Category: Amazon

Amazon UK and Islamic Relief UK: Comparative Analysis

Ownership of Amazon

Amazon is owned by Jeff Bezos (the worlds richest man). Jeff Bazos founded Amazon back in 1944 out of his garage in Seattle, he runs Amazon as CEO and owns 11.1% stake. The companies’ intense revenue growth has given its founder Jeff Bazos a phenomenal $93 Billion to his wealth since mid-March, according to analysis from the institute for policy studies and Americans for tax fairness. Back in 2019 Amazon-owned 7 massive international companies such as Audible, Create Space, Good Reads, IMDb, Wholefoods, Woot and Lappos.

Audible

As the largest producer and retailer of audiobooks in the United States, Audible Inc. is one of Amazon’s most well-known businesses. Following a $300 million acquisition in 2008, the company became a subsidiary of Amazon. In addition to selling audiobooks, Audible provides its customers with downloadable audio versions of newspapers, magazines, and radio programs.

CreateSpace

CreateSpace is an Amazon subsidiary that operates in the content publishing and distribution industry. The company offers a self-publishing platform that allows independent filmmakers, musicians, and authors to publish and distribute their work. That makes it much easier for creative professionals to bring their work to market without spending large sums of money. The CreateSpace website also provides a library of free articles on many publishing-related topics.

Good reads

With more than 90 million registered users, Goodreads is a thriving online community of book readers from around the world. The website allows users to discover new titles based on what they have read in the past. It also allows its members to give reviews on books and share their reading lists with others. Many self-published authors use Goodreads as a medium to promote their work and engage with their readers. Goodreads began in 2007, and Amazon purchased the website in 2013.

IMDb

The Internet Movie Database, better known as IMDb, is an online database that provides information on television shows, movies, actors, and producers. Amazon bought the company in 1998 from the founder, Col Needham, who has continued to serve as IMDb’s CEO.

After the acquisition, Amazon used IMDb as a medium to promote some of its movie-related products, including DVDs and videotapes. Ad revenue and strategic licencing deals are both significant contributors to IMDb’s overall income. The company also makes money with its subscription service IMDb Pro, which allows subscribers to network with entertainment professionals. In 2019, IMDb started a free ad-supported streaming video service called Freedive, which has since rebranded to IMDb TV.

Whole foods

Whole Foods was Amazon’s largest buy ever at the time the acquisition took place in 2017. Amazon paid around 13.1billion for the organic food retailer and gained access to its brick and mortar presence. While Whole Foods continues to emphasize the healthy fare that made it successful, Amazon’s acquisition brought some changes. Amazon Lockers began to show up in Whole Foods stores. While the lockers offered Amazon customers a secure place for deliveries, they also got more customers into the stores. More importantly, Whole Foods gives Amazon a way to deliver fresh food, which is an area where Amazon has struggled in the past.

Woot

Amazon acquired the popular online discount retailer Woot in 2010. As its ‘One-Day, One Deal’ slogan suggests, Woot provides its customers with discounted prices on a particular product each day. These products come from a wide range of categories, including consumer electronics, clothing, and even wine.

Zappos

Nick Swinmurn the company owner created Zappos in 1999, he decided to start an online shoe store on his own without spending much money on advertisements, Swinmurn grew his customer base through word-of-mouth. Zappos eventually became one of the world’s largest online shoe retailers. Zappos was purchased by Amazon back in 2009 after the company reached 1 billion in revenues. Since then, both companies have continued to operate as separate entities.

Liability of Amazon UK

The key to Amazon’s strategy to avoid liability is that Amazon does not say that it owns the products manufactured by sellers. Yes, the products are sold via Amazon website, yes, they’re stored in Amazon warehouses and they are packaged in Amazon packaging. And yes, Amazon processes customer’s payments. But for the most part, courts have found Amazon did not own the name of the products that turned out to be defective, meaning Amazon cannot be liable as a seller of those products. Therefore Amazon doesn’t get charged for the defect or gets taken to court because Amazon refuses to pay for that defect.

Judge Diana Motsz from the 6th Circuit mused that the long-standing product liability law does not account for newly ubiquitous Internet retailers like Amazon. ‘It is surely no incident’, Judge Motsz said that Amazon has designed its relationships with third-party sellers to avoid taking title to their products and assuming product liability risk. But she warned the court that ‘considerations of public policy may justify a change in common law’ when old laws seem to appear out-dated.

When you buy a product on Amazon, there’s little guarantee that what you’re getting has been expertly vetted for safety. The Wall Street Journal reported this year that more than 4,000 banned, unsafe, and mislabelled products were on the company’s platform, ranging from faulty motorcycle helmets to magnetic toys labelled as choking hazards.

Those faulty products have resulted in serious, sometimes fatal, injuries, setting loose a tidal wave of liability claims. According to court records viewed by The Verge, Amazon has faced more than 60 federal lawsuits over product liability in the past decade. The suits are a grim catalogue of disaster: some allege that hoverboards purchased through the company burned down properties. A vape pen purchased through the company exploded in a pocket, according to another suit, leaving a 17-year-old with severe burns.

The list goes on: an allegedly faulty ladder bought on Amazon is blamed for a death. Two days after Christmas in 2014, a fire started at a Wyoming home in America, blamed on holiday lights purchased through the company. Firefighters found a man inside, facedown and unconscious, according to court filings. He died that night. The results of the suits have been mixed: Amazon has settled some cases, and successfully defended itself in others, depending on the circumstances. (The company declined to comment for this article.)

Throughout the cases, Amazon has taken advantage of its unusual legal status as half-platform, half-store. If Home Depot sells a defective band saw, the store can be sued alongside the company that made the product in comparison to Amazon who won’t. That liability means conventional retailers have to be careful about the products they stock, making sure every item on store shelves has passed at least the most basic product safety requirements. In America, states have passed different versions of product liability laws, but they all put the burden of fault on more than just the original manufacturer.

But Amazon is more complex as it acts as a direct seller of products, while also providing a platform, called Marketplace, for third parties to sell their products on the online world. Tightly integrated into Amazon’s sales, Marketplace products are often cheaper for consumers, less controlled, and sometimes less reliable than other products and because Amazon is usually seen as a platform for those sales rather than a seller, the company has far less liability for anything that goes wrong. But because the Marketplace is so intertwined with Amazon’s main ‘retail’ store, it’s easy for customers to miss the difference and then when they get a faulty product and try to sue amazon they find themselves in a mess as Amazon won’t be the creator of the products, which is quite unfortunate in my opinion because most consumers are going to see that Amazon is a well known and trusted market place and wouldn’t look twice.

Amazon’s total liabilities from 2006 to 2020. Total liabilities can be defined as the total value of all possible claims against the corporation.

Amazon total liabilities for the quarter ending June 30, 2020, were $184.586B, a 33.48% increase year-over-year.

Amazon total liabilities for 2019 were $163.188B, a 37.02% increase from 2018.

Amazon total liabilities for 2018 were $119.099B, a 14.96% increase from 2017.

Amazon total liabilities for 2017 were $103.601B, a 61.58% increase from 2016.

Purpose of Amazon UK

Amazon UK aims to be Earth’s most customer-centric company. They believe their purpose is to continually raise the bar of the customer experience by using the Internet and technology to help consumers find, discover and buy anything, and empower businesses and content creators to maximise their success.

Amazon UK believes their mission is important for the UK because digital empowerment for customers and businesses improves living standards for people up and down the country and drives Amazon’s economic competitiveness and productivity in a global economy.

Amazon UK wishes to continue to push at the boundaries of how technology – digital infrastructure and services – can improve the customer experience and help make the economies of the countries where Amazon operate more competitive on the global stage.

Scope of Amazon UK

Scope of the business and current products of services provided Amazon has an extremely vast scope of business because it began as an online bookstore, became an online marketplace, and then began creating its technology such as AWS and the Kindle. Another service Amazon provides is a subscription service Amazon Prime. By purchasing a subscription to Amazon Prime, customers can purchase almost anything from Amazon and receive free two-day shipping. Included in the subscription is the popular Amazon Video, which began as a way for customers to stream videos online instead of purchasing them, and has evolved into Amazon creating their content through Amazon Studios. Another revolutionary service offered by Amazon is Prime Now, which allows goods to be purchased and delivered within one hour for $7.99. (Peterson 2015) Customers can also choose to have it delivered within two hours free of charge. Prime Now is currently available for Prime members as long as you live in one of the cities that offer the service. The service began in New York but is constantly expanding to bigger cities. Prime Now is another example of how Amazons trying to take advantage of the burgeoning on-demand market.

