In the current world of digitalization, e-books and digital books have dominated. They finally leave the computer, as they are readable on external devices. The technology of e-book readers has taken e-book reading to an edge over the print media. The market is now flooded with various e-readers. Having a good e-reader is an essential part of making the reading enjoyable. But deciding on what model to buy is a confusing task.
Ebook Reader Becomes a Winner Take all Market
Among the brand names, Amazon will continue to be the market leader with 60%share of global shipments in 201. Barnes and Noble, and Sony have been fighting for second place with a narrow margin. North America has become the biggest market for e-readers. In the European market also e-book vendors have largely expanded their presence. It is expected that, by 2014, global e-book reader shipments will reach 63 million units. This kind of growth points out that it will capture the world market shortly. “Without doubt one of the most hotly contested markets in the next few years will be for e-book readers” (Mchaney 63).
Sources of Network of Externalities in the E-reader Market
When the value of a product and its technology service depends on other entities using it, it is called network externalities. Direct network externalities include telephones-commerce and the internet etc. In this context, the source of network externalities can be internet and e-commerce.
Amazon the Market Leader but Sony is Fighting Back
Amazon’s Kindle range is well known for being the first and foremost leader in offering wireless connectivity to users. Since then, Amazon has been known as the pioneers of the e-reading market. Kindle dominates in the market due to their ability in producing readers with wireless connectivity. Apart from this, it is known for its ability to handle 3G and WI-FI. Though Sony was the first to launch an e-reader, it still lags behind its rival, Amazon kindle… Users of the Sony e-reader have to connect their e-reader device with PC; this is the key mistake from Sony’s side. Kindle offers free the wireless air downloads of books with cutting edge technologies Sony is fighting back.
The daily edition offers landscape orientation and portrait. Sony launched a five-inch screen device worth $200 and a six-inch touch screen model worth $300. Amazon’s Kindle 2 e-reader with six inches sells for $300, and a 907-inch screen costs $490. Both are without a touch screen. Compared to Kindle, Sony has another defect and it is in its access to content. Amazon’s leading position in the e-reader market helps the company to offer a variety of eBooks to its buyers. They are easy to download and can be obtained at a competitive price. For providing library access to end-users Sony has started its partnership with an e-book distributor. Sony will adopt an open EPub which helps customers to purchase or download books from stores of Sony. While Amazon uses a kind of file format that only helps users to read books. “The device brand isn’t as important as the content: success will increasingly depend on the strength of the relationship between reader and content provider” (Maisto par. 9).
Conclusion
Without a doubt in the battle of dominance for the e-reader market currently, Amazon’s kindle was ahead of Sony. But with cutting edge technologies Sony will be fighting back to gain market leader position. Surely, e-book reader will become a winner take all market.
E-Commerce actively develops today because it addresses the needs of modern consumers who prefer to use such websites as Amazon.com and eBay.com in order to do their regular shopping. In this context, Amazon.com and eBay.com are businesses that develop according to the specific rules of e-Commerce while using the Internet as the platform for retailing and other types of transactions. In spite of the fact that Amazon.com and eBay.com have similarities in the development within the e-Commerce context, it is important to focus on differences in the business models followed by the websites, in payment systems, and in security principles.
Description of the Sites
Amazon.com is one of the leading world companies in the sphere of e-Commerce. The company that was founded in 1994 is headquartered today in Seattle, Washington. Originally, Amazon.com was oriented to selling books online. Later, the website began to specialise in selling a range of products, including music CDs, toys, software, and electronics (Amazon, 2015). The company also launched the production of electronics for customers and focused on selling e-book readers and tablets, among other products.
eBay.com is an online auction founded in 1995 and belonging to the large corporation in the sphere of e-Commerce that specialises in promoting the consumer-to-consumer business. The company is headquartered in San Jose, California (eBay, 2015). Today, eBay.com is not only an online auction but also a standard online retailer, like Amazon.com, that proposes a variety of goods and products.
Target Audience
Referring to the criterion of the target audience for two discussed websites, it is important to state that Amazon.com identifies the target audience as a global community without focusing on aspects of age, gender, or culture because of the variety of products proposed for retailing. The main focus is on addressing the needs of the largest group of customers in order to maximise profits (Einav, Levin, Popov, & Sundaresan, 2014, p. 490). Discussing the case of eBay.com, it is significant to note that the modern target audience of the website is similar to the audience of Amazon.com because eBay.com has also focused on online retailing along with promoting the features of the online auction. Today, the representatives of eBay.com discuss the audience of the website as ageless and classless, although years ago, the company was oriented to the young population (eBay, 2015).
