Amazon Company Analysis in Several Aspects - Case Study Example

University

Abstract

The paper majorly focused on the strategic plan of Amazon Company as well as its objectives and how it runs its activities. Amazon Company is considered not to depend much on the sales, but most of its items as well as content are from the sellers. Hence the Brand of Amazon strength is seen to be based on the content that is user-generated and thus it can be adapted quickly to the needs of the users. There is as well creation of niche by Amazon where unknown and new authors are promoted. They ensure that its relevance is at bay as well as the new technology is turned to be standard. Based upon research it can be suggested that there are several trends considered to influence online retail sector and they include current business models, distribution revolution, marketing that is personalized, mobile and multichannel commerce and demographic. Each of the listed trends is considered to be individually powerful and generally they are all associated with the success of a retailer. Amazon Company is considered not to depend much on the sales, but most of its items as well as content are from the sellers. Hence the Brand of Amazon strength is seen to be based on the content that is user-generated and thus it can be adapted quickly to the needs of the users.

1.0. Introduction

Amazon Company is considered not to depend much on the sales, but most of its items as well as content are from the sellers. Hence the Brand of Amazon strength is seen to be based on the content that is user-generated and thus it can be adapted quickly to the needs of the users. More Power to the consumer can be achieved from every business in relation to user-generated content. Amazon puts much focus on the optimization of content and this is normal to any other business online where the given listing is presented appropriately in search engine (SERPs). The Amazon search engine is seen to be refined where the desired content being looked for is brought up. Amazon is seen to advance to new territories and this is part of being a head of the curve. These new territory are such as Hollywood which is considered not to be associated with online retail site in any way. It has been reported that Amazon has opted to invest in several television programs or movies (over 30 in number). Prior to tablets and e-readers emerged to be mainstream, there was an attempt by Amazon to invest in the market. These move was considered to be risky where tablets were considered to be a a new technology that was growing very fast. In this respect, the company decided to come up with Kindle rather than putting much focus on e-readers and tablets and hence this lead to them to be recognized and have their own stamp in the market which was growing very fast. There is as well creation of niche by Amazon where unknown and new authors are promoted. They ensure that its relevance is at bay as well as the new technology is turned to be standard.

2.0. Model of strategic decision making

Based upon research it can be suggested that there are several trends considered to influence online retail sector and they include current business models, distribution revolution, marketing that is personalized, mobile and multichannel commerce and demographic. Each of the listed trends is considered to be individually powerful and generally they are all associated with the success of a retailer. For the past decade, there has been a high growth rate of e-commerce in the United States and it is approximated at 8% of the retail sales. Based upon the adoption of smart phones the penetration is seen to have gone beyond 40% and it is predicted to go over 60% in the next three years. It is expected that digital market will explode and hence leading to shopping being brought closer to the consumers. Mobile is considered to be a critical factor to certain retailers where: For example, at designer fashion, mobile is responsible for at least 30% of total sales as well as at least 50% of traffic daily. Every customer’s stage of shopping behavior is suggested to be influenced by mobile technologies. This is seen to be from geo-targeted promotions to in price checks and in-store research. This is as well to payment abilities that consider checkout alternatives.

Amazon company is seen to offer delivery services in several cities, 10 to be specific where ground delivery of at most two days is guaranteed in the entire USA. It is not expected that the consumers will expect the shipping speed that is comparable from all the given retailers. It is expected that the day delivery will be achieved soon in almost all the statistical areas associated with at least 75% of the entire population. It is as well expected that free shipment will be provided to the clients considered to be loyal as well as profitable as this will be contrary to the free shipment services provided only to those making minimum purchases. It is as well expected that the distribution of third party services to expand as well as evolve. There could be huge investments made by certain companies and this may include infrastructure and service distribution to Amazon as well as e-bay. Investment in infrastructure is as well evident where secure and convenient package delivery is guaranteed. It is seen that retail competition gets tougher each day. For instance; manufacturers like Nike and Apple for instance are seen to sell their products directly to consumers. It is as well seen that there is a completion between the tech players where they fight for retail dollars of consumers: At least one billion products are provided for sale by Google where they could soon be opening retail stores. Furthermore, tech companies such as Etsy and e-bay are seen to generate marketplaces where entrepreneurs and individuals are able to sell their products to a big number of people of masses. Lastly, Aftermarket as well as rental- circulation models like Rent the Runway and Chegg for textbooks are seen to be advancing into traditional demand associated with retail products.