Description of the scope of market distribution (are they local, regional, global, etc?)From its inception as an online bookstore, Amazon was able to expand into international markets fairly quickly by acquiring other online bookstores in the United Kingdom and Germany. As Amazon services expanded so have the types of customers desiring to use those services. Amazon is now a global company that has retail websites in the United State, United Kingdom, Canada, Mexico, France, Spain, Italy, Germany, India, China, and Japan. (Amazon.com) While these are the only countries that have Amazon retail websites, many other services are offered throughout the world. For example, Amazon Video is available in over 200 countries and Amazon Kindle is available in over 170 countries. Not only does Amazon operate globally, but it also allows its user to expand their business across the world. Overview of the leadership and management structure and individuals Jeff Bezos is the founder and has been CEO of Amazon since it was created in 1994. He is also listed as the President and Chairman of the board. As the CEO is responsible for choosing the right markets for the company and ensuring the companies resources are being used effectively. As the CEO Bezos is at the top of the management structure for Amazon but he is not the lone decision-maker. Senior Vice President and CFO Brian Olsavsky, Senior Vice President of Business Development Jeffrey Blackburn, CEO Amazon Web Services Andrew Jassey, Worldwide Controller and Principal Accounting Officer Shelley Reynolds, General Counsel and Secretary David Zapolsky, and CEO Worldwide Consumer Jeffrey Wilke follow him.

Research Report on Quantitative Analysis of Amazon

Amazon is a company who focuses on e-commerce and has locations all over the United States and world for that matter and is based out of Seattle. This company was founded in 1994 and has had the same CEO since 1996, Jeff Bezos. Amazon is most famous for their idea of Amazon Prime. This is typically a yearly subscription that qualifies members for free two-day shipping on thousands of their items. This membership also includes free movies and tv series that are available all the time along with music options. This membership is only $99 a year for alll subscribers. Amazon currently employs 750,000 people and is the second largest employer in the United States. It also has a net worth of $918 billion and is a leader in the industry.

I chose Amazon because I find it to be a very interesting company and are a leader in the market. Everyone knows who and what Amazon is and this seemed to be an overnight sensation. They have made so much progress within the twenty years that it has been around, and they have become one of a kind in their industry. They are constantly exploring new options for ways to better themselves. Bezos says it best when he states that “Our customers are loyal to us right up until someone offers them a better service” (Robischon, 2017). Amazon has set a new shipping expectation for their customers that has bled over to other companies. From personal experience, I have chosen Amazon over other companies because I will get the merchandise quickly and there will be “no” shipping charges, if you will. Amazon has also expanded into other unfamiliar areas for themselves, such as acquiring Whole Foods or expanding into the film industry when they produce Amazon originals that are introduced to Prime for new screenwriters. I feel that a quantitative analysis on Amazon will be interesting to assess where they are successful and areas that can be improved on. There are many different areas that Amazon can better themselves in to continue to be a leader in the industry, but they are also performing well in other areas. Some of the areas that I will discuss are decision analysis, forecasting, inventory control, transportation, and project management. Each of these helps to look at a different aspect of Amazon and I will add my personal thoughts.

Decision Analysis

Our textbook offers six different steps in decision making that would help to make an important business decision. The steps are as followed “clearly define the problem at hand, list the possible alternatives, identify the possible outcomes or states of nature, list the payoff of each combination of alternatives and outcomes, select one of the mathematical decision theory models, and apply the model and make your decision” (Render, Stair, & Hanna, 2012). Amazon launched the Kindle in 2007 and had a decision-making process to go through prior to this launch. Amazon saw that there was a demand for e-reading and saw that the supply needed to be created. Some of the alternatives that could have been discussed was a desktop format to use on a PC or personal computer or the handheld option that Amazon did go with that is easy to transport and can be used virtually anywhere. The possible outcomes would be that the idea would be a bust and there would be no interest, there would be some interest, but not enough to justify manufacturing, or there would be mass amounts of interest and the company would see a profit. If there were little or no interest, the company would suffer a loss, but if there were high amounts of demand, then the company would see a profit. For this example, I would use the decision-making process under uncertainty by solving the criterion of realism (Render, Stair, & Hanna, 2012).

Forecasting

Forecasting is a mathematical process that managers use to help predict the future in some manner. This could be a restaurant forecasting how much food they will sell during a specific time frame or a company forecasting what their sales will be for a particular item for a period of time. The goal of forecasting is to have enough on-hand inventory to meet their potential demand from customers. This has been something that Amazon recently had to overcome because they purchased Whole Foods. This is a market that Amazon is not familiar with because it deals with perishable foods. To maximize profitability, Amazon has to be able to purchase the right amount of food to keep stocked at the Whole Foods stores in order to meet customer demands. If there is too much food at the end of the day, then Amazon has to find a way to dispose of the food and suffer a loss. If there is too little, then Amazon suffers the loss of potential sales and has dissatisfied customers. Forecasting is key to keeping the business profitable and customers happy. An example that Amazon may want to consider would be measuring forecasting accuracy through forecast error. Amazon may forecast that they will sell 100 pounds of grapes in a week for a particular area, so the manager orders 100 pounds of grapes. That week they only sell 75 pounds of grapes. We would see that we had a forecast error of -25 because Amazon over ordered and had product left over that will expire. Perishable foods through online ordering is something to be very cautious of to ensure that there are minimal amounts of waste daily.

Inventory Control

Inventory is one of the most expensive assets to a company because it is necessary to meet customer demands, but also to be kept to a minimum to keep those costs low (Render, Stair, & Hanna, 2012). There are a few different areas that are directly impacted by inventory, such as the decoupling function, storing resources, irregular supply and demand, quantity discounts, and avoiding stockouts and shortages (Render, Stair, & Hanna, 2012). The accuracy of inventory is just as important because it helps to keep these costs to a minimum as it cuts back on overordering items. This is very important for a company like Amazon because they carry so many different items, some of which are very expensive to purchase. This is why Amazon implemented Inventory Control Specialists to help cut back on having too much on-hand inventory. This also helps to ensure that the inventory that is in stock is correct and up to par with their quality standards. Inventory control specialists can also help with the ordering process by assessing past sales and comparing those to help forecast future sales. This helps to stock the correct amount of inventory for that particular item. For this, we could use the formula Average inventory level = Q / 2. Q is the order quantity, so for Amazon they may want to order 1,000 firesticks from the manufacturer in a week. If we divide 1,000 by 2, then the average inventory level would be 500.

Transportation

Transportation is an issue that Amazon largely has to deal with because they ship all over the world. The transportation problem shows us that there is a set amount of supply at certain sources and there is a set amount of demand that needs to be met. Amazon must work to meet the demand that their customers have all over the world for particular products. While Amazon wants to meet the demands of their customers, they also need to keep shipping costs down for themselves to maximize their profitability. This is where many different warehouses come into play to help meet the demand and shipping issues. There are warehouses all over the United States and world to ship product from to help decrease these shipping costs. The next issue that Amazon has to address is their free two-day shipping with having a Prime account. This is necessary to meet consistently so customers continue to come back, so Amazon has to figure out where the order must ship from in order to get it to the customer in that timeframe. This could mean shipping the product via air to a warehouse closer to the customer. The goal, however, is to ship the product from the closest warehouse to minimize costs on shipping. For example, say we want to ship some product from Seattle to Chicago. The per unit cost to ship the product is $5 and we are shipping 10 of those, so the total cost to ship would be $50. This is what Amazon should work to minimize to keep shipping costs at a minimum.

Project Management

Project management helps us to understand all of the working parts of one particular project and how they work to influence and determine the critical path. Since Amazon does not manufacture anything, we will use the task of shipping an order to a customer. It first starts with getting the order and that is submitted right away to Amazon, then it is given to the correct warehouse for shipping, then the employee in the warehouse gets the order and pulls it, next someone puts it in a box and stages it for shipping, lastly it is shipped out to the customer. Each of these parts are incredibly important because they all determine if the order will be delivered to the customer in the guaranteed time given. Out of these, I would say that pulling the order is the most important step because this determines if Amazon has the product at that warehouse or not. If they do not, then they may decide to ship from another warehouse close by. Amazon has proven incredibly competent of being able to distribute the orders to the corresponding warehouses and getting the orders shipped to their customers in the guaranteed time given to the customer when ordering. There really is not a lot of room for improvement on Amazon’s end because they are performing well and consistently.