Type of Business Model
Amazon utilizes such two traditional business models as business-to-consumer (B2C) operations while orienting to their customers and business-to-business (B2B) operations while working with suppliers. Furthermore, the company works to apply the more progressive consumer-to-business (C2B) model when consumers can influence businesses with their reviews located at the website. eBay refers to such business models as consumer-to-consumer (C2C) operations typical for online auctions and the B2C model, which encompasses the main principles of online retailing (Ngo-Ye, 2013, p. 382).
Business Model Key Ingredients
In order to promote the commercial success, Amazon mainly refers to the B2C model, when consumers have the opportunity to search for the necessary product on the website, select it based on descriptions and reviews, and purchase the chosen item among the variety of other products categorised according to their types and purposes. B2B operations are observed when Amazon develops the relationships with suppliers while attracting more businesses to propose their products with the help of Amazon.com (Einav et al., 2014, p. 490). Finally, it is possible to refer to the C2B model while discussing the role of customer reviews located on the website to influence the consumers’ purchasing decisions and the brand image of the supplier.
In contrast to Amazon.com, eBay.com primarily functions as the online auction according to the C2C model. Using the website, persons can not only purchase but also sell different items while focusing on bids and competitive prices (eBay, 2015). As a result, users of the website receive the opportunity to buy and sell not only traditional products and goods but also collectables, elements of decor, domain names, and art (Ngo-Ye, 2013, p. 382). Furthermore, eBay focused on developing the B2C model while proposing the standard online shopping for users in order to attract more customers as the general public.
Payment Systems
Amazon and eBay chose to use different payment systems in order to realise and control transactions between sellers and consumers using the websites. Thus, Amazon.com refers to the services provided by the Amazon Payments system, and customers receive the opportunity to pay for goods while mainly using Visa and MasterCard as well as Amazon Payments products (Amazon, 2015). Amazon Payments products are the category of payment tools proposed by Amazon for the customers’ convenience. In their turn, the users of eBay.com have the opportunity to pay for products while using the PayPal system owned by eBay, Skrill as the electronic wallet, and credit or debit cards (eBay, 2015).
Security Features
Amazon has developed the security policy based on protecting the consumers’ private information regarding the numbers of their credit cards. Netscape Secure Commerce Server was launched in order to keep the customers’ credit card numbers separately from the other open or available information (Amazon, 2015). In contrast, eBay focused on providing the customers with effective guidelines regarding the process of creating accounts, and the company points at the necessity of using Microsoft’s Enhanced Mitigation Experience Toolkit (EMET) in order to reduce the frequency of criminals’ attacks (eBay, 2015).
Conclusion
Amazon.com and eBay.com can be discussed as the leaders of global e-Commerce because these websites attract the largest number of consumers from all over the world. The success of the companies’ activities depends on the selected business models. If Amazon focuses on operating in relation to several channels while referring to B2C, B2B, and C2B models, eBay utilises the advantages of using C2C and B2C models. Furthermore, the companies work to develop their payment and security strategies in addition to the marketing strategies in order to address and attract more customers from different backgrounds and having different demographic profiles.
References
Alimadadi, S., Sequeira, S., Mesbah, A., & Pattabiraman, K. (2014). Understanding JavaScript event-based interactions. Web.
Selecting a job is a challenging task for me, mainly because my choice will define the routine with which I will have to deal for several years or, in the best-case scenario, until retirement. However, some organizations have managed to retain their uniqueness and at the same time provide extensive opportunities for their employees to evolve, therefore, encouraging consistent growth. Amazon is one of these organizations; with its unique culture and focus on meeting the needs of all stakeholders, it is a perfect organization for working as a coordinator.
Location
The firm has numerous locations all over the world, including remote ones. Therefore, it offers its employees impressive flexibility. At present, the location in Seattle, WA can be deemed as especially important since it implies accessibility. Personally, I prefer working in a large city, where the infrastructure is well-developed and where living in the fast lane is a necessity. At the same time, I would prefer my office to be near my home so that the transportation process could be as comfortable as possible.
I would not mind relocating from the environment in which I currently am, mostly because I would enjoy an opportunity to have new experiences and learn new skills and information so that I could become proficient in marketing. Seeing that a change in location implies the necessity to cater to a different population, the identified alterations are bound to have a significant effect on my professional development.
Schedule
The same concerns the schedule; I am more than willing to have a flexible one, where my responsibilities and tasks may change based on the alterations in the environment and the factors associated with the needs of the target population. Even though a nine-to-five job seems a more reliable idea, it is also admittedly more boring. I would enjoy more excitement in my life, and I would be delighted to have a flexible schedule.
