How Amazon Business Survive and Grow
Ghulam Murtaza
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Table of Contents
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Introduction
The main aim of this assignment is to investigate how businesses survive and grow in the context of the Amazon case study. The company named Amazon, stands out as a leader and innovator in the ever-changing world of online retail. Amazon has become a byword for ease, dependability, and novelty in the eyes of consumers and businesses alike as a result of the company's worldwide dominance and revolutionary impact. The platform's success may be traced back to its one gateway, an all-encompassing interface that unifies all of our interactions with it. The streamlined purchase procedure is only one benefit of this unified approach, which also helps consumers feel at ease with the wide variety of goods and services on offer.
Amazon's dedication to uniform presentation guarantees that customers can always rely on the same high-quality and consistent information across all product listings. The modular content structure further improves accessibility by dividing material into manageable bits that users may quickly scan for relevant information. Amazon's clever customization is powered by nearly magical algorithms that can predict a customer's tastes and make suggestions accordingly, increasing efficiency and effectiveness. Analyses using methods like PESTLE and Porter's Five Forces help us untangle the complex web of variables that affect Amazon's business?(Amazon, 2023).
Understanding Amazon
Short History:
Launched in 1994 by Jeff Bezos, Amazon began as an online bookstore. Rapid expansion led it to diversify into various products and services, becoming the world's largest online retailer. Its innovations, like Prime and Kindle, revolutionized e-commerce. Today, Amazon dominates global retail, cloud computing, and streaming services.
One Portal, One Interface:
The Amazon site is where conduct all of our business, including shopping. Nothing matters, not even food, gadgets, literature, or clothes. Convenient, streamlined purchasing process. The site and its functionality remain unchanged. In doing so, visitors get a sense of trust and familiarity with the site, reducing anxiety when they discover new features. Envision a world where can't go shopping untiled figure out where to go.
Consistent Presentation:
Information about the product, such as features and customer ratings, is presented consistently throughout all listings. They consistently produce useful material for their consumers and provide it to them thanks to their excellent content management. There's also the additional bonus of being able to record and keep track of every single data "nugget." Employees shouldn't have to guess how to read or understand stuff just because it looks different on their screens?(Lumenlearning, 2017).
Modular Content:
Every page on Amazon is broken down into digestible chunks. There aren't any complicated PDF books to pore over. They may provide further information, but they usually do so as a choice rather than as a need before may go. Because of this, employees can rapidly get the information they need without having to sift through unnecessary details. Always remember that the goal should be discovery, not just a search. It's a good idea to do anything can to speed up the process of finding information.
Distributed Upstream Content Creation:
Although it may seem as if Amazon is in charge of everything, the material is produced by the goods firms, who have the necessary skills. The material is more credible since it follows Amazon's internal guidelines for graphic design, style of writing, and other areas of operation. Moving content creation closer to its original point of creation places the onus of ensuring its fullness, appropriateness, and correctness squarely on the shoulders of those who can best provide such data. It's great for helping small and medium-sized businesses?(Openstax, 2021).
Almost Magical Personalization:
Most Amazon shoppers are blown away by the site's personalized recommendations. When spend more time on the site, you learn more about us. After learning our preferences and habits, it may provide suggestions about what would enjoy and provide links to relevant resources. Since appreciate this convenience, sign up for an Amazon account on our own will. (Amazon.com is smart enough to accomplish this even if don't register, but registering adds a ton of customization.)
Crowdsourcing:
Amazon's user ratings, reviews (including most and least helpful), images, and purchase history analysis help shoppers learn more about products and their preferences. Amazon was the first in this industry, and many other online stores have since copied its social features. No need for organized groups to achieve a feeling of camaraderie?(MARC, 2023).
Applications of Different Analysis Tools for Amazon
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Amazon PESTLE Analysis
Political Factors:
A lack of stability in politics might affect Amazon's online sales. For instance, due to the more secure political climates of developed countries like Australia, Amazon.com was able to expand its business there. Even the most secure governments might pose risks to a business. The European Union is investigating into how Amazon.com utilizes data collected from retailers who belong to the Amazon Marketplace.
Economic Factors:
Amazon is a cutting-edge online retailer, but it has been criticized for eliminating jobs and favoring automation whenever it can.? Amazon has denied these claims, saying instead that it actively seeks out highly skilled UK citizens to hire. The business, however, introduced a program in May 2019 for personnel who chose to leave. Amazon will give you $10,000 plus three months' gross revenue to get begin if you are interested in leaving your job to start an independent package delivery service?(Pewresearch, 2020).