Competition is seen to emerge from within or further away as the retailing is made more advanced globally by technology. This is considered to not to have ever existed, for instance, free shipment services provision globally at a fee that is too small. There was no much worry regarding global competition until recently where stores have started to emerge in the streets and hence technology is being changed of contribute to barriers break down as well as producing current retail models of business.

Such trends will lead to straining of the economic model of the traditional retailers where they will be faced with challenges at both ends. The major challenge associated with revenue front is expected to emerge from the shift of channel: There will be a growth in the in store purchases every year where the Gross margin will be subjected to pressure associated with shelf space and price transparency in physical stores as well as there will be brand promotion in the digital context or arena. For revenue to be increased there should be effective management of gain share, capital as well as investment for at least a period of 10 -15 years.

3.0. Marketing Objectives

• Provide a broader marketing angle to allow people to find the suitable products to buy and hence this enhances growth and profitability.
• Provide knowledge that is invaluable to new persons.
• To ensures that the products do conform to legislation

4.0.Current position

How it is defined itself: Positioning ourselves,Positioning the target market and Position the competitors

5.0.Competitive Advantage

Strength and weaknesses of the competitions

Advantages

This is neither new nor diluted market,they learn from each other and get experience.

Product/services: Amazon puts much focus on the optimization of content where the given listing is presented appropriately in search engine (SERPs). The Amazon search engine is seen to be refined where the desired content being looked for is brought up.

Amazon is a big brand known globally

Disadvantages

There is much competition because there are no many competitors around such as ebay etc.

6.0.Growth Plan

Short term:

To have Successful growth, innovative services or products, act as a team in market,to ensure quality, networking in the company, strong customer relationship. Improvement of the official website (e-business) which has already been accomplished

Long term:

Expansion to other parts,increase market share,increase service lines,find new markets.

7.0. Business Strategy

7.1. Mission

• To be a client centric company on earth: to create a place suitable for finding as well as discovering anything to buy.
• To provide a broader marketing angle to allow people to find the suitable products to buy

8.0 PEST analysis of external environment

Political factors

USA is considered to be a developed economy and it administrative system is seen to be stable politically. However, Amazon company needs to put into consideration political and legal factors related so that its performance is enhanced

Economical factors

To set wage levels, Amazon Company normally take into consideration a two-pronged approach. External data must be employed in order to establish strategic overall pay policy guidelines for the company. Furthermore, evaluation of a sound job methodology is supposed to be employed in determining the company's jobs relative internal value. The inflation rate of is also taken into consideration and it is has an advantage since USA has a low inflation rates when compared to other economies.

Ecological Factors

On ecological perspective, for Amazon company to run effectively, it has legal certified documents, the brand name registration; dream supplier logo qualification. This being a limited company,we have varied and many legal requirements that are needed to be adhered to.There can be a fine if they are not met.They include employment laws whereby it needs looking for working tax credit,stututory sick,maternity leave,pay and employer’s liability insurance such as health and safety law and tax laws.there is a lot of work involved in running this limited company as comapred to a sole trader or partnership.

Social factors

Mostly,consumers are known to consider the social effect of the money spent.Some might end up paying more in order to support the sellers who maintain sustainable practices. Others can avoid companies that are notorious for either unethical or irresponsible practices.More importantly,the Amazon Company is required to consider the social and ethical ramifications of their actions together with their suppliers actions.The negative publicity of the manufacturer,for instance,might hurt sales in each store in supplies.

Technological factors

The management of resources have been taken into consideration in the company. In general, resource can be seen to represent a step that might result to the technological system implementation. In the company, there are programs for resource management by the staff. Basically, the aim here is to efficiently manage the company’s operations.

Figure 1: Michaels Porter’s 5 forces (Source: Porter, 1998).

Supplier power.

Our suppliers that include product suppliers hardly increase the prices. There is huge number of suppliers of each essential products such as books, electronics, wires fabrics etc. Their product or service is really common and switching cost from one supplier to another is low.

Buyer power.