For instance, it would be truly exciting if the schedule changed due to regular travels. Business trips might seem a mundane and not quite interesting task, yet they offer a range of opportunities for engaging in multicultural communication and, thus, learning more about other cultures and their specifics. As a result, a better understanding of the needs of the target population will become a possibility, which is crucial for building an efficient brand image and raising brand awareness, especially for a company of the Amazon caliber.
Furthermore, I believe that it is crucial to promote the atmosphere of cooperation and mutual trust in an organization so that challenging tasks could be managed within a comparatively short amount of time. Therefore, I would like the job of my dream to foster qualities such as responsibility and the ability to negotiate with its employees. Furthermore, I would appreciate the setting in which work will have to be comfortable, with music slightly playing in the background, and managers having a sense of humor.
That being said, encouraging a laid-back attitude is not something that I would seek in managers since employers must challenge the staff to excel in their performance. Particularly, maintaining a delicate balance between providing employees with independence and supporting them throughout the project management process is something that I seek in organizations, and the organizational culture at Amazon is exactly when I need it.
Work Environment and Culture
As stressed above, opportunities for personal and professional growth are central to my idea of a perfect organization. Thus, I need to be able to use analytical skills related to marketing forecasts, e.g., the analysis of customers’ demands and the following suggestions for future changes to current brand products. Furthermore, developing new communication skills is what I look forward to especially eagerly.
I hope that my work as a marketing coordinator at Amazon will help make a difference in how the company’s brands are perceived among the target population. For this purpose, I will need to introduce a balanced approach to data collection and its further analysis. i.e., spend half the time communicating with people and the remaining half working a desk job, which is the combination that I prefer.
Job Function and Employer Information
I am happy to build skills in any industry. However, when considering particular industries that are of special interest to me, I must mention the areas such as retail and, particularly, specialty retail, where Amazon operates. With the opportunities for working with a vast number and a huge range of goods, the identified industry opens a plethora of chances for creativity. Therefore, working in large corporations that require coordinating a range of processes and performing several tasks at once is what I want to do.
Salary and Benefits
Finally, the issue of payment needs to be brought up as a crucial component of my desired job. Even though I am open to exploring financial opportunities, I would prefer to have an annual salary. Furthermore, a total of at least $50,000 a year is my current salary standard. While inspiration and flexibility are crucial to me, the financial aspect of my job is also essential since I need to invest in my professional growth. Finally, it is important to me that the compensation levels should be linked to my performance directly. Thus, I will remain motivated to perform to my best abilities and develop new skills.
Conclusion
Becoming a marketing coordinator at Amazon is an important step in my career. I hope that I will manage to get my dream job and receive numerous opportunities for professional growth. As long as I have my priorities in line, I will be able to attain success.
Key strength: The steady growth in net sales since 2012 from the US $61.093 million to the US $135.987 million (Amazon.com, 2016).
Key weakness: The lack of an accurate forecasting system; the company implements fixed amounts of expense and investments which may hinder a timely adjustment to environmental changes, e.g., decrease in sales and customer loyalty (Amazon.com, 2016).
Key opportunity: Established partnerships with such enterprises as America Online, Yahoo!, Excite, Netscape, AltaVista, @Home, etc. (Amazon.com, 2016).
Key threat: The level of competition is always intensive and continuously growing (Amazon.com, 2016).
Competition in the e-Commerce and Online Auctions industry
PESTEL: Technology is one of the major forces driving competition in e-commerce. This functional area comprises operations about digital content management, infrastructure management, computing services, order management, etc. (Killen, 2014). To keep up with the pace of advancement and ensure excellent information safety (e.g., confidentiality, reduced information distortion and loss, etc.), companies should constantly invest in technology.
Porter’s Five Forces: Rivalry. Intense rivalry triggers competition in the industry. The major of Amazon’s rivals include Alibaba, eBay, ASOS, and so on. Since many of these companies offer similar items, to maintain the leading position, the company should use smart pricing and marketing strategies, product diversification, etc. to attract new buyers.
Conclusion
Amazon has more strengths than weaknesses. First of all, the high level of competitiveness is supported by the low-price strategy. Secondly, the implementation of customer-oriented policies played a crucial role in Amazon’s development. The company invests in the improvement of customer services and marketing which largely contributes to the company’s success and profitability.
Amazon’s current opportunities outweigh the risks. It has a high profitability level and a vast profile of business partners. Moreover, the company uses smart market entry strategies (e.g., alliances, licensing) to mitigate the legal and financial risks due to operating in unfamiliar distant markets such as China or India.
