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Unit 13 D1 Btec Level 3 Business

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D1 Unit 4– Evaluate the appropriateness of business information used to make strategic decisions.

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D1 Unit 4– Evaluate the appropriateness of business information used to make strategic decisions.

Strategic decisions made by Amazon. Inc:
Amazon uses a lot of information from different sources to help them make important strategic decisions. Some of these decisions include lowering prices and market judgement. Many of their important decisions are made with data.
Lowering Prices:
Amazon has made a decision to continuously and significantly lower prices for customers year after year as their efficiency and scale make it possible. When they lower prices, they don’t just look at the numbers, which always says that the smart move is to raise prices. They have significant data related to price elasticity. With fair accuracy, they can predict that a price reduction of a certain percentage will result in an increase in units sold of a certain percentage. With rare exceptions, the volume increase in the short term is never enough to pay for the price decrease. However, their quantitative understanding of elasticity is short-term. We can estimate what a price reduction will do this week and this quarter. But they cannot numerically estimate the effect that consistently lowering prices will have on the business over five years or ten years or more. Their judgment is that relentlessly returning efficiency improvements and scale economies to customers in the form of lower prices.
Market judgement:
Amazon has a large network with information that estimate seasonal peaks and to model alternatives for new capacity. They look at anticipated product mix, including product dimensions and weight, to decide how much space they need and whether they need a facility for smaller

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