A Strategic Operation Management Perspective
Introduction
It is a well-documented fact that, companies should be competitive to sell their products and services in the marketplace (Mould 2006, p12). In his research, Mould continues to affirm that competitiveness is a crucial aspect that determines whether a company fails or prosperous. Most organizations compete through utilizing their marketing and other operational functions. Marketing is paramount since it enhance competitiveness in various ways such as identifying consumer needs and wants, pricing, and promotion and advertising. In this paper, we will discuss the different ways organizations compete in the marketplace and why some organizations flourish in their sales and revenues. In discussing, the paper will highlight how effective strategies are important to competitive organizations, and what organizations can do to improve in their operational and marketing strategy. The paper will critically assess how Amazon UK and Waterstoness compete in the UK book marketplace.
Part A
A review of Amazon UK WaterStones Company
Amazon.com, Inc is the world largest company in America selling online bookstore with headquarters in Washington, United States, and Seattle. Established in 1994, Amazon has grown tremendously in terms of sales and revenues (Miller 2006, p18). The company attracts a wide range of clients across the globe. Still, the company has had a superb reputation of converting the first time clients to frequent and potential clients. The reason behind this success is the fact that the company’s books are affordable, excels in quick and consistent deliveries, and best customer care services (Hill & Jones 2008, p44). Although Amazon’s clients never talk with employees, the company is quick to fix any problem that affects clients. Amazon has built customer loyalty since the company is always on the move of addressing customer needs and wants. The company regards its customer service as an effective way to increase customer loyalty. In so doing, the company has tremendously grown in both the sales and revenues.
As of 2011, the company had over 140 million potential customers worldwide (Pitt & Koufopoulos 2012, p26). With innovation in technology, many people have identified themselves with Amazon since it offers a great benefit in the 21st century of distributing books online (Lee & Carter 2005, p77). The company has created a solid platform where people can read and access books online without the need of tirelessly looking for a book in the bookshop. Additionally, the company sells and distribute a wide range of products such as music and videos among others (Lowson 2002, p22).
According to Hill & Jones (2007, p10), Amazon has utilized various strategic operations to enhance customers’ satisfaction and retaining them. The most important strategy is the originality of Amazon’s goods and services. The company is unique in how it delivers its goods and services. The company has had a philosophy of building customer loyalty through exceptional services. For the past years, Talbot (2007, p28) argues that the company has understood the requirements of its target market, which are quality, flexibility, quality, dependability, and cost. With these factors in mind, the company ensures that their goods and services meet the mentioned requirements or objectives.
The company has diligently worked hard to build a superb reputation as the company that meets their customer wants and needs. Elkin (2007, p22) , affirms that the company emphasizes on its benefit to satisfy its target market in the 21st century where technology is a vital tool commonly used. It is important to note, flexibility is vital since it increases market strength (GrüNig, KüHn & KüHn 2005, p22). With Talbot’s (2007, p22) knowledge in mind, Amazon’s clients are flexible in choosing goods and services offered by the company. Most importantly, the company creates a strong ground where clients can purchase products at affordable cost. This strategic operation is vital in that it converts first time clients to potential and frequent one. The company has a competent management team and employees who offer a distinct competitive edge through the ideas and skills they create. According to Heizer & Render (2001, p13), the company place too much emphasis on determining what clients and both the management team and workers direct their efforts towards exceeding or meeting clients’ expectations.
On the other hand, Waterstones formerly known as Waterstone’s is a company in the UK that distributes its books online. Having been innovated in 1982, the company has shown a remarkable growth in both its sales and revenues (Lowson 2006, p11). Lowson’s research shows that, in 2008, the company achieved an award as he bestselling company in London of the year. Most importantly, the company fares well in maintaining its position in the market place. Waterstone’s has had a superb reputation of enhancing customers’ satisfaction and converting first time visitors to frequent and potential ones. In this section, this paper will review the primary differences between Waterstone’s and Amazon from a strategic operations management perspective.
