Wednesday, March 23, 2016

Amazon's Company Vision in Need of Core Purpose

In the article, “Building Your Company’s Vision” by Collins and Porras, the authors discuss the importance of having a “well-conceived vision” that consists of their core ideology and envisioned future (Collin and Porras). Core ideology is the values and purpose that do not change with the company. Envisioned future is the company’s aspiration for the future and the associated change that is needed to achieve it (Collins and Porras). Amazon is a perfect example of a company with strong established values and a solid envisioned future, yet lacks a core purpose.

Amazon is known to be one of the most customer centric companies today. It is not surprising that one of its core values is customer obsession (Amazon). In a speech by Diego Piacentini, SVP of International Consumer Business at Amazon, he spoke about Amazon’s commitment is to its customers. Back in 2005, Amazon reduced the price of a newly released Harry Potter book in China because a competitor had lowered its price. They subsequently refunded 5000 customers the difference in prices (Piacentini). Although disadvantageous to refund the difference and not culturally the norm in China, Amazon still did it because it was within their core values to give the customer the best possible experience. This is one of the reasons why Amazon’s values are strong because they “stand the test of time,” persist across cultures, and is kept even when it penalizes the company (Collins and Porras).

Amazon has a strong envisioned future. It’s “10-to-30 year BHAG [Big, Hairy Audacious Goal]” (Collins and Porras) is to “build a place where people can come to find and discover anything they might want to buy online” (Amazon). This is an excellent BHAG because it is challenging, clear, and can be something that unifies the company to achieve. All of their strategic decisions point to their envisioned future. Amazon started out primarily selling books in 1997 and has continued to make moves towards adding more product selections to their website.

However, one thing that Amazon is lacking is a core purpose. Why are they striving to become the world’s largest online store? Their mission statement only reflects a 10-30 year goal to get to their unstated core purpose. According to Collins and Porras a core purpose is a company’s reason for existence that has an indefinite time frame (Collins and Porras). It is unclear what Amazon’s reason for existence is. A purpose allows a company to continually change and innovate towards a perpetual goal that never changes and can never fully be attained (Collins and Porras). Once Amazon achieves its current BHAG, it needs to find another BHAG, inspired by its core purpose and values.

In conclusion, Amazon has two out of the three building blocks for a successful strategic vision. It has strong core values that they are fully committed to, a well-defined envisioned future, but lacks a core purpose. Establishing a core purpose will allow Amazon to become an even stronger company than they are now.

Works Cited:

Amazon. “Overview.” Amazon (2013). Web. 23 Mar. 2016. < http://phx.corporate-ir.net/phoenix.zhtml?c=176060&p=irol-Mediakit>

Collins, James C., and Jerry I. Porras. "Building Your Company's Vision." Harvard Business Review 74.5 (1996): 65-77. ProQuest Central. Web. 23 Mar. 2016. <http://gmail.com>.

Piacentini, Diego. "Amazon Global Operations.” Youtube (2010). Stanford Technology Venture Program. Web. 23 Mar. 2016.







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