Blue Ocean Strategic Sequence for Amazon.com
To create a Blue Ocean Strategy company there has to be Strategic Sequencing
. The components of BOS strategic sequencing are: buyer utility, price, cost, and adoption, in this order.
It is very important that each component of the sequence be in the same order as listed in order to successfully create a Blue Ocean for any company.
A company may have all of these components already, but may not be putting them in the correct order or putting enough time and energy into the components.
We are going to look at how Amazon is doing in each of these categories.
The first component of the sequence is the buyer utility of the company, this means that the Amazon needs to have a compelling enough reason for customers to purchase from them. The online site offers its customers the option to buy and sell their own items, and carries a wide range of products. This utility is extremely attractive to customer but there are other sites that allow this too. Next the second component is price.
Setting the right price is key in creating a Blue Ocean strategy organization. The store needs to provide attractive and reasonable price to their customers without relying solely on price being the influence of demand. Amazon allows customers to create an account and buy and sell items at a lower than average cost than most retail stores. Allowing customers that sell on the Amazon site to set their own prices with many different sellers to choose the best deal in my opinion contributes to the price component.
Third in the list of components are the costs. Costs are normally the main thing that drives prices. This should not be the case, the company should be able to meet target cost without forgoing utility or driving costs up. Amazons customers set their own prices therefore it would be difficult to tell if they are setting the prices of their items based solely on the costs of them.
And the final component is adoption. Evolving into a Blue Ocean Strategy company involves addressing the adoption hurdles before you put your idea into place. Your new ideal or strategy may face many speed bumps along the way but you have to be ready for these, if you are not ready then your move to becoming a BOS company may fail.