Amazon strategy

Background and purpose

This post tries to translate some of the elements of Amazon’s strategy into Wardley Map syllabus.

The strategy cycle

This is the strategy cycle proposed by Simon Wardley, let’s see how Amazon works its own cycles.

The strategy cycle

1.- Purpose (who we are)

Amazon is guided by four principles:

  1. customer obsession rather than competitor focus,
  2. passion for invention,
  3. commitment to operational excellence,
  4. and long-term thinking.

Amazon strives to be Earth’s most customer-centric company, Earth’s best employer, and Earth’s safest place to work.

2.- Context

There is not a generic map that can cover all amazon context, but if there is one, I would pick this one. Why? Because they started selling books, then other products. The way they were able to increase the products catalogue was using sensing engines (a Wardley Map gameplay).

Amazon, Sensing engines (ILC)

The map is briefly described here:

Sensing engines requires using customer data. They are very focused in capturing data from different sources:

  • Alexa
  • Amazon Dash buttons (2015 – 2019)
  • Amazon dash wand (now with Alexa)
  • AWS services (all their services).
  • Amazon FBA and Launchpad
  • Amazon Prime (Video, music, audible)
  • Roomba (iRobot acquisition),
  • Amazon Warehousing and Distribution (AWD) service (launched in 2022).
  • Amazon HoneyCode (an example of an unit that is in early stage).
  • Amazon’s Halo Rise (bedside sleep tracker, wake-up light, & smart alarm).
  • Echo Auto (2nd Gen- of Alexa to your car).
  • and so on

Sensing engines is not the only gameplay that Amazon uses, they work with so many, but they have been pioneers using customer data thanks to their customer obsession and this determines in someway how they are continually growing.

Ideally each Amazon brand or unit should have its own main map.

The Amazon flywheel was an idea that Jeff Bezos sketched on the back of a napkin, and it can be considered as the map that every employee has in their day to day.

3.- Climate

The analysis of climatic patterns for Amazon cannot be generic and changes during the years. So it’s not possible to me to add comments that could make sense without specific landscape and moment.

4.- Doctrine

In Wardley maps we have the doctrines. In Amazon, the habits, attitudes and mindset expected is determined by Leadership Principles.

Amazon’s leadership principles

When trying to work with an organization, Simon Wardley always says: “doctrines always first”. Amazon takes is aligned with this and their leadership principles are the core of behavior and way to perform, dream and act they have.

In terms of habits and ways of executing the work, Amazon have some other mechanisms and ways to do things that are very representative about the mindset of the organization. Some of them are:

  1. No PowerPoints meetings, 6 pages memorandum.
  2. Working backwards, using the PR/FAQ (Press Release / FAQ) as basis to define what to build.
  3. Recruitment process based on “bar raiser” approach.
  4. Enable mechanism, do not support on goodwill.
  5. S-team goals: goals are set in alignment with the company strategy, are measured and reviewed.
  6. New Product Introduction (NPI) process. It starts in the form of a business case. If the case is approved, then it turns into a priority project for the organization.
  7. Classify decisions into types: irreversible decisions and reversible decisions. Act depending on its impact.
  8. Make decisions when you have about 70% of the required information. If you wait to 90% of information you are being slow.
  9. Weekly Business Review (WBR) meetings.
  10. If you have time and energy, I recommend you to attend one of the Amazon Tours, there you can see some small parts about how a fulfilment center works.

5.- Leadership (Gameplays)

Amazon plays a lot of gameplays, not in isolated way but in coordination with others.

This is a list of short examples of main individual gameplays or set of them:

  • Sensing engines (ILC: innovate – leverage – commoditize).
  • Press release process.
  • Sapping: Amazon has been doing this with Wallmart for a long time, and while Wallmart has certainly had a hard time, it has been able to adapt to the situation. Wallmart online order service with collection is in 2021 a great service. Wallmart has been fighting these mines for years.
  • Land grab: Amazon appropriates “pieces of land” thanks to the use of “detection engines”.
  • Acquisition of capabilities.
  • Creation of products, it contains a set of gameplays.
  • Reinforcing competition inertia:
  • To be completed (it will take a time to complete it 🙂 )

Amazon organizations

Amazon has different internal organizations that are not well known and that cover different areas:

  • Amazon’s Customer Lifecycle Engagement Organization (CLEO).
  • Amazon’s Shopping Foundation’s team.
  • Amazon Advertising (Ads).
  • Amazon transportation services.
  • Amazon Web Services.
    • Critical Projects Implementation (CPI) team. 
  • Amazon Entertainment.
  • Amazon Fresh.
  • Amazon Translation Services.
  • To be completed

Products / services that failed or not reached the desired results

  • Fire phone.

Leave a Comment