Macy’s
According to IBISWorld’s Shopping Mall Management market research report (2017), there has been a decline in buyer traffic in the shopping mall market due to the growth of e-commerce. For several years, the major Macy’s strategic priorities were the attraction and retention of talents and aggressive pricing, yet the company fails to adjust to the shift in customers’ preferences and continues to promote the same old vision. Since nowadays e-commerce becomes dominant, a more innovative approach is required to revive the offline retailing. For instance, Loeb (2016) recommends arranging fashion shows and using space innovatively.
Target
Comparing to Macy’s, Target aims to expand the customer base by diversifying the product range and improving branding. At the same time, the company’s management doubled down on the core Target’s departments and products such as fashion and furniture which is considered to be the mall’s distinctive (Halzack, 2015). It means that Target recognizes customer preferences and interests and improves the marketing processes including analysis of customer needs and feedback. Additionally, Target has introduced effective pricing and shipping policies for the online business which helped to increase profits by over 30% (Halzack, 2015).
Organizational Culture
Organizational culture can be defined as a set of values, behavioral norms, and goals shared by staff members. Since corporate culture is an intangible asset, it can be managed through such practices as knowledge management, communication, value creation, etc. Communication may be considered one of the main success factors in organizational culture management. Through the establishment of open communication with subordinates, managers may increase team cohesion by introducing high standards of conduct, professionalism, and ethical values (Negin, 2013). Whereas the lack of efficient communication patterns within the organization may hinder organizational growth, employee productivity, and dissemination of important information.
There is no chance to convey organizational values, mission, vision, and other intangible and psychological elements of organizational performance without communication. Thus, it may be regarded as a means of strategic control. Not only communication allows the improvement of corporate culture but also encourages employees’ commitment to service improvement and overall business excellence.
References
Amazon.com. (2016). Annual report. Web.
Halzack, S. (2015). Business after a major rough patch, Target looks to be in the early stages of a turnaround. The Washington Post. Web.
Negin, M. (2013). Study the relationship between managers’ communication skills and staffs organizational Commitment. Interdisciplinary Journal of Contemporary Research in Business, 5(5), 198.
The financing activities section of the cash flow captures the issuance and repurchase of a company’s own debt instruments such as bonds and shares. It also captures the number of dividends bought. Table 1.0 shows the investing section of the cash flow statement for 2006 and 2007.
Table 1.0.
Financing activities
2007, $ million
2008, $ million
1
Proceeds from exercises of stock options
91
35
2
Excess tax benefits from stock-based compensation
257
102
3
Common stock repurchased
(248)
(252)
4
Proceeds from long-term debt and other
24
98
5
Repayments of long-term debt and capital lease obligations
(74)
(383)
Net cash provided by (used in) financing activities
50
(400)
From the table, in 2006, the net cash flow used in financing activities amounted to US$ (400) million. In 2007, cash flow generated from financing activities amounted to US$ 50 million which is an improvement from the previous year. The cash outflows from financing activities reported in 2006 resulted from repayment of long-term debt, payments on capital lease obligations, and repurchases of common stock. Repayments of long-term debt and capital lease obligations amounted to US$ 383 million. The company purchased 8 million shares in 2006 amounting to US$ 252 million. These two major cash flows contributed to the cash outflow from investing activities in 2006. The company reduced repayment of long-term debt and capital lease obligation in 2007 thus yielding cash inflow from investing activities. All other items under this section remained relatively stable apart from excess tax benefits from stock-based compensation which increased by the US $ 155 million.
Review of investing activities of Amazon for 2007
The investing activities section of the cash flow statement gives information on the acquisition and sale of long-term investments. It also captures information on the purchase and resale of property, plant, and equipment. Table 1.1 shows the investing section of the cash flow statement for 2006 and 2007.
Table 1.1.
Investing activities
2007, $ million
2008, $ million
1
Purchases of fixed assets, including internal-use software and website development
(224)
(216)
2
Acquisitions, net of cash acquired, and others
(75)
(32)
3
Sales and maturities of marketable securities and other investments
1,271
1,845
4
Purchases of marketable securities and other investments
(930)
(1,930)
Net cash provided by (used in) investing activities
42
(333)
From the table, in 2006, the net cash flow used in investing activities amounted to US$ (333) million. In 2007, cash flow generated from financing activities amounted to US$ 42 million, which is an improvement from the previous year. The biggest variation in the net cash flow resulted from purchases, maturities, and the sale of marketable securities. Purchase of fixed assets, including internal-use software and website development, increased by US$ 8 million from 2006 to 2007. Acquisitions increased by the US $ 43 million from 2006 to 2007. The sale and maturity of marketable securities and other investments declined by US$ 573 million from 2006 to 2007. Finally, purchases of marketable securities and other investments declined by US$ 1,000 million. This decline contributed to the cash inflow recorded in 2007. The low cash inflow generated from investing activities as a result of investment in technology infrastructure, related assets, and development of new products and features. The company also incurred costs in acquiring subsidiary companies and buying intellectual properties. In a conclusion, it is clear that the company carried out massive investments especially in 2006 hence the low cash inflows.
