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Covid-19 and the Establishment of Amazon in Norway

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Covid-19 and the Establishment of Amazon in Norway SARPSBORG 01.06.2021 Covid-19 and the establishment of Amazon in Norway A Comparative Case Study on Their Impacts on Norwegian Omni- Channel Retailers in the Consumer Electronics and Home Appliances Industry Lennart Harlinn Thesis Supervisor: Christine B. Meyer Master’s Thesis – Strategy and Management Norwegian School of Economics This thesis was written as a part of the Master of Science in Economics and Business Administration program at NHH. The institution, as well as the supervisor, are both bereft of any responsibilities regarding the theories and methods used, or results and conclusions drawn in this thesis. Preface I would like to thank my supervisor, Christine B. Meyer, for all her help during this process. Her insights, suggestions and views were most helpful, especially in determining which field of research to pursue. I would also like to thank Camilla Winsvold for supporting me through the entire project. Sarpsborg, June 2021 Lennart Harlinn 1 Contents 1. Introduction ........................................................................................................................................ 4 2. Theory ................................................................................................................................................. 6 2.1 Resource management during environmental uncertainty .......................................................... 6 2.2 Resource Based Theory ................................................................................................................. 7 2.2.1 The dynamic value of resources and their interdependencies .............................................. 8 2.2.2 Sources of sustained competitive advantage and barriers of imitation ................................ 9 3. Research setting ................................................................................................................................ 14 3.1 Elkjøp Norge AS ........................................................................................................................... 14 3.2 Power Norge AS ........................................................................................................................... 15 3.3 The Covid-19 pandemic and Norwegian retail ............................................................................ 15 3.4 Amazon.com, Inc. ........................................................................................................................ 16 3.5 Summary...................................................................................................................................... 17 4. Methodology ..................................................................................................................................... 18 4.1 Background philosophy ............................................................................................................... 18 4.2 Research Objective and Research Question................................................................................ 19 4.3 Research Approach ...................................................................................................................... 19 4.4 Research Design and Strategy ..................................................................................................... 20 4.4.1 Data Sources ......................................................................................................................... 20 4.5 Data Collection ............................................................................................................................ 21 4.6 Quantitative Data Analysis .......................................................................................................... 22 4.7 Qualitative Data Analysis ............................................................................................................. 24 4.8 Research Quality .......................................................................................................................... 25 4.8.1 Reliability .............................................................................................................................. 26 4.8.2 Credibility ............................................................................................................................. 26 4.8.3 Transferability ....................................................................................................................... 27 4.8.4 Confirmability ....................................................................................................................... 28 4.8.5 Ethical considerations........................................................................................................... 28 5. Research Findings ............................................................................................................................. 29 5.1 The impact of Covid-19 on Norwegian retail .............................................................................. 29 5.1.1 Retail sales in consumer electronics and home appliances during Covid-19 ....................... 29 5.1.2 Changes to consumer shopping habits ................................................................................ 30 5.1.3 Development in retail sales .................................................................................................. 31 5.2 Courses of action taken by Elkjøp and Power in response to Covid-19. ..................................... 37 5.2.1 Elkjøp .................................................................................................................................... 37 5.2.2 Power .................................................................................................................................... 40 2 5.3 Courses of action taken by Elkjøp and Power in response to an establishment of Amazon in Norway .............................................................................................................................................. 42 5.3.1 Elkjøp .................................................................................................................................... 42 5.3.2 Power .................................................................................................................................... 44 5.4 Relevant Elkjøp resources, customer offerings and services ...................................................... 45 5.5 Relevant Power resources, customer offerings and services ...................................................... 49 5.6 Amazon as a multi-sided marketplace and its effect on retail in general ................................... 51 5.6.1 Amazon Prime ...................................................................................................................... 52 5.6.2 Digital services .......................................................................................................................... 53 5.6.3 Payment services .................................................................................................................. 55 5.6.4 Amazon physical stores ........................................................................................................ 56 5.6.5 Amazon webstore ................................................................................................................. 57 5.6.6 After having purchased a product ........................................................................................ 59 5.6.7 Amazon Staff Training .......................................................................................................... 59 5.6.8 Excerpts shareholder letters and interviews ........................................................................ 60 6. Discussion .......................................................................................................................................... 61 6.1 The Impact of Covid-19 on Elkjøp and Power ............................................................................. 61 6.2 The impact of Amazon entering the Norwegian market ............................................................. 63 6.2.1 The imitability of human capital resources and assets ........................................................ 64 6.2.2 The imitability of service offerings ....................................................................................... 65 6.3 Amazon versus Covid-19 ............................................................................................................. 68 7. Conclusion ......................................................................................................................................... 70 8. References......................................................................................................................................... 72 9. Appendix A ........................................................................................................................................ 77 3 1. Introduction During 2020, the Norwegian society was heavily affected by the Covid-19 pandemic. Some industries, such as domestic and international travel, experienced severe losses to their revenue streams almost overnight. Restrictions imposed by the Government forced many stores to close during large periods time, as well as they encouraged people to stay home and avoid unnecessary physical contact with others to contain the spread of the virus. (Tushman & Anderson, 1986) points
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