Amazon as a Key Player in Global E-Commerce Market

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Table of Contents

Introduction
Why Amazon is Going Global
How Amazon Has Gone Global
Amazon’s Self-representation versus TNC’s Critics
Conclusion
Bibliography

Introduction

Amazon is one of the most recognizable commercial clouding companies that currently exist. Few people know that the company was initially founded under the name “Cadabra.” Its founder, Jeff Bezos, was determined to create a huge online platform that would offer simplified access to book purchases. In 1995, the company was renamed “Amazon,” which had a connotation for the biggest world river.

Speaking about the company’s establishment, first and foremost it is essential to point out the character of the relevant time period. Hence, at that point, the Internet was not yet the second reality, but a new information source treated rather cautiously by older generations. Therefore, Bezos’ decision to make a shift for online commerce was then a risky and hazardous plan, the outcomes of which were problematic to calculate. In the meantime, the Internet was not only an unpredictable technique but also a highly convenient tool from the promotional perspective. Otherwise stated, it was due to the Internet’s abilities that the company was able to aim at a rapidly spreading growth.

Thus, the global market was the company’s target from the very beginning. It should be admitted that Amazon managed to reach the set goal within a relatively short period. Hence, at the current point, the company’s service is available in almost 200 countries worldwide and is carried out by 100 fulfillment centers. The company does its best to make the products most available – the customers are able to make purchases with one click and leave the delivery procedures to the professionals.

Customers are not the only stakeholders who receive benefits from Amazon. Sellers, likewise, are welcomed to experience the advantages of cooperation. The company’s inventions such as Fulfillment by Amazon (FBA) and multi-country inventory carry out all the critical procedures: exporting, importing, and storing. In addition, Amazon’s retailers are offered the use of the Amazon Currency Converter for Sellers (ACCS) that allows receiving all the payments in the national currency.

Hence, since the time of its creation in 1994, the company has turned into a world e-commerce giant within the two decades.

Why Amazon is Going Global

First and foremost, it is critical to analyze the factors that determine the company’s growth and allow it to strengthen its positions at the global level. From this perspective, it is considered important to examine both internal and external prerequisites that impact Amazon’s growth.

Increased Demand for Online Shopping

One of the key factors that determine the company’s rapid growth and extension is the increased demand for online purchases. Hence, modern consumers are particularly interested in quick and easy shopping procedures that save their time and energy. Statistics show that an average shopper believes that online commerce has more to offer than the traditional one; hence, he or she is more likely to find the targeted item on the Internet. The image below shows how rapidly the population of online shoppers is growing.

Online Shoppers. — *Image 2: “Online Shoppers”.*

As a result, experts make positive prognoses for the future of the e-commerce companies, putting a particular emphasis on their competitive advantages over the rivals that stick to the traditional forms of commerce. Therefore, it might be assumed that Amazon has promising prospects in terms of going global.

Simplified Entry to Any Market

Another factor that determines the company’s global future is more external than internal. Thus, it is the Internet structure that simplifies the company’s entry into any market. Experts point out that Internet companies have more opportunities in terms of product promotion than their traditional rivals because they are capable of selling services without being physically present in the targeted country.

In other words, in order to enter a new market, all that the company needs to do is to open access to its online platform for the residents. It is not even obligatory that the company has its stock in the country because the services sold might not require operations in this particular region (for example, ordering a gift for a foreign friend, etc.). From this standpoint, Amazon is going global very quickly.

Global Sales Infrastructure

The expert community agrees upon the point that the distance is no longer important in terms of sales infrastructure. Otherwise stated, it is currently more important to work out a developed and efficient supply chain that would ensure consistent performance of every retailer, whatever distant the location is. From this perspective, Amazon’s infrastructure is well-organized as it offers equal conditions to all the retailers. Its main goal resides in maintaining the high level of the service provided that is reached through establishing fulfillment and supportive centers worldwide. The global status of the company was, in fact, established from the very beginning due to the Internet-related structure. The formation of the relevant infrastructure was just another logical step to strengthen this status.