Amazon.com has merely invaded the market and reached every family in the globe. Its activity has a direct influence on the U.S. economy, impacting both investments and job opportunities. Currently, the enterprise is aiming to expand its presence and looks to open the second headquarters in one of the U.S. cities. The purpose of this research is to study the giant’s present situation, discuss the applied strategies, and make forecasts regarding its future.
It is known that the corporation has the largest market value among all online stores and continues to invest in technologies that assist it with expanding business assets (Columbus). One can assume that in the upcoming years the company will merge with a part of small businesses creating even stronger completion to the rest of the market players.
Amazon’s Current Situation
At present, Amazon is a global e-commerce giant with the greatest market value in the world. Among all groups of products that the company has in stock, the highest revenues come from electronics. In 2017, the mentioned category of wares brought the corporation an estimated $8.5 billion in sales (Columbus). This year, the retailer announced a multi-year partnership with Best Buy, which involves the launch of HD Fire TV Edition model variations from Toshiba and Insignia (Columbus).
Currently, the company operates in the three major dimensions: Amazon Prime, Amazon Marketplace, and Amazon Web Services. Amazon Prime represents the subdivision that is known to every consumer. It covers e-commerce activities, customer communication, product description, and after-sale services. Amazon Web Services introduces a specially designed computing platform for developers, while Amazon Marketplace offers web hosting for third-party sellers.
Regarding the size of the company, the retailer employs an extended number of workers. By October 2018 the employee count has reached 575,000, which includes both part-time and full-time hires (Columbus). Hiring contractual workers helps the corporation to keep its expenses in constant check. Market researchers, however, admit that with the rapid growth the company demonstrates, Amazon seriously affects other retailers forcing them to cut back on wages and strictly limit workplaces (Columbus). Thus, regardless of how favorable the situation within the firm is, Amazon’s impact on the overall unemployment rate is not always positive.
When discussing the company’s financial portfolio, one needs to operate with both income and investment statistics. At the end of 2017 Amazon’s annual returns showed $22.28 billion in cash equivalents (Columbus). The enterprise also had $737 million of equity investments in private and public organizations (Columbus). The given statistics relate to the fact that the corporation not only focuses on consumers’ satisfaction but pays attention to the importance of aiding smaller businesses.
By allowing third-party sellers to list their products on the site, Amazon creates favorable conditions for attracting new customers. Columbus stresses that 900,000 people have been employed owing to the company’s platform for entrepreneurs. It is known that the enterprise is currently in search of a city, which would be the home for its second headquarters. With regards to this fact, one may conclude that additional job opportunities will soon be created granting a chance for new talents to disclose their full potential. However, the number of jobs and average wages depend on the tax regulations applied to the state where the city is located.
Applied Strategies
At the moment, the company utilizes some strategies to attract new customers and increase its revenues. One of these strategies is focused on the “hunt for underserved market areas with high transaction volumes and undifferentiated channels that deliver margin growth” (Columbus). While the rest of the corporations adhere to the policy of defending acquired territories, Amazon attempts to conquer free zones and expand sales outlets.
The given approach allows the enterprise to go beyond the existing model of business and consolidate with the formidable market players. Each time such an opportunity arrives the company refers to its second strategy aimed at integration and combination of assets. Acquiring C.H. Robinson, for example, would allow Amazon to scale up its third-party logistics services and enter new market areas (Columbus). The fact that C.H. Robinson is advanced in using cloud-based applications only makes the idea of consolidation more attractive.
Another strategic model is linked to learning and exploiting AI technologies. The corporation makes focuses on developing and further use of virtual assistants that would help consumers to immediately resolve the occurring issues and thus, allow the e-shop to reduce the number of complaints (Columbus). Amazon is also seeking to provide its programming community with the basic AI tools to strengthen its contribution to the company’s market growth.
Successful implementation of virtual intelligence would lead to much lower operational costs and additional income from the raised number of platform users. As referred to the customer communication, the retailer works on expanding the available Alexa voice services. Recent company reports have shown that options integrated into the Amazon Echo stimulate customers to order more goods. With regards to this fact, adding new functions to a machine interface is a correct strategic decision that might raise the volume of sales. By optimizing the product search, the enterprise demonstrates its intention to continue conquering the market.