The buyers may not lower their prices and hence an everage buyer’s number do exist on the market. The company has been provided with a few powerful buyers. Powerful buyers often do dictate terms. Requierment for changes is possible, there is no switching of costs as well as there is undifferentiated product. It is usually not possible for buyers to lower the prices. There is always an average number on the buyers in the market. Every individual buyer may buy or may not buy

Competitive rivalry.

There exist a huge number of competitors in the market. They have enormous capability due to havingexisted for a while. Several competitors that procide offering undifferentiated services and products that must probably lower the market attractiveness. They have enormous capability due to having existed for a while. Several competitors that proceede offering undifferentiated services and products that must probably lower the market attractiveness.Strong between international players or alliances through cutting of prices,Increased rivalry in price segment that is high through added values.similiarized competitors,lack of differentiation.In this regard there is a very strong and intensive competion

Threat of substitution.

There is a low threat substitute and there are no products that are close substitute which normally exist in a market.It raises customers’ possibily to switch switching to alternatives in response to the increases price. Such is known to reduces both the suppliers’ power as well as the market attractiveness. High for international players,high capital is critical ,there are still legal barriers and possibility of new entrance through alliances

New entry threat.

There is medium threat of new entry. Markets that are Profitable attract new entrants. Such market is seen to be not very profitable. This industry doesn’t have durable and strong barriers to a given entry. For instance, capital requirements, low government policies, patents- no, or, profitability might be able to decline to a competitive rate. Markets that are Profitable attract new entrants. Such markets are seen to be not very profitable. This industry doesn’t have durable and strong barriers to a given entry. For instance, capital requirements, low government policies, patents, or, profitability might be able to decline to a competitive rate.

Since Porter’s Five Forces analysis indicates that there is a static state,it can be supported by BCG strategic Environments matrix.In the matrix,the budget Arline Segment that is valid for ‘Sole Suppliers’From this analysis,it can be stated that;

• Online retail such as Amazon Company which comes from stalemate to the volume segment has much focus on the expectations of the actual customer hence cost competitive.

9.0. SWOT analysis

In regards to enhancing its growth, profitability and survival, there is need to consider the analysis of advantages and disadvantages associated with the company’s operations. These factors can be analysed using SWOT

Table 1: SWOT analysis

Relevant

Not relevant

Internal Origin

Strength:

Capturing Maximum Market Share

Customer satisfaction

Autonomy lose

External Origin

Opportunity:

Competitive advantage

Market presence

Building strong customer relationships

Threat:

Competition

Fluctuating circumstances

The table above clearly shows that strength, weaknesses and opportunities is exhibited prominently. On the other hand, threat is seen to be exhibited prominently in relation to company’s operations. These listed threats should be avoided during companies operations.

10. Customer Trust

This implies to earn the trust of the customer through product quality as well as accountability and responsiveness to partner and customers

11. Broad customer connection

This implies to connect with the customers in a broad way, to understand their needs as well as use of technology and offering support when they have a concern or question

12. Responsible, innovative and evolving platform leadership.

This implies to expand the platform innovation, opportunities and benefits for partners and customer, openness in the discussion of the future directions, working with other and getting feedback to make sure that their product and the company platform work well together. Human resource is being mobilized gradually to provide what is sufficient to organizations as compared to the keeping of records employee benefits administration and payroll (Klink and Boon, 2002).Actually, several transactional functions responsibilities that were formed traditionally the core of the responsibilities of the human resource departments are currently outsourced in order for the organizations to be able to focus on the strategy of the business through the management of the talent and the activities of leadership development. Though, it is believed that the functions of HR and the departments in several organizations never involve strategic roles (Lawler and Mohrman, 2003). The functions of HR as well as the department are bound typically through several organizational factors, including the organization’s staff size.

13. Low-cost and differentiation strategies

In what way do the organizations determine the type of functional areas that are critical to the strategy of the organization, critical function’s priority to be the best way of assigning and developing staff to such given functions (Losey, 1999). While it is seen that the staff size has a clear influence on the budget as well as headcount within the management function or department, there might be other contributing factors towards decision making on the responsibility of the management as well as the area staffing.

It is crucial to understand the way management is approached in the organization context that operates in Understanding how strategic is approached in the context of the organization (Lawler and Mohrman, 2003).