As argued by Brown, Bessant & Lamming (2013, p66), the global perspective of retailing and bookselling marketing is full of stiff competition, unpredictability, and globalization. With such, Waterstone has geared its marketing strategies to fit into the market with stiff competitors. The company’s mission is to be the leading online bookseller providing clients with the best choice, great services, and expert advice from a team that adore bookselling. With this in mind, the company has implemented various strategic operational management that aims to meet and satisfy clients, and continually motivate people to engage and read books.
For the past years, Waterstone has tremendously flourished in the marketplace taking on Amazon company (Starr 2007, p88). However, the question that lingers in many is whether the company will beat its rival Amazon in the online bookstore. In response to this, Boxall, Purcell & Wright (2007, p22) argues that even though many people think Amazon is the world best book sales, Waterstone is determined to give the best services that transform its online book sales. For instance, in 1996 the company established an internet bookshop that aimed to distribute books online and support those in need of knowledge (GrüTter 2010, p88). GrüTter continues to argue that, in 1999, the company revamped the site and made it more interactive, scalable, flexible, and affordable. This strategy operation made the company to be more aggressive in marketing against its online bookselling competitors such as Amazon.co.uk. The impact was so big that, to-date Watersone online is among the top sites in the bookselling market. The company strategy operation has been to utilize its e-commerce site to strengthen its brand image to customers and enhance customers’ satisfaction.
The online bookselling involves sending and ordering books online, while the retail business informs people on how to select the right book. Although the two services are similar, online bookselling is valuable as it creates a platform to effectively reach the retail and wholesale market. Waterstone has emphasized a lot in selling books online and inspiring many people to read books. The company emulates the fact that, its business is more than just price. In other words, the company has ensured that its services are of quality and excellence, which in effect boost customer satisfaction.
Its long-term strategy operation is to strengthen its marketing and promotion strategy to captivate many to read and purchase books online. The company intends to be the most profitable bookstore without losing its heritage and identity. Still, the company aims to offer the best books on demand backed up by enthusiastic and competent sales staff. When set against Amazon, Waterstone offers a good discount rate that attracts most clients. With this in mind, Waterstone has a solid and strong brand image determined to convert first time customers to frequent and potential clients. According to Cattani (2011, p22), future enhancements comprise plans to integrate knowledge of the company’s staff to enhance quality sale services and enhance customers’ satisfaction.
Thus far, Walters & Rainbird (2007, p55) argue that, the evaluation of what the 21st century market needs have influenced the decisions of both Waterstone and Amazon. It is pertinent to note that, Amazon is limited to sending and distributing books by post. With this, Waterstone company believes that it can reach it’s a large number of clients through online devices like internet or by phone. In this case, Amazon has only built a brand for clients to put things online. However, Waterstone focus on increasing its clients by providing an online business that provides specialist advice through various devices such as a phone. For instance, meanwhile, Waterstone has expanded its strategies for distributing and selling books through digital TV and mobile phones to stay ahead of its competitor Amazon (Bettley, Mayle & Tantoush 2005, p17). On the other side, Amazon has expanded its customer services by creating a platform where clients can air their thoughts about the company.
In my opinion, the operations of the operational strategies of the above forms aim to overcome potential trade-offs between the five operations performance objectives, which are cost, quality, flexibility, dependability. To attract a wide range of clients, Amazon company has utilized market requirement strategy to satisfy its target market through a marketing function (Abel, Bernanke & Croushore 2007, p56 ). In essence, the company has been using this strategy to ensure that its operations are meeting the performance objectives, which are of quality, dependability, high speed, and affordable cost. Still, Waterstone company has expanded its marketing strategies for selling books through mobile phones and digital TV to overcome potential trade-offs between the five operations, which are quality, speed, dependability, and affordable cost. In this case, the company has introduced sites that create a platform for best services of quality, speed, and affordable cost. Still, the company has expanded its marketing and promotion strategies to offer services at an affordable cost and in dependability.
To sum up, it is pertinent to note that marketing and operational play a crucial impact on competitiveness. The concept of strategy is important in both companies since it creates a platform for each company to embrace a marketing operation plan to achieve the intended goals. Operational strategy is chiefly vital since it has a positive impact on competitiveness and productivity.