Conclusion

Amazon has proven that they are a leader in the e-commerce business because of how diverse they are with their products and how willing they are to try a new product or service. Amazon is well aware of the risk that comes with introducing a new product or service, yet they try anyways. This has helped them to get to where they are today as one of the largest companies in the United States. Amazon is using various types of quantitative analysis each day to properly and efficiently function. They have used decision analysis to determine if they want to launch a new product. They go through the six steps to make an educated decision on whether or not launching a new product will be worthwhile. Forecasting helps them to know what they need to stock of their products and where they are over or under stocking creating a surplus or shortage for their customers. Inventory control helps to assess the new products coming into the warehouse to meet the quality control processes. Inventory control also helps to make the decision of when to order more product so there is not too much on hand. Too much inventory on hand is incredibly expensive, but it is an asset to the company. Transportation is key to the profitability of a company because the goal is to minimize all costs with transportation. Amazon should work to ship from the closest warehouse to the customer and maximize their use of space when shipping from warehouse to warehouse. Project management shows us that there are many different parts that fit together to make one job. Shipping a package is not quite as simple as it sounds because there are many different sub-jobs that go into shipping that package. These sub-jobs help us to determine the critical path of the project and where we do not have time to slack on. Amazon has proven time and time again that they are willing to do whatever it takes to start and keep loyal customers. They are constantly working towards bettering themselves in all aspects. After reviewing them through this quantitative analysis, I would agree that Amazon is performing well and will continue to do so.

Research Report on Amazon Financial Analysis

The company I have decided to research and complete my financial analysis on is Amazon. Amazon is the world’s largest online retailer with over 750,000 employees. Their company’s main focus is e-commerce, digital streaming, cloud computing, and artificial intelligence. Along with Google, Microsoft, and Apple, Amazon is considered one of the “Big Four” tech companies. They were originally a book seller but have vastly expanded into a highly respected online retailer. Jeff Bezos is the founder and current CEO and first launched the website in 1995. Amazon had a net revenue of $280.522 billion in the year 2019. There are 3 financial corporate statements that are key to an organization’s financial structure. They are a balance sheet, income statement, and a cash flow statement. Each financial statement plays a specific and important role within an organization or corporation.

A balance sheet is one of the most popular and well known financial statements in all of accounting. A balance sheet is designed to show exactly what a company owns, what it owes, and how much money has been invested into the company by owners and investors. (Fool.com) By definition a balance sheet is a statement of the assets, liabilities, and owners equity. Assets are things that are owned and have value to a specific person or company. Examples of assets include cash accounts, cash equivalents, accounts receivable, inventory, furniture, and stock. (Fool.com) Assets are usually divided into two categories on your balance sheet, current assets and long-term assets. Current assets are considered anything that can be converted into cash quickly.(Fool.com) Liabilities are considered debts or things that you owe to an organization or specific person. For example, liabilities include accounts payable, interest payable, wages and salary payable, and customer deposits. (Fool.com) Similar to assets, liabilities are broken down into two categories: current and long term liabilities. Equity represents the amount of money that you or your investors have invested in the business. Also called capital, the equity account represents a company’s net worth. Added together with the liability total, it should match or balance with your total assets. (Fool.com) The formula for a balance sheet is: assets = liabilities + equity. In 2019 Amazon reported total assets of 225,248,000. They reported total liabilities of 163,188,000. The total equity reported on the balance sheet was 62,060,000. ( For Amazon: Assets (225,248,000) = liabilities ( 163,188,00) + equity (62,060,000) ) As it should be, Amazon does have a balanced balance sheet.

An income statement (also known as a profits and losses statement) is a summary of a company’s profit or loss during any one given period of time, such as a month, three months, or one year. An income statement consists of revenue, expenses, and net income. The numbers used to calculate that bottom-line figure are cumulative, meaning that they are a total of all activities from the beginning of the chosen time period until the end of the chosen time period. (Study.com) The formulas used in an income statement is revenue – expenses = net income (Study.com) Revenue is the amount of money that a company brings in. Revenue is the income generated from normal business operations and includes discounts and deductions for returned merchandise. It is the top line or gross income figure from which costs are subtracted to determine net income. Expenses are the amount of money that a company pays out. They are specific expenses that are incurred in order to earn normal operating revenues. Net income occurs if the amount of revenue that came in was more than the amount of expenses that went out. Net loss occurs if the amount of expenses that were paid were more than the amount of revenue that came in. (Study.com) When analyzing Amazon, they reported a total revenue of $280,522,000. Their total operating expenses totalled to $268,934,000 The net income reported on their balance sheet was $11,588,000 (Revenue $280,522,000 – Expenses $268,934,000 = Net Income $11,588,000)

Cash flow statements are one of the most important financial pieces for a business. These statements show how money moves through your organization during a given period of time. It ends up being a very easy way to keep track of where your money is coming from and where your money is going. When preparing cash flow statements there are two different methods that can be used: indirect method and direct method. The indirect method uses net income as the base and does the adjustments needed, i.e adding and subtracting the variables to convert the total net income to cash amount from operations. The direct method of cash flow in operating activities includes the cash being received from the customers and the cash paid to the suppliers, employees, and others. The cash can also be paid for income tax, interest, and other variables. The direct method of cash flow starts with cash transactions such as cash received and cash paid while ignoring the non-cash transactions.Indirect cash flow method, on the other hand, the calculation starts from the net income and then we go along adjusting the rest. Amazon uses an indirect method to prepare their cash flow statement. We know this because the company starts the section with net income, and reconciles net income to net cash through the increase or decrease of non cash items.

There are 3 financial corporate statements that are key to an organization’s financial structure. They are a balance sheet, income statement, and a cash flow statement. Each financial statement plays a specific and important role within an organization or corporation. There is a vast amount of information that breaks down each financial statement. Looking at Amazon’s financial statements, they continue to grow and expand each year. Their revenue and profits continue to climb, but their expenses do as well. The year 2019 has been the best year financially for the company and they are nicknamed the “king of revenue” given their unbelievable revenues from year to year. They are projected to jump up double their current revenue in the next 3 years.

Amazon Job Stress: Overview of Job Demands-Resources Model

1. Introduction

1.1. Company Overview

This report has been prepared for the CEO of Amazon Australia. Amazon was originally established in the United States in 1994 as an online bookstore (Amazon 2019a). Today, it is a leader in the e-commerce industry and launched its online retail service in Australia in 2017(Amazon 2019a). Amazon’s top priority is continually elevating the customer. Every operational process is created with the end customer in mind (Amazon 2019b). The company aims to support small businesses grow and is guided by passion for invention and innovation (Amazon 2019)b.

1.2. Business Problems

According to a recent ABC article (ABC 2019), Amazon employees are experiencing long shifts involving repetitive tasks and hard physical labour, high workloads with excessive performance monitoring and unrealistic KPIs, technology issues and uncertainty regarding ongoing employment. The impact on employees, include physical and mental exhaustion, not enough time to take breaks during shifts and cutting corners on safety protocols. This is having negative consequences on job stress, satisfaction, security and performance levels.

Firms Situation Symptoms Likely problem(s) Decision Statement

CEO of Amazon Australia is concerned with recent media reports on working conditions in fulfilment centres and want to understand if reports are true. – Employees don’t have time for break (eat, drink, bathroom) during shift.

• Cutting corners on safety protocols.
• Employees feel physically and mentally exhausted at the end of each shift. – Employees have a high workload, long shifts and unrealistic KPI’s involving repetitive tasks and hard physical labour.
• Organisation/ Leadership principles are inconsistent with worker wellbeing
• Technology issues with scanning equipment sending employees to wrong location. How can Amazon decrease job stress and improve the wellbeing for warehouse employees?

Decision Statement Research Objectives Research Question(s)

How can Amazon decrease job stress and improve the wellbeing for warehouse employees? Identify what job demands are influencing job stress in the warehouse.

Identify job resources that will improve job satisfaction for fulfilment centre employees at Amazon. Are the physical requirements too demanding of the employees?

Are employees aware of Amazon’s leadership principles, do they agree with them and are the Amazon principles adhered to by the supervisors?

2.0 Overview of Job Demands-Resources Model

This review will look at applying the Job Demands Resources (JD-R) model to warehouse workers and exploring how and when job stress impacts job satisfaction, security and performance. The JD-R model suggests that specific risk factors associated with job stress can be distinguished into two categories being, job demands and job resources which focuses on both negative and positive indicators of employee wellbeing (Bakker, 2013). Bakker (2013) argues the JD-R model can be applied to many occupations, regardless of the demands or resources involved, to improve employee happiness and performance.

Job demands are the physical, psychological, social, or organisational aspects of a job that require sustained effort or skills and are consequently linked with specific physiological and emotional costs (Bakker & Demerouti, 2007). While job demands are not necessarily negative (Meijman & Mulder, 1998), research indicates that certain demands cause work overload, lack of control, role ambiguity and role conflict, all of which leads to job stress (Fairbrother & Warn 2003). Without adequate recovery, this can exhaust an employee’s mental and physical resources (Meijman & Mulder, 1998).

Job resources are the physical, psychological, social, and organisational elements of a job that provide employees with support, feedback, and enable autonomy (Bakker & Demerouti, 2007). They are resources that assist employees in coping with job demands. However, job resources also have use beyond fulfilling job demands Bakker (2013). Job resources can be found at various levels of a business. Career opportunities, job security, supervisor support, team culture, task skill variety and autonomy are several job resources that can assist with performance and job demands.

