Featured case:
Amazon Marketplace: Sustaining Strategic Innovation

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The case

Who – the protagonist

Alex Zimmer, Vice President of new product development at Amazon Marketplace.

What?

Amazon Marketplace is an e-commerce platform owned and operated by Amazon that enables third-party sellers to sell new or used products on a fixed-price online marketplace alongside Amazon's regular offerings.

Why?

Alex wanted to introduce the Seller Fulfilled Prime (SFP) initiative to the Amazon Marketplace.

SFP would allow qualified sellers to flag their product listings as eligible for Prime’s two-day delivery but send the orders from their own locations and distribution centres instead of from an Amazon facility. At the time, the only sellers’ fulfilment experience with the Prime promise was Fulfilment by Amazon, which required sellers to ship their merchandise to an Amazon warehouse and use Amazon Fulfilment to deliver the product to Amazon customers.

Where?

Alex was ready to convince his senior executives and operational managers at the Amazon.com Inc. campus in Seattle, Washington.

When?

It was June 2015 when Alex was attending the three-year planning session.

Key quote

“Even though it might be challenging in the near term, we know this will help those sellers who can deliver an exceptional customer experience, grow their businesses while providing even more great options for end-customers.” – Sarah Miller, team lead in customer service.

What next?

Alex knew he would face rigorous questioning at the session about his proposal. He would have to clearly demonstrate the value of SFP for marketplace sellers and end-customers, the potential for SFP to contribute to Amazon’s growth, and the link between Amazon’s culture and the innovation.

 
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Amazon Marketplace: Sustaining Strategic Innovation
Ref 9B20M019

Teaching note
Ref 8B20M019

The authors

author

Yemisi Bolumole, Jeff Cohu, Harrison McKnight, Antoinette Tessmer, Lu Zhang, Jeffrey Beck, Karen Sedatole and Judith Whipple

Judith discusses the importance of having access to high level Amazon leaders for this case, and the appeal of strategy cases.

High level access

Judith said: “The case is unique because it highlights Amazon’s process of innovation through a multi-disciplinary lens. It was written by a team of faculty with expertise in finance, hospitality business, information systems, management, and supply chain management so it takes on a very strategic perspective. 

“It is also unique in that the case writing team visited Amazon’s headquarters in Seattle, interviewed over a dozen high level Amazon leaders with different functional responsibilities, and toured the facilities. This provided the case writing team an in-depth understanding of the innovation culture at Amazon.  Furthermore, it enhanced the cross-functional perspectives of the case.”

Brand familiarity

Judith continued: “Almost everyone has experienced Amazon Marketplace first-hand. Such strong familiarity across domestic and international students definitely generates discussion and debate.

“Furthermore, given the multi-disciplinary nature of the case, there are various angles from which a faculty member can position the case as well as how students perceive different aspects of the case. The cross-disciplinary nature of the case illustrates multiple challenges and trade-offs (i.e. cost-to-cost as well as cost-to-service trade-offs) that managers have to consider when making strategic decisions and implementing innovations. This approach enables rich classroom debate.”

amazonImmersing yourself in the culture

She added: “Identifying the dilemma of the protagonist was quite easy to do given the direct interaction between the case writing team and Amazon’s leaders. 

“This field research approach allowed the team to truly immerse themselves in the company culture and provided a greater depth of understanding of the case scenario. 

“The team was able to have in-depth discussions with the key managers that proposed and implemented the Seller Fulfilled Prime initiative, to understand the challenges and hurdles that had to be overcome to launch this successful initiative. This provided a clear view of the rigorous process that Amazon uses to vet new innovation projects for funding.”

Appeal of strategy cases

Judith concluded: “Students and faculty alike prefer strategic cases because they enable a breadth of discussion that emanates from broader, multi-functional considerations and trade-offs. Every strategic decision involves both risk and reward, and this case is no exception. The tension behind calculated risk-taking in an uncertain situation is what makes strategic cases so intriguing to discuss. 

“In addition, strategic cases provide a ‘big picture’ perspective that students appreciate.  Students are able to combine the various tools, techniques, frameworks, and ideas that they have learned across a variety of classes in order to evaluate the case’s strategic issues.”

About the authors

An Ivey Publishing case by:

Yemisi Bolumole is Associate Professor of Supply Chain Management at Michigan State University Broad College of Business.
boulmole@broad.mus.edu

Jeff Cohu is Associate Professor of Management at Lipscomb University College of Business.
e jeff.cohu@lipscomb.edu

Harrison McKnight is a Professor at Michigan State University Broad College of Business.
mcknight@broad.msu.edu

Antoinette Tessmer is Fixed-Term Faculty at Michigan State University Broad College of Business.
e tessmer1@msu.edu

Lu Zhang is an Associate Professor at Michigan State University Broad College of Business.
zhanglue@broad.msu.edu

Jeff Beck is an Associate Professor at Michigan State University Broad College of Business.
e beck@broad.msu.edu

Karen Sedatole is John H. Harland Interim Dean-Elect at Emory University – Goizueta Business School.

Judith Whipple is Professor of Supply Chain Management at Michigan State University Broad College of Business.
whipple@broad.msu.edu

 

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