Part B
In this case, this section will underline the opportunities for a new entrant in the same marketplace, and propose an operational strategy that would enable them to compete with the existing firms. Based on the findings from Part A, I would highlight the following opportunities for a new entrant in the same market place based on various researches conducted on this subject. For instance, Pidd (2007, p77) affirms that one of the most opportunity for a new entrant in the marketplace is the rapid growth use of technology especially internet. This is a great opportunity for any new entrant in the market in that it would be in a better position to expand its brand both internationally and locally. With high innovation in technology, new entrants in the bookselling market would have a chance to develop and improve their sales throughout countries and expand their brand name in the international markets.
The second opportunity for the new entrants is introduction of internet sales through online payment services. With this in mind, a new entrant in the same market would have a great opportunity to expand its brand internationally through internet sales and online payment. In other words, online payment creates a platform for the new entrants in the market to sell and distribute their products and services effectively. Through online payments, clients would have a chance to purchase products online without the need to walk in miles looking for the product. As a result, this enhances customers’ satisfaction and convert first time clients to frequent and potential clients. The third opportunity for the new entrants in the same market is E-books expansion. At this point, new entrants in the market have a chance to enjoy the electronic market where clients have a chance to purchase their products depending on their financial status. With this in mind, new entrants in the market can promote their products effectively throughout the countries. The fourth opportunity is that, public libraries can benefit new entrants in the market with a catalogue and search engine for users or clients globally. As a result, new companies in the market would have a chance to promote their products and services globally.
The fifth opportunity is the presence of strong market internationally. With this, new entrants have a chance to expand its market internationally with the help of high innovation in technology. As argued by Neely (2007, p56), new companies in the market have a chance to expand its brand internationally and capture first time clients to be potential and frequent users of their products. The presence of web services such as Facebook and Linux where third parties access technical content would help the company to develop and improve their application. This would allow new entrants to innovate a strong platform for international marketing without incurring huge investments. Still, it would be a good opportunity for new entrants to gather facts and information on how other companies in the market flourish in their businesses. As a result, this would enhance a strong brand to the new entrants in the market.
With the mentioned opportunities in mind, it is important to propose an operational strategy that would enable the new entrant in the same marketplace to compete with the existing firms such as Amazon and Waterstone. To Andersen (2006, p17), new entrants should embrace the need to expand its online services to boost customers’ satisfaction. Companies should be ready to cope with competitive challenges related to technology innovation and customer responses by means of dynamic and effective strategy formulation. In light with these challenges, the new entrants should be adequately prepared with ideas that would improve their services in the competitive market. In Part A, this paper brought into attention that both Amazon and Watestone have improved in their online services on how they respond to the customers’ needs by considering the following factors. These are quality, speed, flexibility, and dependability. The two companies ensure that their products and services are of good quality, delivered on time, and considering flexibility and dependability in mind. With this in mind, it is important for the new entrants consider the four factors to compete with the existing firms in the marketplace. Making use of relevant tools such as websites, digital TV, and mobile phones would assist the new entrants to stay ahead of other competitors.
According to Andersen & Schrøder (2010, p22), the new entrants in the same market with Amazon and Waterstone should integrate the following approaches to strategy evaluation or assessment. These approaches are strategic planning, strategic thinking, and entrenching of strategy. In essence, the new entrants should have equipped and competent management team that accommodate and regard critical thinking. This would create a strong platform to innovate ideas and ways to emerge the best in the marketplace. A strategic planning stage can be assessed based on the approach of goal-centered where the management team would consider the need for detailed and accurate plan that relies on empowerment and improvement. In this case, new entrants would have a chance to empower their sales team so that they can respond to the customers’ needs effectively and in a timely manner. This would boost customers’ satisfaction and in turn boost the organization’s growth in sales and revenues. The third approach is entrenching on various strategies such marketing operation that plays a crucial role in scrutinizing external changes and allowing the new entrants to respond adaptively (Andersen 2006, p20 ).
The three assessment tools are important as they would maintain a clear focus of the new entrants to compete with the existing firms in the market such as Amazon and Waterstone. Such tools would enable the management team to evaluate the potential threats and opportunities in the market and this would help them to assess the potential performance and outcome of their chosen strategic operations management perspective. By applying the mentioned assessment tools for operations strategy, the new entrants would be in a better position to compete with the existing firms such as Amazon and Waterstone.
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