A vital premise in the JD-R model is that two different underlying psychological processes play a role in the development of job strain and motivation from working characteristics Bakker (2013). The first process suggests that the mental, emotional and physical demands of a role can lead to exhaustion resulting in poor worker health (Bakker & Demerouti, 2007). Sickness may lead to a rise in employee absence from work and have a negative import for the organisation (Bakker, Demerouti, De Boer, & Schaufeli, 2003). In the second process proposed by the JD-R model, an organisation with well-thought-out job resources can generate employee motivation leading to high work engagement, low scepticism, and excellent performance (Bakker & Demerouti, 2007).

Having adequate job resources that boost work engagement, even when job demands are high, may alleviate job stress. Leader support in the way of feedback fosters learning and increases the likelihood of an employee being successful and achieving work goals (Bakker & Demerouti, 2007). JD-R theory suggests that whether it be through the satisfaction of an employee’s basic needs or the employee achieving work goals, the presence of job resources leads to engagement. A study among educational staff suggested work engagement had a positive effect at both the individual and organisational level of a business and that work engagement was positively associated with self-rated health and working ability (Bakker et al. 2007). Therefore, employees who are engaged, in good health, and have leadership support are more likely to be equipped in coping with the demands that cause job stress.

Building on the JD-R framework, in order to increase job satisfaction, warehouse employees should be made aware of the organisation’s missions and leadership principles during the recruitment process. This is supported by (Autry et al. 2003), which concluded that employees who have realistic expectations about their employer and manager traits are more likely to be satisfied with their employment. It would give them an initial information resource regarding the culture of the organisation and its leaders. Armed this information before employment, workers may be better equipped to handle the demands of the role and the instructions of supervisors.

3.0 Methods and results

3.1 Qualitative Analysis method explained

Qualitative analysis is a method researchers use to obtain an in-depth understanding of business problems and address business goals (Zikmund et al. 2012). Because qualitative research is characterised by several features, it uses text as experimental material instead of numbers, and is interested in the perspectives of participants (Flick, 2007), often in a natural setting (Zikmund et al, 2012). As a great deal of qualitative research has an interpretive approach to it (Flick, 2007), and the researcher is intimately involved, the results are subjective (Zikmund et al. 2012). A qualitative approach is beneficial when using a small sample of data and involves less structured techniques such as face-to-face interviews (Zikmund et al. 2012).

Six employees across various roles within the Amazon fulfillment centre were interviewed using a semi-formal, one-on-one interview style. The interviews were conducted in a quiet room at Amazon and lasted approximately thirty to fifty minutes in duration.

Transcripts from the interviews were coded for common themes regarding issues in Amazons warehouse fulfilment centre. These themes were then assessed against the the JD-R model. The results were recorded in a table categorised by themes and sub-themes. Sampling employees across a number of different roles in the fulfilment centre assisted in accurately reflecting the people of relevance and internal validity. As the interviews were conducted on site, in a more natural setting, Zikmund (2013) states is it is easier to maximise the external validity, as the results are more likely to generalize to the actual business situation. However, increased external validity comes at the expense of internal validity (Zikmund et al. 2013). When conducting an experiment, it is ideal to establish internal validity first and then focus on external validity (Zikmund et al. 2013).

General Overview of Amazon: Report on Case Study

Amazon Case Study

Amazon functions as a multinational conglomerate company and is acknowledged as one of the world’s biggest online retailers. Amazon’s mission statement affirms that they aim “to build a place where people can come to find and discover anything they might want to buy online”, which is evident to be somewhat successful due to the rates ranging between 2.9 to 4.3 stars from numerous online reviews. Despite Amazon’s depiction of being a successful and friendly company, Amazon has been converged with many ethical dilemmas. These intricacies involve Amazon’s unethical behaviours towards worker’s rights and their ability to complete their environmental reports efficiently. Therefore, Amazon fundamentally focuses on its customers and services rather than the conditions of their work environment and the business itself, hence resulting in many ethical dilemmas.

In order to adroitly operate Amazon, all employees are obligated to conduct their jobs in a dynamic and efficient manner. Nevertheless, there have been numerous instances whereby Amazon’s employees have stepped forth and harangued about Amazon’s response to how employees are treated. According to CNET (2019), there have been manifold incidents reported where Amazon’s employees have been discriminated due to their pregnancies. This can be evident through a former Amazon worker, Rosales, who stated that ‘They need as many people that don’t need accommodations to work there. They care more about the numbers than their employees’. She allegedly reported Amazon on the basis of not fulfilling her needs as she was pregnant and required longer bathroom break. According to BBC News (2019), Amazon has been involved in seven legal cases that involve dealing with employees’ pregnancies. This demonstrates Amazon’s lack of duty of care towards their employees and is seen as one of the major ethical issues as they only focus on their business operations and not on their workers.

However, Amazon had responded to CNET by saying that they do not monitor the length of bathroom breaks. Amazon additionally, responded to BBC News (2019) stating, ‘It is absolutely not true that Amazon would fire any employee for being pregnant. We are an equal opportunity employer.” Aforementioned, some have been able to return back to work without any issues, whereas others did not obtain their job in Amazon.

Despite all these allegations against them, Amazon is also contemplated to be one of the most hazardous places to work. According to The Guardian (2018), it divulges that Amazon are treating their employees as robots. Within the article, it asserted that “ambulances had been called out 600 times to the online retailer’s UK warehouses in the past three years”. Consequently, it is evident through the GMB Union, who revealed that three dealt with pregnancies and another three dealt with significant trauma. Therefore, due to the high demand for medical attention, it is perceived as one of the most important ethical issue that demands a lot of concentration. Once this proclamation was released, Amazon was quick to respond by saying “Requests for ambulance services at our fulfilment centres are predominantly associated with personal health events and are not work-related”. There not enough sufficient evidence to state that Amazon’s working condition is below the employment standard, hence, making it an ethical issue and the laws governing the labour force cannot intervene.

Environmental reports ensures that organisations consider their impacts on environmental issues, and enables them to be transparent about their risks and opportunity. Although environmental reports are voluntary, it is still mandatory for some companies to complete the reports. Within Amazon’s sustainability report (2019), Amazon did not provide information on the impacts of electronic products or textiles used in their clothing. Amazon moreover does not information on toxic chemicals, despite the fact that the manufacture of clothing often releases hazardous substances that impact the environment. Especially for cleaning, beauty and personal care products, Amazon release a restricted substance list of chemicals but stated “all brands should work to phase out and eliminate”. However, they did not eliminate the hazardous chemicals at all. As a result of the fraudulent claims and statements about by Amazon, is recognised as an ethical issue and accordingly not a criminal act as the environmental reports are not obligations that Amazon are required to fulfil.

Shareholders of Amazon are impact to an extent when dealing with these matter as they morally view it is as being wrong to mistreat workers as Amazon is violating the basic human rights and technically not providing essential working conditions. However, some shareholders are not impacted as they do not agonise on the operation of the business but alternatively is more concerned about the profits earned. The environmental reporting enables communication between the business and the about the impacts of business on the environment. The environment reporting impacts the shareholders as it informs them about how Amazon is managing the issues and how they contribute to ecological and sustainable development.

Finally, it can be concluded that although Amazon is perceived to be one of the most prosperous online retailers, many issues emerge within the business operation. These ethical issues extend from the treatment towards their employees to their impact on the environment. Hence, Amazon reputations is constantly viewed down upon as a result of the lack of attention towards their dilemmas.

Bibliography

1. Ethical Consumer. 2020. How Ethical Is Amazon.Com Inc? | Ethical Consumer.
2. En.wikipedia.org. 2020. Criticism Of Amazon.
3. ETHICAL UNICORN. 2019. The Ethical Issues With Amazon.
4. BBC News. 2019. Amazon Accused Of Failing Pregnant Workers.
5. Cnet.com. 2019. Amazon Fired These 7 Pregnant Workers. Then Came The Lawsuits.
6. Butler, S., 2018. Amazon Accused Of Treating UK Warehouse Staff Like Robots. The Guardian.
7. The Balance Everyday. 2019. Why Amazon.Com Continues To Be The Top Internet Retailing Company.
8. Sitejabber.com. 2020. Amazon Reviews – 4.3 Stars.
9. Trustpilot. 2020. Amazon Is Rated ‘Poor’ With 2.4 / 5 On Trustpilot.
10. Sustainability.aboutamazon.com. 2020.
11. Privacy International. 2018. Amazon Accused Of Treating Its UK Warehouse Workers Like Robots.