14. Long-term corporate objectives associated with strategic managers

To manage change in the organization can be more successful if the simple principles are applied. To attain personal change might me more successful too only if the same approach is applied accordingly. Management of change involves sensitive implementation as well as thoughtful planning, and most importantly, consultation that involve persons impacted by the changes (Gouillart et al, l995). If change is forced on the persons, usually problems are seen to emerge. Change is required to be measurable as well as achievable. Such aspects are particularly critical to personal change management. Prior to the starting of the organizational change, what is required to be asked is: What is supposed to be met with such a change, why, and in what way might we suppose to know that there was an achievement of the change? Which individuals that have been impacted by this type of change and in what way will they react? What degree of this change that can be met by ourselves and what portion of this change requires help in order to be achieved. Such aspects correlate strongly as well to the management organization change and personal change (Hutton, 1994).

It is advisable not to ‘sell’ to persons as a means of enhancing implementation and agreement. This has been portrayed in the case study presented which is not a good act. To sell change to persons is not an appropriate strategy to be successful (Hutton, 1994). When persons happen to listen to a senior management individual that is ‘selling’ to them a change, diligent individuals who are decent might basically smile as well as pretend to have accepted what has been presented, but in real sense back in their minds are saying or thinking, "Am not into this. They haven’t involved or consulted me in depth (Hutton, 1994). They are trying to manipulate me. Such changes are going to be of benefit to the directors as well as the owners, but not I, so definitely, am not ready to cooperate, and at the end of it all, am likely to resist as well as obstruct such a change.” (And such is just an amenable form; forced employees might embark on a more serious change). In relation to this, change is required to be managed and understood in a manner that persons are able to cope appropriately with it. Change is known to be un-settling; therefore, the managers are required logically to be a settling influence (Hutton, 1994).

It is also advisable that persons impacted by the change are supposed to be checked to see if they agree with it, or are able to understand, the urge for change, as well as have the opportunity to make a decision on the way the change might be managed, as well as to be engaged in the implementation and planning of that particular change (Gouillart et al,l995). Face to face communication is suggested to be applied in order to be able to tackle very sensitive cases of the organizational change management. The managers are required to be encouraged to communicate face to face with their persons who are contributing towards the management of the organization change. Written notices as well as email are known to be extremely weak when it comes to developing and conveying understanding (Gouillart et al, l995).

If a change is required urgently then the reasons need to be probed. For instance, is the urgency real? (Gouillart et al, l995). Will the impact related to the agreement based on a more relevant time frame really be more dangerous as compared to the when presiding over a change that is disastrous? Change that is quick hinders an appropriate consultation as well as involvement, which might lead to problems that usually take longer to resolve (Carr et al, l996). In regards to changes that are complex, it is suggested to refer to the project management process, and it should be made sure ensure the augment should be with consultative communications in order to gain support as well as agree for the reasons stipulated for change.

15. Strategy implementation

To inform and involve persons can as well stage opportunities for other people to participate in the process of implementing and planning the changes, which will lighten the person’s burden, spreads the load of the organizational, as well as lead to a sense of familiarity and ownership among the persons affected (Carr et al, l996). In regards to the change of the organization that involves new actions processes and objective for a team or group of persons, it is suggested to apply workshop in order to meet the plan understanding involvement, measurable, aim action and commitment. The management should be encouraged to apply the workshops with their personnel too if they are contributing towards the change management (Carr et al, l996). It is further proposed that such principles are needed to be applied to a tough change such as making persons closures, integrating and redundant merged or acquired organizations. Alarming news is required to be managed more carefully as compared to the routine change. To hide behind the middle managers as well as memos might lead to worse outcome. To consult persons as well as helping them in understanding cant weaken the personal stand not, but rather it strengthens it (Carr et al, l996). Leaders known of not involving and consulting their persons in the management of bad news are considered to be short of integrity and weak as well. When people are treated with respect and humanity the will later reciprocate (Carr et al, l996).

16. Qualities of good short-term objectives

The employee has no responsibility of managing change. His or her responsibility is to do the best and this is different for each person and is based on abroad type of factors that include health stability maturity, personality experience and motivation (Carr et al, l996). The role of change management is with the executives and management of the organization they are supposed to manage change in a manner that will enable employees to cope with it. The responsibility of the manager is to enable and facilitate change and all that is included within the statement, particularly in understanding the situation from the objective point of view and then helping individuals to understand aims ,ways and reasons of positively responding positively basing on the capacities and situations of the employee (Carr et al,l996).