Social Factors:
Social elements, trends, and behaviors may have an impact on Amazon's prospects for achievement or failure. People are pleased to stay at home and have Amazon taking care of anything from movie viewing to their meal and shopping requirements using their efficient delivery service. People stayed indoors and ate junk food, which hurt the general population in the United States.
Technological Factors:
The technology at Amazon's core is state-of-the-art. Thanks to the development of new technologies, Amazon has become one of the most valuable companies in the world. Two areas where Amazon has invested in technology to make its customers happy are cloud computing (amazon web service) and its method of delivery. Amazon's goal is to integrate technology into its transport network as much as possible?(Kohan., 2020).
Environmental Factors:
Amazon.com Inc. has been pressured by shareholders and other interested parties to provide data on the firm's environmental impact, but the business has so far declined. Recently, Amazon.com promised that it would provide all such data before the conclusion of the year. Amazon also has a hard time reducing emissions across the board. It is notoriously hard to calculate accurate emission estimates for e-commerce sites.
Legal Factors:
The Amazon business must follow several laws and regulations. Several laws might affect Amazon, such as competition, prejudice, confidentiality of information, and protection of customers regulations for e-commerce sites. The public has spoken, and they demand and require protections against the selling of fake products. Amazon has implemented a policy to prevent the selling of fake products?(Amazon, 2019).
Porters Five Forces Analysis of Amazon
Threat of New Entrants: nbsp;
Amazon is up against a wide range of other businesses. The major businesses, such as those providing video streaming services, online marketplaces, and cloud storage services, will be the focus of this study. Due to low production quantities, none of these firms can take advantage of economies of scale that would considerably cut the cost of production?(Ecommercedb, 2018).
Threats of Substitutes:
E-commerce faces a moderate to serious threat from the availability of alternatives. Brick-and-mortar stores often appeal to customers because they provide the ability to try before they buy. It's also feasible that consumers would rather put their money into the brand's official website than one run by an outside party. Due to the availability of viable alternatives, such as going to the movies or other types of entertainment, the streaming sector confronts a high degree of competitive threat.
Bargaining Power of Customers:
A company's bargaining position is influenced by several factors. These include the concentration and size of its purchasing base, differentiation of products, switching costs, and so on. There might be a wide variety of people shopping online. Due to the site's extensive product catalog, shoppers are free to make orders of any size?(CFI, 2023).
Bargaining power of Suppliers:
Both of the stream service's primary suppliers employ Amazon's services for infrastructure, which include Amazon Web Services (AWS). Amazon might be competing with other streaming platforms for the rights to display the series, however, because the content originates from a wide variety of companies. Amazon has some if limited, negotiation power in this area since the vast majority of the content is Amazon original.
Competitive Rivalry:
Amazon's online shopping share of the market is challenged by huge companies like Walmart, Alibaba, and others. Retailers like Walmart are combining in-store and online options to better serve their customers. As an added difficulty, there is intense rivalry from within and beyond. Competitors may come from anywhere, including big internet stores, small local businesses, as well as machines for vending?(DANIEL, 2023).
Amazon’s SWOT Analysis
Strength:
The Amazon name is well-respected. Amazon's long history as an industry leader has allowed it to build a reputable name for itself. Large selection, helpful customer service, speedy shipping, and affordable prices are just a few of the reasons why people choose this particular brand. According to emarketer.com, Amazon will account for 47% of all e-commerce sales in the United States in 2019. The online marketplace is predicted to increase its income by 20%, reaching $282.52 billion. With over 600,000 workers and $232.887 billion in sales in 2018, Amazon earned $10.073 billion in net profits.
Weaknesses:
The Amazon name is well-respected. Amazon's long history as an industry leader has allowed it to build a reputable name for itself. Large selection, helpful customer service, speedy shipping, and affordable prices are just a few of the reasons why people choose this particular brand. According to emarketer.com, Amazon will account for 47% of all e-commerce sales in the United States in 2019. The online marketplace is predicted to increase its income by 20%, reaching $282.52 billion. With over 600,000 workers and $232.887 billion in sales in 2018, Amazon earned $10.073 billion in net profits?(Felix, 2019).
Opportunities:
Shoppers are more inclined to make purchases from large, well-known outlets like Walmart and eBay due to these stores' well-known names and general appeal. The same applies to Amazon. Amazon may use this to its advantage by expanding its online business model into developing countries, especially those with low levels of competition.
Threats:
Any competent hacker would be interested in gaining access to the company's customer database. Credit card details and transaction history are among the private information kept there. When it comes to data security, Amazon is particularly weak. The stock cost, image, and bottom line of Amazon are all susceptible to random catastrophes?(Erica, 2019).