Analytical Essay: Identification and Evaluation of Strategic Capabilities of Amazon and eBay

1. Introduction

This report seeks to strategically the article, “No-deal Brexit will ‘instantly disrupt’ UK’s role as £174bn global data hub”, extract from The Guardian’s online International edition from the views of Amazon and EBay (Appendix A, page 16) with respect to the economical nature of their businesses. The purpose of the report is to identify and evaluate strategic capabilities of Amazon and Ebay as a result this specific change in world events. The article implies that there will be a disruption of the free flow of commercially valuable data between Europe and the UK, causing sectors across the world to face great increases in costs of trade and possible increased issues with cross-border trading.

Amazon and EBay are companies of the same ecommerce industry that would be negatively affect by the no-brexit deal. They are known as each other’s biggest competitors. This report will first give a PESTEL analysis of the environment in relation to the no-deal brexit, evaluating its political, economic, social, technological, environmental and legal aspects. The findings from the analysis will be reviewed, discussed and justified by supporting evidence.

It will later compare and contrast the position of these two organizations in terms of the strategic environment and evaluate the opportunities and threats it presents by use of the Ansoff Matrix and SWOT analysis. It will include an assessment of the position of each organisation in coping with the no-deal brexit, discussion of the potential impact of external trends on each organization so as to advise which company is superior in handling these changes.

2. External Environmental Analysis

Pestle Analysis

Political

Most analysts expect a potentially declining EU power in terms of diplomacy once the UK ceases to be its member. Oliver (2016) points out that the United Kingdom is projected to become the most populous country in the EU and have the largest army in years to come, and losing the United Kingdom will mean stronger EU political and military strength. In turn, Brexit could trigger a domino effect and enable other countries to leave the EU, leading to EU disintegration (Oliver, 2016). Further political freedom may also be achieved by the UK. However, the UK’s separation from the EU may make it more difficult for some other countries, particularly the UK’s historic allies, to maintain friendly political ties with both the EU and the UK (Oliver, 2016).

Economic

Research by Kokotovic and Kurecic (2017) found that there are no positive economic effects of Brexit causing a sharp decline in the British economy and a significant decline in the price of the British pound after the referendum, which is explained by the lack of confidence of investors and the decrease in foreign direct investment rates. Capital Economics (2016) argues that Brexit may also lead to higher prices for imported goods in the United Kingdom due to the loss of opportunities for free trade with EU countries; that is, UK goods sold in the EU and EU goods sold in the United Kingdom may become more costly due to tariffs and quotas being imposed between those countries. Overall, Brexit has created economic uncertainty, particularly around the EU and the UK.

Social

Changes in the social aspect are likely to occur after Brexit is introduced. Andor (2016) stresses that, without UK aid, most European universities ‘ expenditure will be smaller, reducing scholarships and making it more difficult for some students to enter higher education. Hunt and Wheeler (2017) point out that another social aspect likely to be affected is migration, which affects UK citizens working throughout the EU and EU citizens working in the United Kingdom. New laws may allow them to apply for visas to complicate the work migration process around the world. In the meantime, the United Kingdom will be able to independently control the number of migrants being allowed into the country, but one of the main reasons why the United Kingdom has decided to leave the EU has been its concern about the migration (Bloomberg, 2016). While changes for migration law may create some difficulties for citizens, one of the positive consequences of this move may be the fact that the United Kingdom has decided to leave the European Union. The country’s lower immigrants and people with different backgrounds, the simpler it is for the indigenous population to preserve their national culture and dignity, which in effect leads to the world’s cultural separation.

Technology

Without the UK, the EU could not cope with the technology of such progressive countries as South Korea and Japan, resulting in the EU stagnating in terms of technological growth.

Legal

As far as law is concerned, there will be improvements to trade laws between the EU and the UK apart from making changes in migration law. The sides will need to re-negotiate the terms of free trade that currently exists between the two that will influence the export and import rates between the EU and the UK and minimize the exchange of goods between them (Vargano & Dolle, 2016).

Environmental

It is also likely that Brexit will have an environmental impact on the UK. Strict environmental protection goals have always been set by the EU (Himmel, 2016). To order to keep their level of pollution down, the UK will need to implement more environmental protection laws without the EU’s strict regulation.

3.1 Assessing the Strategic Position of Amazon

Amazon business strategy is cost management The global online retailer operates with an extremely thin profit margin and is competitive through a combination of economies of scale, creativity in different business processes and a steady diversification of industries. Amazon Business Strategie follows: 4 consumer concern, not market emphasis, inventiveness, determination and long term thinking (AMAZON, INC., FORM 10-K, 2018): Amazon’s business strategy is driven by the following:

1. New niches and segments are reached periodically. Just launched as a physical book store in 1997, Amazon now sells everything online on a global scale. Competitive advantage of advanced international logistics is the cornerstone of Amazon. That strength was used extensively by the engineering giant to effectively diversify companies. Amazon Home Services was recently launched as a quick way to purchase and schedule local professional services in order to further its diversification strategy.
2. Amazon Ecosystem Strengthening. Amazon ecosystem includes investors, writers, bloggers, advertisers, software developers and readers, researchers, journalists and journalist knowledge markets who are told that resources are being made available on the Amazon platform. Senior management Amazon is committed to optimizing the benefits of each aspect of the company’s ecosystem, and to improving relationships between the components.
3. Customer service priority uncompromised. Amazon business strategy relies on consumer fixation. The world’s largest retailer of the Internet by revenue focuses instead of short-term income on long-term growth. Amazon doesn’t take too much trouble in its effort to ‘fail to be Earth’s most customer-centered organization.’ Alternatively ‘Amazon sends a chair to represent the customer in every boardroom— a physical reminder to innovate.’
4. Concentrate on the principles of Amazon management. Another source of Amazon’s competitive advantage is the maximum contribution from human resources. Amazon’s work is extremely challenging and workers should have a heavy task load, sometimes losing balance between work and life. Amazon’s 14 principles of management, including concern with consumers, the highest standard and a deeper scope, play a key role in increasing human resources feedback.

Ansoff Matrix

The Ansoff Matrix has been a crucial planning tool for many businesses since it was first created and launched in1957 to make good judgements about company growth in goods and markets (Hussain, 2013). This indicates that all four development approaches are used in an interconnected and correlated way by Amazon.

In the Amazon business, websites in different countries have continuously been actively infiltrated. The e-commerce giant focuses in its software on user experience and personalization. Their market share has increased considerably; their core business and strategy have not yet changed accordingly (Hussain, 2013). It ensures that the service stays the same, but is marketed to new customers.

In a bidding to increase revenue according to (Hussain, 2013), ‘marketing new products to current customer markets can increase growth in the vectors and markets where there is a decline in existing product.’ The Amazon Product Development Group is now developing its own electronics brand as Amazon Fire Stick, Amazon Kindles and Alexa by Amazon, to name just a few, are now producing its own. This is due to their expansion and international influence over a long period of time. The experience at each local site offers customer satisfaction and product quality in the same way as the US. Previously, Amazon.com Inc. has worked in 13 countries, including Canada, Great Britain, China and India.

Diversification Amazon has diversified its business in both fragmented and conglomerated markets, in an attempt to constantly grow its market share. Amazon has developed its own line of electronics and began to acquire companies like Food Giant, Whole Foods, online shoe retailer Zappos, and the Twitch video streaming company in order to diversify its conglomerates.

3.2 Assessing the Strategic Position of EBay

Strengths

The internal policy factors that support business growth and global competitiveness are highlighted in this dimension of the SWOT analysis framework (Gupta et al, 2016). In the case of eBay Inc., these internal factors are advantages that allow the e-commerce industry to grow and develop. Stronger brands, economic efficiency, economies of scale, regional operations specificity and high service efficiency are all strong elements. One of the main competitive advantages of Ebay’s strong brand is the fact that it is easily recognized by customers and traders. Economic efficiency is a strength that helps eBay to fulfill its corporate vision and mission statement and helps to make the company one of the biggest players offering Internet services for online markets and classes. In addition, regional operations lead to flexibility and competitiveness in responding to challenges in regional online retailing / sale markets. EBay is also increasing cost-effectiveness. Its strength is focused on the organizational structure of eBay, which includes geographical divisions that organize local markets in particular.

Weaknesses

In the SWOT model, the emphasis is on internal strategic factors that impede growth and development of enterprises (Gupta et al. 2016)t. With eBay these internal factors are the deficiencies that make the quality of the online marketing / retail network, classified listing websites and ticket exchange business difficult to boost. Their weak points of limited focus on technology, limited flexibility towards market conditions, and an imitable business model are required to improve competitiveness and efficiency. The company’s top priority is not creativity. This weakness in our internal market limits the global ecommerce company’s growth and competitiveness, as innovation is the major driving force for growth in companies that have website trading or mainly internet operations. On the other hand eBay’s organisation, which in some respects helps but disadvantages to its business, maintains strong centralized functional units. The imitative essence of the business model of the organization is a vulnerability that leads to competition with new entrants in general.