Legislative Basis

From a legislative standpoint, the company is not likely to experience any difficulties in entering the markets of the developed markets. The legislative basis is transparent and clear as long as the company pays the relevant tax from Internet sales.

In the meantime, its activity might be restricted due to the inner economic and political situation in a particular country. Hence, for instance, the company is still unable to establish an official website in such countries as Russia.

How Amazon Has Gone Global

The analysis represented above is mainly focused on those prerequisites that are supposed to enhance the global positions of Amazon. In the meantime, the company’s global status has already been established. Therefore, it is considered critical to examine the factors that have enabled the company to become a global market player.

Innovative Methods of Product Delivery

One of the company’s core strategic lines is innovation. This approach has helped Amazon design new methods of product delivery that meet the demands of the e-commerce market. It is now evident that an online shopper is mainly interested in quick and timely delivery that makes the core reason why he or she prefers the Internet to a traditional shop. As a result, the innovative methods of Amazon are primarily focused on simplifying and optimizing the delivery process.

Hence, the implementation of the so-called unmanned aircraft is expected to ensure fast and timely deliveries to the most distant locations. In addition, it is supposed to minimize the harmful effect that transportation vehicles commonly produce. The latter is particularly important because enhancing the green image is one of the core goals of any modern company that wants to strengthen its positions in the global market.

Moreover, the company makes a significant effort in order to make the delivery process more robotized. The implementation of new technologies and devices is likely to elucidate human errors and reduce the number of employees required to complete a particular delivery operation. Generally speaking, the shift to computerized operations is expected to make the delivery process more efficient.

Sales Supporting Infrastructure

Amazon has a standard cloud computing infrastructure that engages all the opportunities of the web resource. In the meantime, the sales supporting infrastructure is the key factor that ensures the company’s global status. Hence, the question comes up regarding the specificity of this infrastructure that has contributed so significantly to the company’s growth.

From the supply chain standpoint, Amazon has managed to create an efficient and well-developed infrastructure in a short time period. At the current point, the company’s infrastructure allows providing services for sellers worldwide.

Amazon’s sales supporting infrastructure is based on fulfillment centers and localized websites. The key goal of this system resides in providing a simple and efficient operation platform in every region to support sales. Recent research has discovered that it is the so-called “transactional factor” that makes shoppers purchase items online. In other words, what a modern customer wants is a one-click purchase that releases him or her from the necessity to travel to the bookstore. From this standpoint, Amazon has always been particularly attentive to ensuring an equal level of services worldwide. Its support centers assist the local distributors in carrying out timely deliveries and managing the supply chain in general.

Customer-Friendly Policy

Lastly, the factor that assisted Amazon considerably in becoming global is its customer-friendly policy. In other words, the company is highly concerned about its customer’s needs and demands and is always ready to provide them with special offers and options. As long as the company was initially targeted at acquiring the recognition on the global level, it had to work out such elements of the customer policy that would appear beneficial to all the consumers regardless of their national background.

As a result, these commonly appreciated elements have been found. The current customer-friendly policy bases on the two core components: discounts and free shipping. It is essential to note that Amazon is, probably, the only e-commerce company that readily offers both options to one customer. Meanwhile, such generosity has been properly appreciated. Today, the customer-friendly policy represents a substantial competitive advantage for the company over other players of the e-commerce market.

Amazon’s Self-representation versus TNC’s Critics

Amazon is highly concerned about its public image, trying to improve and refine it on the regular basis. In the meantime, as well as every global company, it has occasionally been criticized both rationally and subjectively. Some of the most controversial issues are elucidated below.

Anti-Union Policy

Unions play an important role in supporting the rights of employees. Hence, their main function is to ensure that every worker might account for the relevant support on the part of the union in case his or her rights are violated. Therefore, it is not surprising that Amazon has been widely criticized for its anti-union policy. It is essential to note that the company has been firm in its anti-union strategy from the very beginning, despite the negative evaluations that this decision would regularly receive.