The vision of the Company’s Future
The company’s future is tightly linked to improving logistics and making shipping fast and convenient. Amazon has recently unveiled the concept of creating flying warehouses that are operated remotely and accommodate drones capable of delivering packages to the ground (Columbus). This airship would remain at high altitudes and would be regularly refueled by an aircraft. At the moment, the enterprise is working on the enhancement of its robots and adapting them to air conditions. Market researchers admit that the introduction of drone delivery would be a considerable step into the future.
Regarding Amazon’s financial situation, economists already make forecasts for the next 10 years. If the corporation manages to keep a yearly growth rate at 20% during the outlined period, it can raise its revenues to $1 trillion by 2027 (Columbus). The mentioned goal is much easier to achieve if the company’s intentions are supported by a cost-effective price policy. Lowering prices, in this case, could seriously assist with the task.
Conclusion
Amazon is a global giant, which disposes of extensive resources and has strictly defined strategies to successfully compete on the market and conquer new territories. A favorable economic situation within the company allows the enterprise to think of opening the second headquarters and creating additional jobs. Also, a clear vision of the future contributes to the corporation’s faster development and leads to the introduction of revolutionary services in the upcoming years. The given advantages stimulate returning consumers to order goods on a more frequent basis.
Developing the new project Amazon Prime Air, Amazon needs to hire professionals in fields of technologies and innovation, specialists in delivery questions, and other staff. Thus, Kelly Services’ assistance is necessary to provide the company with opportunities to implement the project successfully.
Subject: Staffing Solutions for Amazon.com, Inc.
Amazon.com, Inc. plans to develop a new system of delivering packages known as Amazon Prime Air in several years. It should start with the active use of flying vehicles such as drones to deliver the packages in 2015 (Amazon Prime Air, 2013). Amazon is one of the most influential companies specializing in the e-commerce around the globe, and Amazon Prime Air is expected to be the great innovation within the market to increase the company’s competitive advantage (Banker, 2013, p. 4; Donici et al., 2013, p. 253; “Tools of the trade”, 2013, p. 58).
The company plans to implement the delivery system not only in the United States but also in the foreign countries, and the development of the system requires the organization of an effective team to cope with all the issues associated with the project’s development and implementation (Banker, 2013, p. 4).
Today, Amazon needs professionals in the fields of technologies and innovation, specialists in delivery questions, staff ready to work in foreign countries, and specialists in resolving the legal questions. Kelly Services can be helpful to provide the company with the necessary assistance in finding appropriate candidates and hiring the staff. There is a range of reasons to refer to Kelly Services’ assistance in hiring specialists for Amazon:
The development and implementation of the new delivery system is a difficult process based on using innovative technologies and knowledge in aviation (Gross, 2013). Amazon should hire more specialists in the field of aviation technology, delivery technologies, and aviation consultants.
People specializing in resolving the issues associated with weather problems and drawbacks in the system should be hired to control the work of algorithms and to correct errors.
The project is expected to be developed in several stages. The employees to complete the short-term and long-term tasks can be selected effectively with the help of Kelly Services.
The process of hiring delivery persons from different states of the USA is challenging, and Kelly Services can assist effectively.
Amazon intends to start the use of drones in foreign countries, and Kelly Services’ assistance is necessary to develop the hiring process globally (Gross, 2013).
To resolve the questions with the Federal Aviation Administration, it is necessary to hire consultants in the field to guarantee the start and development of the project.
While developing and implementing the new delivery system based on drone technologies, Amazon should pay attention not only to the expected benefits of the project associated with reducing the delivery time but also to the challenges facing the company today, when it is necessary to realize the intensive hiring procedures to select specialists who can contribute to the project’s development significantly. Kelly Services has great experience in selecting specialists in many fields and according to different requirements.
Conclusion
Professionals of different levels and specialists in various spheres should be hired additionally to contribute to the successful realization of Amazon’s project. As a result, Kelly Services’ assistance can be necessary to organize the hiring process thoroughly, to focus on the company’s requirements, and to expand the hiring activities in foreign countries. That is why, choosing Kelly Services for organizing and completing the hiring process, Amazon can respond to the project’s short-term goals and the company’s long-term goals.
References
Amazon Prime Air. (2013). Web.
Banker, S. (2013). Amazon and drones – Here is why it will work. Forbes, p. 4.
Donici, A., Maha, A., Ignat, I., & Maha, L. (2012). E-Commerce across United States of America: Amazon.com. Economy Transdisciplinarity Cognition, 15(1), 252-258.