Opportunities

The external strategic factors that facilitate or support business growth and improvement are defined in this dimension of a SWOT analysis (Gupta et al., 2016). This is where eBay Inc. is able to grow on the basis of external factors in the e-commerce market. The management of the company should establish suitable plans that address these challenges. The key opportunities for EBay include extending operations to include more customers, growing innovation levels, and improving the quality of customer service. EBay is able to diversify its online activities into other markets, growing sales and spreading the threat between more competitive e-commerce markets, and taking advantage of rising online shopping and technological trends.

Threats

In this component of the SWOT analysis method, the emphasis is placed on external competitive factors which can affect business performance. The organization has an opportunity to improve its creativity for competitivity through product development. This case shows that EBay’s output may decrease because of such external factors in its business environment. This is a threat to profitablity and sustainability in the online trade sector, which is secured by the company. EBay’s major threats are strong competition, imitation and potential disruption of industry by new technologies. The company faces rivalry between large and small e-commerce companies such as Amazon. This strategic external factor is an obstacle to growth in the sector. Imitation is a hazard, since other businesses or entrants can use available technology to imitate eBay’s business model for website operations. EBay is facing potential competition in the market, based upon technological changes that can alter the business performance of the company dramatically. In order to respond to external strategic considerations in this dimension of the SWOT analysis, managers must ensure a continuous improvement in competitive benefits.

4. Implications of External Environment Changes for Amazon and EBay

Amazon advises its retailers in the UK to consider stockpiling some goods outside the UK, to ensure that the market for their products can be maintained in a no-deal scenario, at least in the short run. In reaction to the imminent no-deal Brexit. It is not unlikely that Brexit will bring about multiple political, cultural, technical, regulatory and environmental changes while it can be a difficult task to forecast Brexit’s effect and clearly distinguish between its positive and negative impacts. Irrespective of the result of Brexit, both the EU and the United Kingdom must concentrate on achieving a consensus, preserving good ties and, above all, working together to tackle global problems such as terrorism, environmental problems and global warfare.

Rob Hattrell states that the decision to withdraw from the European Union is a chance for eBay-ownered companies which have been primarily exporting and, thus, since Brexit was announced (Osborne, 2017), exporting goods from the United Kingdom have been on the rise. He also said this was due to British small businesses ‘ strong entrepreneurial row, producing valued and searched goods throughout the world (Osborne 2017). He claimed that companies are very agile in their capacity to restructure and reconfigure and respond at enormous speed to macroeconomic challenges (Osborne, 2017). In addition, Brexit is another transition, and EBay needs to concentrate on consumers as this region can increase because household income is subject to economic pressure because one of the way people can mitigate this is by using our platform for purchases (Osborne, 2017).

5. Conclusion

The report aimed at identifying and evaluating Amazon and Ebay’s strategic capacities, as a result of this change in world events. The article implies that the free flow of valid commercial data between Europe and the United Kingdom will be disrupted, causing industries around the world to encounter significant increases in trade costs and possible increased cross-border trading issues. From the analysis conducted on Amazon and EBay, it can be seen that Amazon will have a greater advantage of EBay in terms of revenue in the case of the no-deal Brexit. However, EBay may have opportunities of increasing the revenue as households may have to turn to their platform to resell in the end.

Critical Analysis of Amazon Diversification

Amazon was created with the intention of it being a book selling website, but with its success Jeff Bezos diversified it into many different markets to expand his own company. The website is now used to sell/buy apparel, medicine, movies, electronics, and even grocery shopping for some people. With online shopping at its highest point it’s ever been, Amazon is pursuing the perfect strategies to keep their company at the absolute top. A few reasons why Amazon is as successful as they are today is because they are so innovative and compared to other online shopping websites, they are best known for their customer service.

One reasons as to how Amazon is so innovative is because of the making of the Amazon echo, which can be used for many things such as, playing music, check the weather or even check on your favorite sports team. It was a huge investment by the people of Amazon, but it was successful, and they sold over 22 million in 2016 alone. (Howland) This is just one of the brilliant innovative ideas of Jeff Bezos. Amazon continues its success and has so many daily shoppers mainly because of its unbelievable customer service. Amazon has a wide range of tools set out for customers track anything about their package or make any returns that are needed with no hassle. Amazons customer service team has won several awards for being so helpful to customers. Amazon has also expanded their customer service to many social media platforms which just increases the wide range of options you have to go for help.

Amazon basically develops new products to serve in existing markets. Amazon also offers free repair service. This where they can give assurance to the consumers for products like electronics and motor parts. This leads the customer satisfaction and people will tend to purchase more products from amazon. Amazon uses a conglomerate diversification strategy because they started off as a mainly book selling company, but they expanded into a new area of which they do not have much knowledge/experience with. This strategy usually carries a slight risk since there is lack of knowledge in the area you are expanding into. (Wasserman)

Amazon expanded throughout the entire US and became one of the biggest companies, but they also diversified into foreign places such as Japan, Europe, and Asian and Latin American countries. This helps Amazon diversify into different market and customer areas that they never could have thought that they would reach. It is a great idea to diversify no matter which industry you are in. Expanding into new and different markets will help your company in areas that you wouldn’t think of. Another huge advantage on Amazons side is being paired with googles search engine. For example: if you search for a product on google it will give you options from Amazon (if they are available on that website), alongside some options from other websites but Amazons would be most reliable to purchase from. Another reason Amazon is so successful is they strive to get the cheapest prices possible for their customers. Once operating expenses goes down the company will be able to provide goods and services at a cheap price.

Therefore, the selling capacity increase and this leads them to increase their revenue. A great strategy that Amazon uses is they form so many partnerships with non-online retailers to sell their product online. This causes the company to buy highly valuable brand name products which leads the companies to get more income while also expanding.

Amazon has also diversified their company so much just off executing the basic concepts perfectly. They built up a huge customer base and now they are taking over online retail because they give you no reason to purchase something off another website unless Amazon doesn’t have it available itself. They get enough information on their customers to know what to advertise for them and put out, and they also have enough distribution centers around the world which allows them to ship products at a very fast rate to anyone. The largest online market has also implemented plans to adopt a “Brick and Mortar” strategy. Amazon realizes that people are dissatisfied with shopping in stores and they want to change the entire experience. With this Brick and mortar strategy being implemented, Amazon would have their own physical store alongside the online one, and people could make purchases by just saying a few words to their Amazon echo. Another advantage Amazon is going to have over every online retailer is that, once this Brick and Mortar model is fully implemented, Amazon is going to have same day delivery using drones which is going to fulfill the customers’ needs like no other company can. Brick and Mortar is a popular strategy by many, but Amazon just started implementing the idea in around 2015-2016.

Amazon has also started creating “Amazon go stores” where customers can go in and buy any grocery essentials (breakfast,lunch,dinner,snacks etc.). What makes this store so amazing is that it is all advanced, you don’t have to wait on any lines, you literally just grab whatever you need, and you can go. The only thing you need to make sure you have before you go is the “Amazon Go” app installed on your phone. Shopping at Amazon go is also very time conservative because, if you have to go out to pick up some vegetables you run the risk of waiting on a 15-20 minute line if its busy, at Amazon go you can just go grab whatever you need and go and pay through the app. Amazon is really changing the entire shopping scene in every aspect whether it comes to, food, electronics, etc. The only negative to come out of this that is the effect on job loss. They way Jeff Bezos expands though it wouldn’t be surprising if they had them all over the world by the 2030s. (Caffo)

Amazon is striving most during the Holiday seasons because everyone goes on there to rush presents for their families. Also, Amazon knows how to convince customers to always go back to their website and purchase from them. For example, during the holiday seasons, Amazon loves to offer free gifts to people making purchases on their website. They have deals in which if you are someone purchasing a stereo set during Christmas time, they will offer to send you some Christmas time music CDs. They also have a wide variety of options of gifts but it is only on select items when you are shopping. If you are signed up with Amazon, they will also frequently send you emails with promo codes for free gifts/discounts. When customers get treated like this, they have absolutely no reason to not come back and shop from there.

It is mind-blowing how far Amazon has come since they started off as strictly selling books, and now they have paved their way to become the leaders of online shopping. Amazon has the widest selection of products in the entire world on their website which just goes to show how much they have diversified as a company. They use all forms of advanced technology to take care of all their customers and you can chat with customer service at any time. Many companies are entering this industry, it’s just a matter of what Amazon could do now to keep themselves at the top.

Essay on Amazon: Pestle Analysis

Introduction:

Amazon was founded in the year of 1994 by Jeff Bezos which progressed to be an industry leader in e-commerce today. Bezos original business idea was to be a bookstore however he saw the opportunity to diversify his existing business to be more than just a simple bookstore. Bezos decided to expand and operate in many different segments of the market the three main areas being, electronics, media and other merchandises. Although Amazon is a market leader against business such as Google, Netflix and eBay. There are many external factors that affect Amazon which I will highlight in this report, that the director has asked for me to produce.

