Amazons Business Model and the Operational Strategies Coursework - 1

Amazons Business Model and the Operational Strategies - Coursework Example Amazon has been able to pull of its business model through the use of three operational strategies to enhance its competitive advantage: low-cost leadership and customer differentiation. However, when we evaluate Amazon’s business model and the operational strategies that underlie it they greatly resemble those of its key competitor Barnes & Noble. Barnes & Noble also used its economies of scale to support low-cost leadership, it broke new ground by developing software that would enable its customers to personalize their web pages and also enjoy the results of collaborative filtering (Ghemawat 13). The difference in one organization’s choice to use a pure play system while the other uses a brick-and-click system is too simplistic to explain the relative success of Amazon.com over Barnes & Noble. This would be best explained through the dynamic capability. Dynamic capability refers to the ability of the firm to purposefully create, extend or modify its resource base so as to achieve congruence with the changing business environment (Menon and Mohanty 3). Of importance to note is the use of the word â€Å"purposefully† which negates the element of accident or luck. Dynamic capability involves intent and the emergent stream of activities within an organization that is taken with a certain implicit aim. Although dynamic capabilities are equifinal and exhibit commonalities across firms, performance differences arise between firms due to both cost and differential timing with which the dynamic capabilities are used (Menon and Mohanty 5). They are path dependent processes thus are idiosyncratic and difficult to imitate. Dynamic capabilities can be a source of competitive advantage. That is why even though Barnes & Noble seem to be following similar operational strategies to Amazon.com, the results are different for each firm.