Chapter 14 Mergers & Acquisitions
This week we will discuss Amazon and merger and acquisition strategies.

Amazon's motivation for engaging in mergers and acquisitions is to gain the competitive advantage through several types of mergers and acquisitions.  A vertical merger is when a firm acquires former suppliers or customers. A horizontal merger which happens when a firm acquires a former competitor. Product extension merger is to gains access to complementary products through an acquisition. Market extension merger occurs when a firm gains access to complementary markets through an acquisition. Finally, Conglomerate merger is when there is no strategic relatedness between a bidding and a target firm. A merger and acquisition enable a firm to exploit competitive opportunities and neutralize its threats. In Amazon case they had one of the largest merger & acquisition deal that corporate America has seen in a long time, Amazon announced its acquisition of the grocery chain 'Whole Foods' for $13.7 billion. Amazon has been following an aggressive plan of expansion and diversification for years, both by innovating and through more than 100 acquisitions and investments. This Whole Foods acquisition extends amazon’s brick-and-mortar footprint. In the end, this gives Amazon a much stronger position in the marketplace and capitalizes on Whole Foods’ huge and loyal customer base. Amazon’s most recent acquisition is PillPack is an online pharmacy the lets users buy medications in pre-made doses. Within the merger and acquisition strategy. The strategies should be either: valuable, rare, private, and costly to imitate and Amazon has gained the competitive advantage use all of those strategies.

Barney, J (2011). Gaining and Sustaining Competitive Advantage (4th ed). Upper Saddle River,    

 NJ: Pearson.

https://techcrunch.com/2018/06/28/amazon-buys-pillpack-an-online-pharmacy-that-was-rumored-to-be-talking-to-walmart/

Chapter 13 Strategic Alliances

This week we will discuss Amazon and Strategic Alliances and non-equity alliances.

A strategic alliance occurs whenever two or more independent businesses cooperate in the development, manufacture, or sale of products or services. Strategic alliances can be part into three broad categories: non-equity alliances, equity alliances, and joint ventures.

Amazon uses non-equity alliances with cooperating firms that agree to collaborate to develop, manufacture, or sell products or services, but they do not take equity positions in each other or form a business unit to manage their cooperative efforts like  FedEx, UPS, and US postal services do to deliver their packages. These alliances have allowed Amazon to use their well-established technology in the e-Commerce space to generate profit as well as their other strategic objectives.

In Amazon’s case, Amazon uses all three agreements Licensing agreements (by which one firm allows others to sell products), supply agreements (by which one firm agrees to supply others), and distribution agreements (by which one firm agrees to distribute the products of others) are examples of non-equity strategic alliances. Amazon uses external resources aligning with its value chain. Affiliate marketing partners allow the seller to connect with the buyers. The Amazon Marketplace has enabled rivals of any size to use Amazon's online platform and technical capabilities to present their millions of books to millions of consumers, right next to similar products sold by Amazon itself. Amazon’s strategic alliances and non-equity alliances is a  key factor to there success.

Barney, J (2011). Gaining and Sustaining Competitive Advantage (4th ed). Upper Saddle River,    

   NJ: Pearson.

Chapter 12 blog post-Amazon and organizational structure

This week in Chapter 12 we will discuss Amazon’s organizational structure. The book talks about the M-form or multidivisional structure that will help in implementing a corporate diversification strategy. Where top management can set clear goals for the company’s divisions that they will so suffer little to no less control loss. The multidivisional structure is as follows:

Board of Directors

Senior Executive

Finance       Legal Accounting       Research and Development  Sales Human Resources

Division General Manager A           Division General Manager B Division General Manager C

           Division A                                           Division B Division C

Board of Directors

Senior Executive

Corporate staff: Finance Legal Accounting Human Resources

Division General Manager A           Division General Manager B Division General Manager C

           Division A                                           Division B Division C

Shared Activity: Research and Development                         Shared Activity: Sales


There is also a U form organizational structure whereby the firm is managed centrally as a

single unit specialized along functional lines of marketing, production, finance, and personnel.

However, in Amazon’s case, the organizational structure is entirely different.
Amazon.com uses a functional organizational structure.

Amazon’s Global function-based group organizational structure allows each primary business function to have a dedicated group/team, with senior management. The strategic objective is to have a structural characteristic that will empower Amazon to facilitate effective operations management throughout the entire business.

Office of the CEO
Business Development
Amazon Web Services (AWS)
Finance

International Consumer Business

Accounting

Consumer Business
Legal and Secretariat

Global hierarchy is a traditional organizational structure. In the case of Amazon.com, this organizational structure is best in terms of a global system of vertical chain of command and authority that influences the e-commerce market place.

Amazon’s Geographic division's organizational structure separates each group in geographic regions and related business goals.
North America
International
Amazon's corporate structure is a critical factor in the company's ability to withstand
the effects of is competitors. Amazon.com organizational structure must be adequate enough to support its expanding market place. Their corporate structure also benefits Amazon as the company adds new products and complements the technological foundation of the business, which in turn gradually diversifies its brand into different sectors.

1.Barney, J (2011). Gaining and Sustaining Competitive Advantage (4th ed). Upper Saddle River,    

   NJ: Pearson.

http://panmore.com/amazon-com-inc-organizational-structure-characteristics-analysis

https://www.cnbc.com/2018/06/21/amazons-marketplace-vp-peter-faricy-lose-most-responsibilities.html