Analysis of the business:

Political:

A political issue which affects businesses is trade protectionism, this is when trade barriers are implemented to toughen the level of imports and exports allowed in a country. This is an issue which is being put forward by the trump administration. By introducing trade protectionisms, it will make it difficult for business that are not native to the USA to operate successfully there. (Diamond.2017) Although Amazon is not a foreign business in America the materials which they import are from these foreign countries therefore it might hinder their operations if tariffs are introduced. Not only will Amazon face issues with their operation they may take a hit to their overall business image and name if buyers think they are getting exploited by higher prices that amazon might have to charge in order to be able to cover their costs. This will leave Amazon with the decision of whether or to they will be passing their costs on to their customers. Another key political issue which Amazon are going to have to face is Brexit. Brexit is the departure of Britain from the European union.

As of right now the Britain is still a part of the EU but once they leave the will also lose benefits which come with being a member of that trading bloc. The government of America and the British government are deciding on deals they can have with trading between themselves. (Gilchrist:2017) If an agreement is made then it may be beneficial to Amazon in terms of helping them to operate more smoothly in their market. As Amazon was originally an American business but expand to different countries, while operating in the UK and having this potential trade agreements it may lead to Amazon being able to import from foreign countries without the extreme taxes being placed on it. In contrast to the trade protectionism that could be placed by the Trump administration by having the agreement between the UK and America instead it would be beneficial to Amazon as they will be able to keep growing as a business and become more profitable.

Economic:

As a global business Amazon will constantly be faced with economic difficulties as they are constantly changing and functioning in different economic countries. The main threat that Amazon will face in the UK is Brexit, this will have a knock-on effect with both Amazon operations and their consumers. They will be faced with new taxations which may negatively affect their profitability, as the cost of their materials may see an increase especially in the materials which are imported from other countries. As of right now whilst the UK are still apart of the EU, they can trade freely within the EU however they can also trade with countries outside of this trade bloc. However, once the Brexit deal is complete the UK might not be able carry on functioning as they used to, there is a high chance that Brexit will mean EU customers will face extra taxes on goods. (Johnson 2016)

Recession is another key indicator in the environment that could affect Amazon. For instance, the economy of china is nearing a standstill, not only does this having a negative effect on China itself as a country. The Chinese recession also poses to threaten Amazon as they envisioned themselves expanding their business into the Chinese economy. As of right now the leading company that operates in china is Ali Baba, which is one of Amazons competitors, Ali baba have a competitive advantage against amazon as they wanted to penetrate the Chinese market, but Ali Baba beat them to this. If Amazon were able to move into the Chinese market this would benefit them massively as they would be able to increase their profitability and market share

Social:

A major issue which has a great effect on society is the battle with health. There are currently around 700 million people who are classified as being overweight, this leads to immense pressure on the government to promote activities and diets which encourage people to look after themselves and decrease the amount of people being classed as overweight (Bedard,2017). The issue that Amazon faces as a company is that they are seen to be encouraging people to not lead an active lifestyle. This might be the image they give off as they provide a service which allows users to order whatever they want and it will be delivered right to their house, there is another service that amazon provides which is Amazon Prime, this service allows customers to have access to next day delivery but in some cases the same day delivery. By offering this service to consumers it seems like Amazon is contributing to the obesity pandemic as they unintentionally are promoting the non-active lifestyle.

Although it may look like Amazon is negatively impacting society a survey conducted by recode poll discovered that roughly 20% of Americans feel as if Amazon have been positively impacting on society unlike many other tech companies such as Apple, Facebook and Google.

Technological:

As time goes on there are new developments in the world of technology which affect many businesses. Therefore, increased levels of innovations are a requirement to be able to meet the demand which businesses face due to the increasingly globalised and interconnected supply chains which leads to them operating in a more efficient manner. (Sindi and Roe, 2017) Many businesses operate by working smarter not harder. This is visible the way in which Amazon operate, from visiting one of their warehouses I was able to see that they have a piece of machinery which allows for them to scan the dimensions of the packaging in order for them to be able to sort it out much easier and quicker than what they were able to do before. After the new machinery scans the dimensions it is automatically sorted it into the right section this makes Amazons operation run smoother as there is a decreased chance of human error as everything is completed with the use of a computer. This new piece of technological machinery is very beneficial to Amazon aa they are saving on time and money. Amazon are able to save as they don’t need to employ staff to manually sort the packages into their sections.

In this industry the likes of Ikea already give their customers the choice to visualise how furniture would look in their rooms if they were to purchase it. (Mintel 2018a). There are currently arrangements being made by Amazon with plans to also introduce virtual reality tools. This will allow Amazons customers to envision the products which they are looking to purchase, this is possible due to the increase in smart homes meaning consumers can interact more with businesses and their products to ensure they are purchasing the right items for them.

Legal:

Multinational companies are having increased pressure on them to carefully asses their clients, they are encouraged to do a risk assessment on clients who are politically sensitive or clients who appear on terrorist watch list need to be authorised.(Gov 2016). Currently Amazon is being prosecuted by the federal government as it seems as if they have sold goods to individuals who are on terrorist watchlists which violates the US sanctions. This shows that Amazon are showing a disregard for US laws but also laws internationally and safety for everyone. (Daily Mail 2017)

There are many rules and regulations that a business needs to follow if they are to operate successfully some are beneficial to businesses however others can really threaten the business. For Amazon a threat to their operations is the different consumer privacy acts. The main act which may have a huge impact on Amazon is the “California consumer privacy act 2018” this bill is meant to meant to increase the privacy right and protection of consumers. Major companies such as Amazon, Facebook and Apple are going to be required in 2020 to inform their customers fully of what they intend to do with their data. They need to inform their users of what they are collecting and how they are going to share the information they provide. (Newcomb 2018). Consumers will be given the option of opting out of their data being used this will be a very big threat to tech companies such as Amazon as they rely heavily on the data their users provide them with.

Environmental:

Businesses are being encouraged to be more environmentally friendly with how they operate. Green peace accused Amazon in 2018 of having poor environmental practices with how they operate their business. Green peace accused Amazon of being opaque in their submission of their data regarding the environment.

Amazon Organizational Behavior: Analytical Essay

Introduction

Amazon is an American multinational technology company and the largest e-commerce market and computing platform in the world and the second largest employer in the US. It is based in Seattle, Washington and was founded by Jeff Bezos on July 1994. It started as an online library but diversified later to sell everything, which has brought her up to being the most active online selling platform with its distinguished was of leading, communicating and implementation of smart online selling strategies while having 100 million people who are subscribers to Amazon Prime. (wikipedia, 2019) It is a company with around $75 billion in annual revenue, a $140 billion market value.

Organization heroes

At the highest level of Amazon, Jeff Bezos has a team called the “S-Team”. Each one of the team is responsible for a large entity under them. The main heroes are:

• “The heart and soul of Amazon” Jeff Bezos, he is the founder and the CEO of Amazon.
• Jeff Blackburn, he is an executive and a part of the investment banking team which took Amazon public.
• Andrew Jassy, he runs web services. He is a big deal because of running a very important section.
• Jeff Wilke, He is effective in building the supply chain infrastructure.

Then comes the CFO, controller…etc. But, the above 4 people are the key players. (franklin, 2018)

Organizational structure

Amazon has a hierarchical organizational structure. Despite its large size, unlike other hierarchical organizational structure companies, Amazon remains highly flexible to adapt to changes in the marketplace. (dudovskiy, 2018)

According to the articles and sites that I have read, I can tell that amazon has a comfortable environment for employees, so they follow an informal internal structure as employees interact directly and easily with head managers through emails and other communication methods.

Decision-making process

Decision-making is a comprehensive organizational process that has an impact on each level in the organization including, individual, group, and organization itself.

Bezos takes a red pen to cross out anything that doesn’t send the simple message ‘You won’t find a cheaper, friendlier place to get everything you need than Amazon’.

The Decision-making process in Amazon includes brainstorming, affinity diagramming, force-field analysis, flowcharting, planning matrix, unilateral decision-making, consultative decision-making, voting decision-making, and consensus decision-making; analyses the utility of decision-making process in organizational settings and investigate their implications for quality management in organizations. (htt)

Amazon is known for being accurate and data-driven.

“You have to realize: decision making isn’t one size fits all,” said Bezos.

To know the difference, said Bezos, ask yourself two simple questions: “What are the consequences of this decision?” and “Is this decision reversible?”