Findings Analysis
An in-depth look at Amazon uncovers a complex company that has maneuvered to become a market powerhouse. Several major conclusions arise via the use of numerous analytical methods, revealing the complex dynamics at play inside the organization. To begin, what sets Amazon apart from the competition is its one-stop-shop mentality, which is reflected in a single user interface. This not only facilitates a smoother buying experience but also creates a feeling of comfort and familiarity for the buyer. By maintaining a uniform structure for all listings, accuracy is guaranteed, and usability is enhanced. The modular content structure is also crucial in improving accessibility since it facilitates quick and easy exploration of various topics?(Fader & Toms, 2018). Amazon's use of customization is cutting-edge since it's powered by complex algorithms, making each customer's experience unique. Amazon's ability to deal with political, economic, social, technical, environmental, and legal difficulties is highlighted by an examination of these variables using frameworks like PESTLE and Porter's Five Forces. Despite these external constraints, Amazon's assets, including a respected brand, enormous range, and remarkable financial success, shine through. The report also highlights certain weaknesses, such as the sensitivity to data breaches, which reflects the need for constant monitoring in an age of constantly developing cyber threats?(Aldawood & Skinner, 2019).
Conclusion
In conclusion, Amazon has maintained its dominant position in the international e-commerce market by its dedication to a customer-first approach and its adoption of cutting-edge business techniques. Consumers' lives have been made easier because of the portal's ability to house a wide variety of services in one place, and the portal's ability to inspire confidence and trust in its customers has increased sales. Amazon's commitment to maximizing customer happiness and productivity is on full display in the site's uniform design, modular content structure, and customized suggestions. Analyzing the external variables influencing Amazon's operations using frameworks like PESTLE and Porter's Five Forces reveals that the corporation deftly handles everything from political and economic issues to technical developments and environmental effects. Amazon's proactive stance on legal compliance is more evidence of the importance the company places on running an ethical and responsible corporation. Amazon's SWOT analysis highlights the company's many advantages, such as its well-known brand, extensive product range, and successful business model. However, it also draws attention to possible weak points, such as the possibility of data breaches and the ongoing danger of cyberattacks.
References
Aldawood, H. & Skinner, G., 2019. Reviewing cyber security social engineering training and awareness programs—Pitfalls and ongoing issues. Future Internet, 11(3), p. 73.
Amazon, 2019. How to sell on Amazon: a guide for beginners. [Online] Available at: https://sell.amazon.com/sell
Amazon, 2023. What is e-commerce? Launch and grow an online sales channel. [Online] Available at: https://sell.amazon.com/learn/what-is-ecommerce
CFI, 2023. Bargaining Power of Buyers. [Online] Available at: https://corporatefinanceinstitute.com/resources/management/bargaining-power-of-buyers/
DANIEL, P., 2023. Amazon SWOT Analysis. [Online] Available at: https://businessmodelanalyst.com/amazon-swot-analysis/
E-commerce, 2018. Top Amazon Competitors: eCommerce Marketplaces Are Growing. [Online] Available at: https://ecommercedb.com/insights/top-amazon-competitors-thriving-ecommerce-marketplaces/4596
Erica, E., 2019. Here’s what need to know about recent Amazon Ring hacking cases. [Online] Available at: https://www.deseret.com/indepth/2020/1/3/21043653/amazon-ring-hacking-cases-doorbell-santa-claus-kids-bedroom-safe-lawsuit-security-camera-home-hacker
Fader, P. & Toms, S., 2018. The customer-centricity playbook: Implement a winning strategy driven by customer lifetime value. University of Pennsylvania Press.
Felix, R., 2019. Amazon's Incredible Long-Term Growth. [Online] Available at: https://www.statista.com/chart/4298/amazons-long-term-growth/
Kohan., S. E., 2020. Amazon’s Sharing Of Cutting-Edge Technology May Change The Way You Shop For Groceries. [Online] Available at: https://www.forbes.com/sites/shelleykohan/2020/03/15/amazons-sharing-of-cutting-edge-technology-may-change-the-way-you-shop-for-groceries/?sh=6a859c5c3e31
Lumenlearning, 2017. Advertising. [Online] Available at: https://courses.lumenlearning.com/suny-marketing-spring2017/chapter/reading-advertising/
MARC, R., 2023. The Knowledge Management Genius of Amazon.com. [Online] Available at: https://www.learningguild.com/articles/1480/the-knowledge-management-genius-of-amazoncom/
Openstax, 2021. Distinguish between Merchandising, Manufacturing, and Service Organizations. [Online] Available at: https://openstax.org/books/principles-managerial-accounting/pages/2-1-distinguish-between-merchandising-manufacturing-and-service-organizations
Pew Research, 2020. The positives of digital life. [Online] Available at: https://www.pewresearch.org/internet/2018/07/03/the-positives-of-digital-life/
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