Amazon.com, Inc. is a leading multinational technology company based in Seattle, Washington. It was founded in 1994 by Jeff Bezos and focuses on cloud computing, artificial intelligence, and e-commerce. Although it started as an online bookstore, the entity has over the years managed to diversify into selling other products that include software, electronics, furniture, jewelry, food, video games, and toys among others (Foss and Saebi 42).
In addition, Amazon has also succeeded in offering modern-day technological services such as video and MP3 downloads/streaming. Business experts argue that in the contemporary world, very few companies have the ability to match the potential of Amazon with regard to its organizational structure, development strategies, and efficiency of its delivery system (Rossman 19). This has been evidenced in the prolonged success of its diversification program that has allowed it to venture into various fields with ease and success.
Currently, the company owns Amazon Publishing, Amazon Studios, and recently started the production of consumer electronics such as fire tablets and fire TV among others. In the United States, Amazon is the second-largest employer and the most valuable retailer ahead of Walmart in terms of market capitalization (Rossman 19).
History and Development
After its inception in 1994, Amazon went public in 1997 and started selling music and videos a year later. Two years before the turn of the century, the company started its operations in the international market with its first online bookstores opening in Germany and the United Kingdom (Rossman 27). Its good reception as it explored new markets encouraged it to try selling other consumer goods that people might also need but have limited access to.
This led Amazon to start selling software, video games, and an assortment of home-improvement items. In 2002, the business started Amazon Web Services (AWS), a product that aimed at capitalizing on the growing potential of the Internet by providing data on the popularity of websites and Internet traffic patterns to various developers. As the uptake of the Internet across the globe kept growing every year, Amazon found the need to introduce a service that would help markets and developers across the Internet to process and store their data with ease. This led them to introduce Elastic Compute Cloud (EC2) and Simple Storage Service (S3) in 2006.
In an effort to automate the manner in which it managed its inventories, Amazon bought Kiva Systems (now Amazon Robotics) in 2012 (Mwololo 2). Over the years, the company has created numerous partnerships with notable brands in the United States and across the world in an effort to acquire a bigger share of the highly diverse and competitive global market. Some of the notable ones include the controversial ten-year deal signed in 2000 with American toy retailer Toys “R”, 2001 deal with Borders Group, 2011 partnership with DC Comics, 2013 deal with United States Postal Service, 2017 deal with Nike, and a 2018 partnership with Apple Inc. among others.
Organizational Structure
The organizational structure that Amazon has been using over the years can be described as hierarchical. The company’s management team comprises the president, three senior vice presidents, nine directors, a Chief Finance Officer (CFO), and a number of CEOs. The three senior vice presidents are in charge of international retail, corporate development, and technical advisory to Jeff Bezos. CEOs are in charge of web services, worldwide consumer services, and global corporate affairs. Amazon adopted this structure due to the nature of its business and the size of the market it serves. In addition, it serves best for integrating numerous teams within the organization dealing with the various elements that characterize its business model (Mwololo 3).
The senior management team at Amazon is actively engaged in all the decisions made at the company, an element that has helped it to attain and remain in its current top position in the global e-commerce business. As the company’s President and CEO, Jeff Bezos’s main duty is leading and guiding the management team with regard to the company’s strategy for development and increased competition. He works very closely with the vice presidents and the CFO in ensuring timely implementation of strategic plans (Rossman 68).
Reasons for its Success
Business experts argue that one of the main factors behind the prolonged success of Amazon is its organizational structure, as well as corporate culture and values. Amazon believes in the spirit of togetherness, closeness, and teamwork. These values help to give any organization a competitive advantage in the market, which in turn builds a solid foundation for development and prolonged success.
The contemporary business environment is highly diverse and competitive, thus requiring entities to be innovative when it comes to their recruitment strategies and the nature of business models. Amazon’s corporate culture is developed from the values of promoting innovation, diversification, competition and achieving high levels of flexibility (Rossman 89). Technological advancements such as the Internet have created numerous business opportunities, as evidenced in several e-commerce services that Amazon currently offers.
Another major factor that has contributed to the success of Amazon is the visionary and efficient leadership of Jeff Bezos. He has been described as a strategic, aggressive, and forecasted contemporary business leader who is not afraid of venturing into business environments that have not been tested before (Foss and Saebi 88). Reports indicate that Bezos is a strong supporter of the business diversification strategy that the company adopted several years ago.
This strategy has also been widely considered to play a pivotal role in the successful expansion activities that Amazon has undertaken over the years (Rossman 107). Business experts argue that the ability of a business to spread its risks through diversification helps to manage the negative impacts associated with the numerous changes that happen in the external business environment.
