Innovation And Its Impact On Amazon’s Growth Strategy

Jeff Bezos: The Visionary Leader

Jeff Bezos is regarded as one of the most visionary leaders and exceptional business man in the contemporary business environment. In June 2017, he was declared as the richest man by Forbes. In several interviews he has mentioned that he takes decisions based on the consumers requirements this also helps him develop new ideas and invest in new ventures. The organization started off by selling booking on a internet based platform now Amazon has grown exponentially in the past decade and has revolutionized the e-commerce sector with a wide range of products and services. While most of their services are based online the company has started investing in physical stores as well. Recently the company has acquired the chain of grocery stores “whole foods” and now the company has a new idea in the pipeline, AmazonGo (Amazon.com 2018).

The organisation has always welcomed new ideas, and has invested and taken risk in order to grow in their business. The idea of e-commerce was also new at the time the company was established, and the company has set up benchmark for the competition in the e-commerce sector.

Invention is said to occur when a person develops a new idea, product or service and innovation takes place when an existing idea is worked upon and is improved. Hence there is a major difference in the foundation of the concept. Amazon declares that it is a company of innovations and they are ready to invest in new ideas all the time. When the company began its operation the concept of e-commerce was available Jeff, worked upon the idea with his passion of IT and love for books. He launched the website in 1994, at that time the website used to only sell books now the companies have a plethora of products and business lines (Amazon.com 2018).

Amazon Go will allow a person to shop and leave the store without waiting for the billing process, as the customer will pick up items they will be scanned and the money will be deducted from their Amazon prime account. Amazon claims that the facility that Amazon Go will provide is “the world’s most advanced shopping technology” (Neate 2016). 

As mentioned above invention is the process of developing or coming up with an idea or concept that is completely new and effectiveness of the idea is still yet to be tested. Innovation on the other hand is improving or developing on the concepts that are already existing (Gokhberg and Meissner2013).

Invention vs. Innovation

In business organisations the process of innovation is important as the intention has been tested and it has already been proven affective and further innovation in the process will ensure that the process is developed even further. A business always runs on a certain amount of risks in the process of operation as there are many factors that drive the operations some of which are not even under the control of the management of the company hence innovation is the process of survival and growth for many organisation and Amazon is one such successful example of innovation driven organisation. The company motivates its employees to ensure they get their space to be innovative. The company invests a lot in the research and development sector. There are many products and services in the company which have been based on innovating on an existing idea. Any kind of innovation is created by an organization to ensure that the company has an edge over the competition and so that it can cater to the evolving needs of the consumers(Roco and Bainbridge  2013).

Disruptive innovation:this is the process of bringing in a concept in the form of a product or services into already established markets that performs in an improved way and areusually, the prices in this case is also listed low, thusproviding an edge to the company to becoming the market leaderin the particular industry (Christensen et al. 2015).

Incremental innovation: This is the process of innovation in installments when an organisation improves and builds up on the products and services that already exist the process is called incremental innovation (Souto2015).

Major innovation: It is the process by which an innovation in the product or services of a company proves to be the center of focus. For example in Microsoft the software that was developed by the entrepreneur was a major innovation (Gokhberg and Meissner 2013).

Strategic innovation: that is a process of innovation which is developed with the help of strategic management decisions and policies, this help the company in marketing their products and services in a way that is important for the organization’s growth and development(Gokhberg and Meissner 2013).

The innovation process that is incorporated by Amazon as a company is mostly disruptive in nature the management usually comes up with decisions and services which were already present but are re-furbished in such a way that it changes the course of the industry form that point. In the case of Amazon Go the same concept is used. The company bought a chain of retail stores “whole foods” and within another few months that ye had announced the launch of a new concept in the physical retail industry (Amazon.com 2018). This industry is prevalent in the market for a long time but the innovation that has been developed in this process is the fact that it is completely digital and fuss free, the customers do not have to stand in queues to bill their items rather they do not even have to pay for the items they have picked up all the process will be handled digital form the moment the customer walks through the door of the store. The concept is to digitalize corner grocery stores in order to allow a person to not waste time standing in a line for the billing process(Neate 2016). The company has kept the process very simple from the end of the customers; the customers have to maintain a balance with the Amazon prime account or can also opt for the credit option. According to a source of The Guardian there will be around 2000 stores across US by the end of 2018. The company is set to brand the endeavourer as“the world’s most advanced shopping technology”(Neate 2016). 

Amazon Go: The Future of Retail

One of the major essences of the company is that Amazon is not fixed in one type of product or services rather the CEO invests in innovation in various forms starting from an online market place to selling groceries. The focus of the company rather than being fixated on a certain area is more on the customers and how products and services can reach to the people in the best and the easiest and fastest way. The CEO is confident that they can retain a customer and transform them into a loyal customer unless there is some other organisation offering a better deal. Therefore, the company focuses on the customer of the product and services in the process of any innovation. The company has continued to be striving and build a dexterous range of products and serviceseven as it has achieved desirabledegree of achievement (Wingfield 2018).

