Reference no: EM133086291

The partnership between Amazon and Goldman Sachs, who did it benefit more? Amazon or Goldman Sachs?

Reference below 

1) The companies that Amazon has partnered with are as follows

• Goldman Sachs which is an investment and financial services bank based in the United States, it partnered with Amazon in the year 2020.
• Kohl's, which is an American retail stores that is departmental in nature; It partnered with Amazon in 2019 July.

2) The type of cooperative strategy between Amazon and Goldman Sachs is joint venture strategic alliance. This is a type of alliance/cooperation where parent companies establish a new company, product, or service where benefit sharing is determined (CFI, 2021). The two companies joined forces to establish credit lending lines to merchants operating on Amazon platform. This service is digital where loan application is easier with the merchants getting real time credit approval results. The type of cooperative strategy between Amazon and Kohl's is non equity strategic alliance. This is a type of strategic alliance/cooperation in which companies accept to pool their capabilities and resources for mutual benefits (CFI, 2021). Through this partnership, Kohl's accepted Amazon customer's purchases returns and exchanges in their stores.

3) The purpose of the cooperation between Amazon and Goldman Sachs was to change the competitive financial environment. In this economic environment, merchants face delays and numerous credit rejection by many financial institutions crippling their activities. This credit service is a win-win for both companies, Amazon's merchant through the Bank of America corporate credit would be able to secure credit services enhancing the continuity of the online sales platform and Marcus credit line fees as a source of revenue. On Goldman Sachs, the investment bank will benefit from high credit interest rates (21%) and penalty fees resulting from late payments and credit line non-usage (Shelvin, 2020). The purpose of the cooperation between Amazon and Kohl's was to improve operations through enhancing customer experience for both the companies. This is due to Kohl's stores close proximity to many people coupled with Amazon's enormous outreach to customers. In the end Kohl's is able to acquire new customers traffic seeking returns or exchange of purchases made on Amazon, while Amazon is able to be sure that its customers are satisfied with purchases enhancing good customer relations (Stabile, 2020).

4) The results of the cooperation between Amazon and Goldman Sachs was diversification of loan portfolios challenging most banks to consider doing the same. Upgrade in the credit underwriting process which can be monitored in real time besides being fast and relying on minimum parameters such as sales data, cash flow and revenue. lastly this partnership enhanced embedded lending through integrating banking services on mobile applications and non-financial platforms (Shelvin, 2020). The results of the cooperation between Amazon and Kohl's enhanced Kohl's survival in the market by avoiding Amazon disruptive market force. Kohl's has also benefitted from high customer traffic resulting in increase in sales, it has also created omnichannel to its customers who can use Amazon platform and their physical stores to make purchases (Stabile, 2020) (Podean, 2020).