Reversible decisions are a low consequence and reversible. These decisions can be made quickly with data and by junior teams. “If you make the wrong decision,” Bezos explained, “the cost is low.” Large companies can become less intelligent when small, reversible decisions are made using a “big consensus process.” Even if it isn’t the greatest move, going fast will help you get a leg up on the race. “The cost of being slow is so much higher than the cost of getting the answer exactly right,” he said.

Irreversible decisions demand more care. These high-consequence decisions should be made by senior leadership, single individuals or tiny teams. Bezos referred to himself as “a chief slow down officer” Bezos called these types of decisions “one-way doors”.

With huge, irreversible decisions, gut and intuition can play a big role. “People think of Amazon as very data-oriented and I always tell them, look, if you can make the decision with data, make the decision with data,” he said. “But a lot of the most important decisions simply cannot be made with data”.

Leadership style and motivational environment

Amazon is famous for the approach “disagree and commit.” (what’s amazon’s leadership style, 2017)

Comprehensive conversations in which different opinions are expressed are valued. Inclusivity and collaboration are keys to what they are. They pride themselves for being respectful for their employees and willing to listen. Their history has shown them that they get more things done together.

Amazon has a type of e-mail that emerge panic waves. It occurs with annoyed customers complain to Jeff Bezos public e-mail address. He always reads customer complaints and forwards them to the employees, with adding just a question mark. When employees receive the email, they react as they’ve discovered a ticking bomb. They just have a few hours to solve the problems and prepare an absolute explanation for it. Such escalations are Bezos’s way of ensuring that the customer’s voice is steadily heard inside the company.

‘Every story from customer matters, we research each of them because they tell us something about our processes. It’s an audit that is done for us by our customers. We treat them as precious sources of information.’ (stone, 2013)

Here are two ways that Jeff Bezos follows to distinguish his leadership style and his Amazon from others: (blazek, 2016)

a) “Customer is king”

While other internet firms focus on a fun and relaxed atmosphere for their employees, Bezos is proving the effectiveness of another model which is coddling his 164 million customers, instead of his 56,000 employees. Bezos places a huge deal of focus on what the customer wants and doesn’t want. Amazon realizes that consumers hate delays, defects and out-of-stock products. That’s why each of these issues and its smallest detail is continually looked after.

Amazon’s statistics showed that 0.1-second delay in loading a page equals a 1% drop in customer activity, so they work tirelessly to improve the loading rate.

b) “Expect more from your employees”

When Amazon was still just an online bookstore, they had 500 employees for the sole assignment of responding emails. Each one of them was expected to answer 12 emails per minute, and could perhaps be fired if the number dropped below 7.

Working for Bezos isn’t a walk in the park. He has high expectations from his employees and doesn’t apologize for it.

Communication

“Bezos escalation email” is a statement that you can ask people about, it reflects the easiness of access to Jeff Bezos. First, this shows that communication within the organization is fostered by the managers’ accessibility. Second, this shows how responsive and active managers are towards their employees instead of depending on them, even it is an employee complaint or a customer complaint.

Talking about Bezos’s way of communicating, he is pretty strict and straight with being motivationally a great supporting tutor. While in public he seems charming and capable of great humour, in private he explodes into nutters as his underlings say.

If a co-worker fails to meet Bezos’s exact standards he may be fired, and if an employee does not have the correct answers or attempts to bluff, or takes advantages of other’s work, or manifests an uncertainty of internal politics, or weakness in the heat of the conflict, a blood vein in Bezos’s forehead explodes and his filter falls away. He’s capable of overstatement and harshness.

Amongst his greatest hits, collected and delivered by Amazon veterans:

“Are you lazy or just incompetent?”, “If I hear that idea again, I’m going to have to kill myself’, ‘We need to apply some human intelligence to this problem”, after reviewing the annual plan from the supply chain team “I guess supply chain isn’t doing anything interesting next year”, after reading a start-of-meeting memo “This document was clearly written by the B team. Can someone get me the A team document? I don’t want to waste my time with the B team document”, after an engineer’s presentation “Why are you wasting my life?” (Stone, 2013)

‘He is not that kind of person. Jeff doesn’t tolerate stupidity, even accidental stupidity.’

Some employees support the theory that Bezos- like other co-founders- lacks compassion. This leads to him treating workers as expendable resources without taking into account their contributions. That allows him to coldly allocate capital and labour and make hyper rational business decisions, where another executive might let emotion and personal relationships count into the equation. They also acknowledge that Bezos is essentially obsessed about improving the company’s performance and customer service and that personnel issues are secondary.

Bezos’s criticisms are almost always on point. Bruce Jones- a former Amazon supply chain vice president- describes leading a team of five engineers, trying to figure out how to make workers’ movement more efficient and fulfilled. The group spent 9 months on the task. ‘We had beautiful documents, and everyone was really prepared’ Jones says. Bezos read the paper and said, ‘You’re all wrong’ then stood up, and started writing on the whiteboard.

Electronic communication

Technological improvements in workplaces have increased business productivity, quality improvements and efficiency. The emerging challenge is to ensure that technology development, e-communication, knowledge sharing and coordination of organizational activities occur routinely while managing the use and misuse of technology. (Ebsco, n.d.)

The importance of electronic communication in workplace collaboration began to rise in the late 20th century and it includes:

1. Direct communication (voice or text-based telecommunication devices, computers).
2. Indirect communication: an intermediate method, including not limited to Internet-based social networks. It shall also include change of signs, signals, writing, images, sounds and data. (electronic communication between employees and students, 2009)

Email, virtual team rooms and other basic interactive tools provided by the Internet were among the first drivers of dispersed work teams. These tools enable companies to have employees collaborate on projects economically, even when they are located in different parts of the world.

Diversity

A result of the availability of greater electronic communication tools is the increased ability of companies to develop diverse workplaces. Electronic communication tools make it easier for companies to provide diversity training webinars, tutorials and forums online.

Limitations

Electronic communication have limitations. Face-to-face communication remains important to build solid relationships with customers and co-workers. Agencies may use email to approach a potential customer, but agency representatives usually travel to meet with customer executives to sell campaign ideas.

It also lacks some of the efficiency demanded in urgent situations. If a decision is needed quickly, face-to-face or phone conversations may work better.

Also, Protecting the privacy and confidentiality of information is another matter for firms that share information electronically. Some firms also abuse or misuse email and other electronic tools for non-work, non-ethical activities. (kukemuller, n.d.)

Amazon’s Key Competitive Advantages

Amazon is a company that sells items globally online, for a decent price, for customers who are interested in buying products from their website. Amazon is a large business with over 250 and more employees, this means that the business is extremely popular. Amazon is a public limited company, this means they want to gain profit by being a public limited company. By being a public limited company amazon can offer shares to the general public. The benefits of Amazon being a public limited company is that it will allow the company to have limited liabilities. Another advantage for Amazon being a public limited company is that Amazon can receive investments from banks, wealthy individuals and so on. Shareholders can also benefit from this as they can sell their brand to Amazon.

There are 3 main production steps for a product to be sold in the market: primary, secondary and tertiary. A first step for a product to be made is primary, this is when raw materials like wood, coal and metal and many more are sold to secondary consumers. Secondary is when raw materials are manufactured into production, at this stage once the products are manufactured they are given to the territory to sell onwards to consumers. Territory are sellers, they sell the product onwards manufactured by secondary consumers.

Amazon is a tertiary business they buy secondary materials from secondary factories to sell on or support their brand. Small businesses like small grocery stores purchase quantities of goods from amazon to resell onwards and gain profit.

Across the globe, there are more than 175 warehouses for amazon where they package their products, returns and exchanges. Amazon is a website used globally that is widely available to many countries, when purchasing a product from an international country, it is brought from amazon, amazon then sells and ships their products globally. Amazon engages in charities by giving 0.5% of their net product worth, however this is a customer’s choice to opt in.

Amazon is extremely successful as they are a global company, this means amazon is globally accessible to a lot of customers. One reason for Amazon being successful is that Amazon has their own products such as amazon prime, fire stick and furthermore. One of their main reasons for Amazon being so successful is that they sell products at a lower price, customers demand lower prices for their products as they don’t want to pay a lot. Another reason is that they deliver fast, this can mean that customers will get their products as soon as possible. They also have a wide range of products, attracting a wide range of the customers. Having these advantages will create more traffic resulting in a successful business. However, these so called advantages could lead to disadvantage, as lowering prices can lead to less profit. For example buying an iPhone for £100 and then selling it onwards for £110, in order to make a rewarding profit, the business will have to sell 10 units of the product. Delivering could lead to a disadvantage as Amazon would need to deliver on time, safely and think about how to export.

Amazon aims to extend their business as they have started online delivery services, they have added an option where you can shop groceries online. Amazon’s next plans are to build groceries stores across the globe to increase profit and promote their brand in multiple countries. Amazon plans on knowing what their customers need and wants in order to improve their business.