be increased and Amazon will undoubtedly become a profitable company in Netherlands

Which Amazon marketing strategy is adopted to enter the market in Netherlands?
From the above analysis, it is clarified that the adoption of Born-Global Internationalisation approach will be appropriate for Amazon to do business in Netherlands. Now, it is also essential for the management to decide the appropriate market entry mode for Amazon to enter Netherlands. There are different kinds of international market entry options for Amazon, such as Merger & Acquisition, Sole Proprietorship, Franchising, Partnership, Exporting, Licensing, Joint-Venture, and Trunkey Project etc. (Kotabe and Helsen, 2020). Among the listed international market entry modes, the management of Amazon is feeling that selection of joint-venture approach will be effective to enter Netherlands. The justification behind the selection of this joint-venture mode is provided.

First of all, the joint-venture mode will allow Amazon to form a partnership with a local company in the host-Dutch market. This will help the management of Amazon to get access to the distribution networks of the local company. Hence, Amazon will not have to create a new distribution network (Keegan, 2017).

Secondly, the business capacity and the capability of the resources will be improved. The employment base will be strong for Amazon. In addition, required marketing research can be conducted by the local partner in the host market (Kotler, 2019). Most importantly, the management of Amazon will not face any kind of cross-cultural issue in business operation activities across Netherlands as the host-partner organisation will guide the management of Amazon to integrate cultural diversity accurately.

Last but not the least; the joint-venture entry mode will also help Amazon to share the business losses with the venture-partner in near future if the company faces any kind of loss. These are some practical advantages of joint-venture business model. Looking into these advantages, this is vital for the management of Amazon to follow this market entry mode to do business in Netherlands (Visconti et al., 2020).

Cultural and Management Differences: Greet Hofstede Cross-Cultural Theory
Amazon is an America based multinational technology organisation, which is entering the e-commerce industry of Netherlands. USA is the home-market and Netherlands is the host-market for Amazon. Hence, it is quite possible that the management professionals of Amazon may face different kinds of cross-cultural issues in business in Netherlands as the business culture of Netherlands is different compared to the business culture of the United States of America. Therefore, the application of cross-cultural theory of Greet Hofstede is important to help Amazon marketing strategy to identify cultural differences between the two countries and adopt new business strategies in Netherlands accurately.

Figure 1: Cultural Comparison between USA and Netherlands
(Source: Hofstede-Insights, 2020)

In terms of power distribution, both the countries have scored almost similarly. Score of 38 and 40 indicate that the institutional structure is less-hierarchical and the decision making power is equally distributed across the organisational structure (Hofstede-Insights, 2020). Hence, Amazon will follow similar kinds of decision making style in Netherlands, which is practiced in the Native American market. In terms of individualism, Netherlands has scored 80 and USA has scored 91. It indicates that the business managers and stakeholders of the companies in Netherlands follow collective strategies and think about collect gains. Comparatively, the business culture of USA is more individualistic (Hofstede-Insights, 2020). It indicates that the management of Amazon should adopt collaborative strategy development approaches in Netherland.

In terms of masculinity index, USA has scored 62 and Netherlands has scored 14. Hence, USA follows masculine culture and Netherlands follow the feminine culture. Higher degree of masculinity indicates achievement and growth oriented activities. On the other hand, higher degree of feminine indicates higher quality of lives, care for others, and values for others (Hofstede-Insights, 2020). The score indicates that the management of Amazon should adopt value-added strategies and should care of collective achievements in operations.

In terms of uncertainty avoidance, USA has scored 46 and Netherland has scored 53. It indicates that the preference of avoiding uncertainty for the business organisations in Netherlands is more compared to the preference of avoiding uncertainty for the business organisations in USA (Hofstede-Insights, 2020). The score indicates that Amazon marketing strategy should go for more innovative, unique, and time-efficient approaches to maintain flexibility during complex business situations in future. In terms of long-term orientation, Netherlands has scored 67 and USA has scored 26. The score indicates that the nature of the business culture of Netherlands is pragmatic. Therefore, it would be vital for the management of Amazon to adopt situational leadership approaches as it is quite possible of changes in management scenarios (Hofstede-Insights, 2020). In addition, the management also should focus on development of long-term goals in business instead of short-term goals to achieve success.

In terms of indulgence, both Netherlands and USA has scored 68. It indicates that Dutch people as well as Americans are happy-go-lucky as they love to be happy and love to have fun (Hofstede-Insights, 2020). Therefore, Amazon should develop a decentralised work-culture in which all the individuals can share their every-bit with others. These will help in promoting an innovative and conflict-free atmosphere of the workplace.

Operational Marketing Plan
Development of an operational marketing plan is important for Amazon for doing business in Netherlands and become a leading e-commerce company within 2022.

4Ps of Marketing Mix Theory
Application of marketing mix theory is important as it will help Amazon marketing strategy to apply different valuable marketing strategies in business, which is necessary for developing a marketing plan for doing business in Netherlands.

Implementation and Control
Following activities will be implemented for Amazon and the responsible individuals for the controlling of the action plans are highlighted below.

Conclusion
Amazon is the leading multinational technology company, which mainly focuses on e-commerce business. Amazon is the leading brand name within the global e-commerce industry due to the effective adoption of business diversification, technological advancement, innovation, and born-global internationalisation strategies in global business. The company also integrates cultural diversity in international business practices to overcome the cross-cultural issues in business. The company is planning to expand in potential Dutch e-commerce industry. Therefore, it would be vital for Amazon marketing strategy to adopt the B2C, B2B, and C2C business model to reduce the market competition threats. Moreover, the company also needs to consider joint-venture market entry mode to become successful in Netherlands.

References
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