The key rationale that the company provides in order to explain its refusal to accept the labor unions’ assistance resides in the fact that it is the free choice of its employees to manage all the work-related issues directly with Amazon rather than to turn for help to third-parties. It is essential to note that the anti-union policy might turn out to be the new trend that the e-commerce companies will gradually adapt. Due to the transnational character of the structure of such companies, it might turn out that the employees feel more independent, and their need for external support is less acute.

Nevertheless, at the current point, the company has had to implement some changes to its communication strategy and provide employees with the chance to organize unions in case they need some extra support.

Working Conditions

Working conditions are another aspect closely monitored by the relevant organizations and the world society, as soon as another company appears in the market. Current research has revealed that there are two key factors that determine the efficiency of workforce engagement for global companies: working conditions and wages. From this perspective, Amazon’s image is not very attractive. Hence, for instance, the company is commonly criticized for poor working conditions: excessively high temperatures, long working weeks, and poor security regulations.

The company’s response to the relevant critics is rather predictable. Thus, the founder of Amazon, Jeff Bezos, denies the fact that his company offers poor working conditions. The key rationale that he offers is that the employees would never agree to work for the company in case the offered conditions were as poor as the media tries to describe them. However, critics still have a negative impact on the company’s image.

Gender and Racial Misbalance

With the appearance of global companies, the world society has acquired hopes in establishing gender equality. Hence, numerous experts put a particular emphasis on the fact that a global company is obliged to ensure equal opportunities for genders.

There is even an opinion that the globalization process is likely to contribute to the formation of a new social movement theory within which women will receive new rights and prospects. Hence, it is not surprising that world society is particularly interested in monitoring gender equality insurance in different global companies. From this perspective, the question of gender balance has become another point for critics of Amazon.

Thus, a few years ago, the company was accused of concealing the data relevant to gender diversity. The authoritative business source, Wired, noted that the company refused to “reveal the racial or gender composition for its technical workers.” The claim was particularly harmful to the company’s image, taking into account the fact that all the other players in the e-commerce market were highly transparent in terms of the gender policy. As a result, the company was supposed to provide a prompt response in order to make up for the incident. It did not take Amazon long to respond; thus, the company promptly provided the relevant statistics on its official website. The gender composition of the company’s workforce is represented below.

Gender Composition. — *Figure 1: “Gender Composition”.*

Hence, it might be seen that gender balance is not maintained perfectly, particularly in the framework of the management field. In the meantime, the company assures the world society that it is making a significant effort in order to improve the situation and establish the relevant balance.

From the racial perspective, the situation is, likewise, not bright. Hence, despite the company’s claims about the diversity being one of the core components of the corporate vision, the major part of the workforce is still composed of white employees. The figure below represents the percentage composition of the Amazon workforce from a racial standpoint.

Racial Composition. — *Figure 2: “Racial Composition”.*

As a result, it might be assumed that both gender and racial misbalances are currently the most critical problems that can impede the company’s progress.

Conclusion

Basing on the analysis of Amazon, a series of relevant conclusions might be drawn. First and foremost, it should be noted that the company has managed to become one of the most powerful global e-commerce leaders in a relatively short time period. The key factors that have determined its rapid progress are the well-organized sales supporting infrastructure, the innovation-focused strategy, and customer-friendly policy. Secondly, the prognosis for the company’s further growth is rather positive due to the simplified entry to the global Internet markets, the innovative delivery methods, and the increasing social demand for online shopping.

In the meantime, there is a series of problems that might impede Amazon’s development. Hence, the company is most commonly criticized for poor working conditions and the lack of gender and racial equality in terms of workforce composition. As a result, it is assumed that Amazon will have to search for alternative solutions in order to eliminate these problems and maintain a positive public image.

Bibliography

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