17. Amazon Value chain

Equity or fairness is a major theme in the compensation practice and theory that emerges from different contexts. For instance, in relation to the case study, there are key areas that include:

• The economic and legal matter related to equal pay customer satisfaction
• Customer satisfaction through market pressures or external competition.
• The individual wage rates and customer satisfaction fairness
• Customer’s views in regards to their value in relation to their loyalty.

The approach of the company strategic plan is so critical similarly to the actual customer satisfaction and employee pay programs that it can implement. Typically, Companies put more focus on the external factors in designing their strategic plan as well as programs which are known to be competitive with other existing companies in a relevant to the markets. Customer satisfaction perceptions might as well have an influence on the ability of the company to retain attract as well as motivating its customers and employees. Perceptions of customers and employees on inequity and equity are equally crucial and must be taken into consideration carefully when the compensation and satisfaction objectives are set up by the company. Employees and customers that can perceive equitable pay and services treatment might be motivated more to support and enhance the company performance. However, individual employees and customers are known to perceive equity and treatment in several various manners. Hence, it becomes a bit hard to point out a definition of equity and customer satisfaction which can be applied to all scenarios (Carr et al, l996). In summary, compensation equity and customer satisfaction consist of a practical and conceptual challenge: the way of reconciling the ability of the company to pay financial resources.

The ‘‘strategic wage-level policy’’ must consider not only the external labor market vice, but as well the job families and jobs that are known to be important to the organization success that is long-term. Such might contribute towards the meeting of the company’s external equity objectives. The evaluation of internal methodology places the organization in apposition that it can address its objectives that include internal equity and customer satisfaction (Reed, 2002). After establishing the internal value as well as different factors importance, there can be a comparison of each factor with the relevant factor markets. If there are discrepancies between the factors that are of an individual, there might be reconciliation through the use of the internal ranking system. Due to the employee equity perceptions and customer satisfaction are impacted mostly through comparing of factors that are similar, the internal ranking offers the most appropriate guidance related to individual levels setting in terms of customer satisfactions and wages (Reed, 2002).

Rarely, as a result of the imbalance of short term demand and supply, there are particular jobs and customer satisfaction that might require high payment and treatment in order to attract as well as retain customers and employees who are competent and loyal. Such situations normally don’t emerge until the time the market supersedes the factors of the company. When such case happens, it is recommended for the company to include an exception of a policy for the group or customers affected. The imbalance however must be checked regularly as well as verified as, over time, and it might no longer need critical consideration (McDermott, 1999).

Companies that do operate in various geographic locations normally stage pay policies that is separate for every location in order to take strategic plan differences advantage in local retail markets (McDermott, 1999). Geographic differentials might, however, eliminate the perceptions of customer and employee internal equity. But due to customer and employee equity perceptions normally depend on similar factors as well as in the location that is similar and due to geographic differentials factors are usually less than 150/0, to geographic differentials might possibly have an effect that is minimally negative (McDermott, 1999). Consequently, the decision related to instituting a geographic policy must depend more on economic' and strategic considerations as compared to the considerations of internal equity (McDermott, 1999).

18. Conclusion

Amazon Company is considered not to depend much on the sales, but most of its items as well as content are from the sellers. Hence the Brand of Amazon strength is seen to be based on the content that is user-generated and thus it can be adapted quickly to the needs of the users. More Power to the consumer can be achieved from every business in relation to user-generated content. Amazon puts much focus on the optimization of content and this is normal to any other business online where the given listing is presented appropriately in search engine (SERPs). The Amazon search engine is seen to be refined where the desired content being looked for is brought up

Amazon company is seen to offer delivery services in several cities, 10 to be specific where ground delivery of at most two days is guaranteed in the entire USA. It is not expected that the consumers will expect the shipping speed that is comparable from all the given retailers. It is expected that the day delivery will be achieved soon in almost all the statistical areas associated with at least 75% of the entire population. Competition is seen to emerge from within or further away as the retailing is made more advanced globally by technology. This is considered to not to have ever existed, for instance, free shipment services provision globally at a fee that is too small