The initiative that are taken by the company can be divided in three categories: the membership program, it is the most rapidly flourishing project of the company with an $99-per-year membership program Prime has allowed the organisation to reach heights; the process of investing in physical stores like the project Amazon Go and acquisition of whole foods this is something that the company did not want to invest on but Bezos is a visionary leader and he understands the scope in a market with Amazon go he wants to revolutionize the retail market, usage of technology and human resource to initiate and encourage innovation in the organisation. The company invests a lot of money in research and development (Amazon.com 2018).

The kind of leadership that is observed in the organisation is in the form of transformational and visionary. Bezos leads a team and provides them with opportunity to use their creativity and imagination to innovation. He welcomes change and invests in risk to ensure that the consumers of the company are satisfied with the products or services that are offered by the company. The consumer centric focus of Amazon leads the goals and objectives in the long run (Wingfield 2018). 

The concept is developed by John Bessant and Joe Tidd it helps you to determinethe prospect of the innovation and the impacts of the innovation will have on the business in the long run. The innovation mix includes 4Ps which are: Process, Position, Product, andParadigm. This concept is used in strategic planning in order to understand the outcome of the innovation(Bessant and Tidd 2007).

The Importance of Innovation in Business

Product innovation: Development and improvement of the changes in the products or services that are offered by the company is the innovation of product

Process innovation: the process or operation of the business also needs to change or evolve with time. This is the process innovation company needs to innovate in order to maintain a parity with the changing business environment.

Position innovation: this is the way the products are positioned in the market many times the company feels that a product or service is failing in the market because it has lacked the way in which it has communicated with the customers; this aspect is associated with the promotion mix of the marketing strategies ((Bessant and Tidd 2007).

Paradigm innovation: the alterations or improvements that are initiated by the organization in which the company has been operating. This impacts the overall internal environment of the company as well as the output of organisation(Gupta et al. 1986).

Amazon Inc is a company that has focused the innovation process in all the areas in order to maintain a balance, as the company is growing and expanding. The company has incorporated frugal innovation in the process of its operation they have focused on making the complexities of normal life easy for the consumers (Youtube.com 2016). The concept of Amazon Go is one of the biggest example of frugal innovation that the company has indulged in. the company has used technologies like computer vision, deep learning algorithms, sensor fusion in the operation of Amazon go, the company has named it Just Walk Out technology as it enables the customers to walk out of the store with without waiting in a line for billing, the technology adds the amount of the products that the customer have picked up (Youtube.com 2016).  And the money will be deducted from the wallet that you have set up with the app. Once the customer learns the process shopping for groceries will not be a challenge anymore(Neate 2016). 

This project is not only the example of the frugal innovation model that Amazon have, the idea of the company is to make products and services for the customers so that they can make the lives of the customers easy. The consumer centric approach of the Amazon business model justifies the innovation process that the company has (Wingfield 2018).

Conclusion

It can be concluded form the above discussion that Amazon Inc, led by Jeff Bezos is one of the most innovative and successful business organisations in the world. The stock prices of the company are soaring high and the people working in the organization enjoy the visionary and transformational leadership of Bezos. The company has invested in this new venture which is positioned in the market to be the “the world’s most advanced shopping technology”. The idea of the business is that it allows the customers to pick up grocery items and walk out of the store without worrying about the long queues that customers usually dislike in the retail business. The organisation has avoided the platform of retail in physical form for many years and had focused on the internet based products and services, but this venture will ensure a strong foothold for the company in the physical retail world. The company has loyal customers and already without the venture being 100 percent available among the people it has garnered a lot of attention. 

Reference list:

Amazon.com (2018). Amazon Go. [online] amazon.com. Available at: https://www.amazon.com/b?ie=UTF8&node=16008589011 [Accessed 17 Mar. 2018].

Amazon.com (2018). Our Innovations. [online] amazon.com. Available at: https://www.amazon.com/p/feature/tv76jef8gz289rm [Accessed 17 Mar. 2018].

Bessant, J. and Tidd, J., 2007. Innovation and entrepreneurship. John Wiley & Sons.

Christensen, C.M., Raynor, M.E. and McDonald, R., 2015. What is disruptive innovation. Harvard Business Review, 93(12), pp.44-53.

Gokhberg, L. and Meissner, D., 2013. Innovation: superpowered invention. Nature, 501(7467), p.313.

Gupta, A.K., Raj, S.P. and Wilemon, D., 1986. A model for studying R&D. Marketing interface in the product innovation process. The Journal of Marketing, pp.7-17.

Neate, R. (2016). Amazon Go store lets shoppers pick up goods and walk out. [online] theguardian.com. Available at: https://www.theguardian.com/business/2016/dec/05/amazon-go-store-seattle-checkouts-account [Accessed 17 Mar. 2018].

Roco, M.C. and Bainbridge, W.S., 2013. The new world of discovery, invention, and innovation: convergence of knowledge, technology, and society. Journal of nanoparticle research, 15(9), p.1946.

Souto, J.E., 2015. Business model innovation and business concept innovation as the context of incremental innovation and radical innovation. Tourism Management, 51, pp.142-155.

Youtube.com (2016). Introducing Amazon Go and the world’s most advanced shopping technology. [online] Youtube.com. Available at: https://www.youtube.com/watch?v=NrmMk1Myrxc [Accessed 17 Mar. 2018].