AMAZON IN B2B Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

AMAZON IN B2B Case Solution

Leading markets for the HVAC (heating, ventilation and air conditioning) systems in Europe, are: France, Germany and Italy etc. These countries earned a value share of about 38% in 2016. The reason for this highly earned value share from these countries was high industrialization, an increased purchasing power of customers in these regions, per head or per unit income earned. Residential parts of Europe over commercial parts of Europe, conquered over the HVAC market in the past few years. Individuals from the residential areas purchase more HVAC system than the people living in commercial areas.

Europe’s heating, ventilation and air conditioning (HVAC) market is anticipated to face an instability in the HVAC business, in the upcoming years,due to the equipment it manufactures by obtaining or purchasing raw materials from countries,like: China, who are known to design and create low cost and cheap materials.

In Europe, the heating, ventilation and air conditioning (HVAC) systems are usually sold via wholesalers. Europeans retailers who adopted new technologies use online sale systems for selling HVAC systems. Customers on the other hand prefer personal service over online service while purchasing these systems.

Key main factors that are driving and shifting the market for HVAC (heating, ventilation, and air conditioning) systemsin Europe,include:

Development of smart homes.
Government promoting the energy efficient initiatives.
Rapid development or urbanization.
Growth in the income across different European countries or economies.

QUESTION 3

Strategic Alternatives for Amazon to Enter HVAC market in Europe

According to the case study;Grundfos has received an invitation from Amazon. Grundfos’Senior Vice President “Mr. Bent Jenson” suspects that the reason for this invitation is because Amazon is interested in selling Grundfos products on Amazon Business.The senior VP is concerned since Amazon has disrupted multiple markets in the past and now it wants to enter the HAVC market.

Grundfos sells HAVC products across Europe, and the only distribution channel the company uses is: wholesalers. The competitors of the company are adopting new technologies and are using the online selling platforms as well.

Bent ordered his team to investigate about the Amazons invitation and about the company and its operations. The findings were shocking for the senior VP. Amazon is already a whole seller of the building materials and the business platform of Amazon records customers behavior insights from major brands that sell their products on this platform. Amazon then uses this data to establish private labels and market those private labelled products using the Amazon basics.

Amazon can use the following three strategies to enter the HAVC systems market in Europe:

Joint Venture with the rulers of the European HAVC market.
Direct Exporting.
Purchasing an already existing company.

Joint Venture with the Rulers of European HAVC Market:

Amazon can start a joint venture with the current leaders of the HAVC market. Amazon can collaborate with Grundfos and enter into this European market. Customers across Europe already trust Grundfos’ products when it comes to HAVC systems and Grundfos is also looking to adapt new technologies to stay in the industry. Both companies can sign a deal and work in a partnership. Both companies can invest in new HAVC business project where the customers would have an ease in purchasing HAVC systems online, while the traditional Grundfos business is operated through the wholesaler’s distribution channel.

Direct Exporting:

Amazon is a giant company and is a huge name in the retail and e-commerce business. Amazon can directly manufacture its own HAVC systems that could be energy efficient, which the company can export directly to the European market.

Taking Over-an Already Existing Company:

Amazon can target any existing company of HACV systems in Europe and can take it over. Taking over an existing company will help Amazon in capturing the market share almost immediately. There will be an existing customer base and brand image.

PESTLE analysis for Amazon if it wants to step foot in the European HAVC market, is as follows:

Political	Stability issues can occur because of different political environments. If Amazon opts for the direct export option; there might be some possible trade barriers. Different laws regarding taxation.
Economic	Raw materials required to manufactureHAVC systems are not cheap. Economic crisis. Growth in the HAVC market.
Sociological	Economic stability of any country in Europe can be impacted by the social culture. Growing importance of quality over price in the customers’ minds.
Technological	Technology is essential for running a successful business. Amazon needs to focus on Research and Development of energy efficient HAVC systems.
Legal	Strict regulation in some of the countries in Europe regarding energy used by the air conditioners.
Environmental	Usage of the energy efficient systems that don’t release harmful gases in the environment.

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AMAZON IN B2B Harvard Case Solution & Analysis