Amazon's Strategy In India
Amazon has one of the most successful strategies that has developed in the last couple generations of contemporary business models. Their use of a "customer-centric" perspective, new distribution channels, and technology as core competencies have fueled an impressive growth rate in many new niches. Yet, despite many successful strategies initiatives that Amazon has developed thus far, the international sphere as a channel of expansion has produced mixed results. The case presents an overview of Amazon's efforts to enter the Indian market and the factors that are within the country and the culture that the company will have to navigate in order to overcome many challenges related to these circumstances.
For example, organized retail only represents a small portion of India's total retail market and therefore, for Amazon's strategy to work, the company will have to develop this market segment while simultaneously positioning itself at the center of this niche. Furthermore, Indian law essentially requires that Amazon forms a strategic partnership to face these issues due to the fact that they are not allowed to own any more than fifty-one percent of any company in the country. Therefore, Amazon will not have the same level of autonomy and independence that it has had...
In the U.S., it can be easy to take our infrastructure for granted. However, in India there are many challenges in delivering packages, especially in rural areas. For example, instead of being able to find a street address, delivery people will often have to go by general landmarks or other identifiers that can make tracking people down terribly difficult. Since Amazon is basically wholly dependent upon its logistical network, this key issue is of paramount importance. Furthermore, the infrastructure that is available is comparatively expensive relative to other places.
"Up to 90 per cent of goods ordered online in India are moved by air, which pushes up delivery costs by around half, according to several online retailers and logistics companies. Road and rail transport networks remain woefully underdeveloped and entangled in graft and bureaucracy (Reuters, 2014)."
Amazon's first step was to identify the logistical challenges with their construction of the fulfillment center outside Mumbai.
China, by contrast, has a…
