Amazons Strategic Alliance with Proctor and Gamble

Document Type:Thesis

Subject Area:Business

Document 1

”(Porter, 1990). It can also be defined as “A strategic alliance is a partnership between two or more firms that unite to pursue a set of agreed-upon goals but remain independent subsequent to the formation of the alliance to contribute and to share benefits on a continuing basis in one or more key strategic areas, e. g. technology, products. ”(Yoshino & Rangan, 1995). This alliance helped Amazon increase the efficiency of its supply chain while increasing profits at the same time. The management of a supply chain employ systems that link all the processes and levels of the supply chain and this may prove to be very challenging for a company with a huge customer base as Amazon. Amazon is constantly challenged to ensure that they are achieving the best innovation and that their supply chain is the most efficient globally.

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This is one of the major reasons that prompt them to enter into alliances with other companies. Amazon success is greatly attributed to their ability to enter strategic alliances with other companies and their competitors hence adding value to products, improving market access, strengthening operations, adding technological strength, enhancing strategic growth and forming alliances with logistics partners. This enables them to meet the huge demand of product varieties by their vast customer network. Their supply chain enables the, to track their items while on transit and even sell some products before they reach the destined warehouses. The alliance with P&G has allowed Amazon to use more than eight of their warehouses which are located in different geographical locations. This has increased the reach of Amazon products to customers and also created a new market for Amazon products.

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Amazon products in P&G warehouses can now be accessed by Proctor and Gamble customers and thus expanding the market base for Amazon products. Amazon had the opportunity to use P&G’s programmatic to reach their target customers in an efficient and effective way. Proctor and Gamble on the other end enjoy the e-commerce platform employed by Amazon in marketing its products. This partnership has enabled Amazon to further build other strategic alliances with other companies by utilizing their combined technological strength. Recently Amazon entered into an alliance with Infosys “a global leader in consulting, technology and next-generation services have announced a global strategic initiative with Amazon Web Services (AWS) to make transitioning to the cloud easier and faster. Infosys will use AWS to host a suite of Infosys technologies that will help enterprise customers securely adopt cloud-based systems swiftly.

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Amazon has set up approaches that are utilized to efficiently integrate suppliers, manufacturers, warehouses, and stores thus ensuring that merchandise is produced and distributed in right quantities, under the right conditions. This ensures minimization of system-wide costs and satisfaction of requirements (Yang, et al. Amazon was also able to gain technological expertise from these third-party providers on monitoring and tracking of materials and deliveries. Using 3PLs transfers all the responsibilities of labor, transportation, and scale space. This allows the company to focus on expansion and improving sales without worrying about deliveries while the seasonal period pressure is transferred to the logistics provider.  Canada Newswire. Porter, M. E. Competitive Advantage of Nations. NewYork: The Free Press, 1990. , & Simchi-Levi, E. (2008) Designing and managing the supply chain: Concepts, strategies and case studies.

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