Fun Facts and Notable Mentions
Many Amazon customers across the world know very little about their favorite service provider. First, the company was actually created in the home garage of its founder in Bellevue, Washington. According to Bezos, the initial name he had chosen for the company was Cadabra but failed to get the magical feeling he wanted from its sound. The very first book that was sold at Amazon was Fluid Concepts and Creative Analogies authored by Douglas Hofstadter.
An interesting tradition at the company during its infancy days was that a bell would be rung at every purchase made in the office. Reports indicate that in 1997, the company was sued by Barnes & Noble over what they claimed was a slogan that did not depict the reality that the business was experiencing (Foss and Saebi 119). Amazon was accused of stating in its slogan that it was the earth’s largest bookstore yet at the time, it was not the case.
Another interesting fact about Amazon is the fact that a group of employees at the time when the company started experiencing growth worked for a minimum of sixty hours every week. As part of its efforts to help the workplace environment, Amazon uses robots to assist its warehouse workers in retrieving items. Interestingly, employees at Amazon consider their CEO to be a tough boss who will explode at employees anytime he gets substandard work or a report. In 2013, the company is said to have lost over $4 million in less than one hour when its website went down (Rossman 51).
Over the years, Amazon has been actively engaged in lobbying both federal and state governments in the United States on matters relating to the taxation of online sales, intellectual property, as well as the safety and privacy of data transferred through online transactions (Foss and Saebi 120). In addition, the company has been entangled in several controversies that have threatened to compromise its reputation.
Some of the notable controversies have revolved around the issues of environmental impact, the selling of counterfeit items, and income taxes among others. In the recent past, the company has received much backlash from President Donald Trump over the deal that it signed with the United States Postal Services. Amazon has also come under scrutiny over recent comments made by Vermont Senator Bernie Sanders who accused it of poor working conditions and low wages for its employees.
Conclusion
Amazon is a leading global brand that has proven its abilities in dealing with diversification and investing in areas that many businesses are not willing to risk their resources on. Through the leadership of Jeff Bezos, the company has managed to dominate the e-commerce market across the world.
Works Cited
Foss, Nicolai, and Tina Saebi. Business Model Innovation: The Organizational Dimension. Oxford University, 2015.
Mwololo, Harry. Business Model of Amazon. GRIN Publishing, 2018.
Rossman, John. The Amazon Way on IoT: 10 Principles for Every Leader from the World’s Leading Internet of Things Strategies. Clyde Hill Publishing, 2016.
The five essential factors of diversification strategies that determine its further success refer to the availability of workforce, financial capacity, government regulations, availability of resources, and relative attractiveness of the market. Due to the combination of the aforementioned determinants of diversification strategies, the two possible outcomes of the tactics’ implementation can occur. Successful diversification strategies are commonly labeled as related diversification, which takes place when a business moves into a new industry that has significant similarities with the existing firm’s model or its business lines.
While the introduction of strategies aimed at diversification is essential for successful business performance, the steps taken to diversify the corporate environment may not necessarily lead to desirable outcomes. For example, the application of diversification tools at Amazon exemplifies both successful and unsuccessful diversification approaches. Although the decision to enter the digital market has helped to attract the attention of a larger market segment, it has also featured a series of difficulties caused by the necessity to readjust the company’s performance, management, and operations to an entirely new setting with the help of a diversification-performance approach. For example, as the case under analysis mentions, the first stages of diversification and the introduction of the organization to the digital market caused a slight decline in the company’s performance: “Amazon’s performance in the third quarter of 2016, especially in terms of profits, was lower than expected, and this caused its stock price to decrease by 7 per cent” (“Amazon Go: Venturing into traditional retail,” 2017, p. 3).
Predicted Success of Offline Retail Segments
After the initiation of Amazon Go, the first convenience product store without cashiers, Amazon entered the market of offline retail segments. Current revenue reports and technological advancements present in the store signify the high likelihood of future success of the company’s innovation. With the introduction of the offline retail segment, Amazon did not lose its primary characteristics: high accuracy, fast delivery, and convenient payment. The integration of online and offline experiences leaves hope to believe that Amazon Go will become a future model of convenience stores, effectively responding to the customers’ needs and current trends in the industry.
For Amazon to replicate its success in offline segments, the company will need to integrate different types of diversification strategies and adopt a situational approach toward navigating both on- and offline markets. By establishing the strategies geared toward diversification-performance, Amazon will be able to create a competitive advantage as a flexible organization that recognizes the different needs of its online and offline segments. Using the core competence-market matrix, one will realize that Amazon currently defaults on the development of its traditional core competencies in the new offline market. For the organization to succeed, it will need to differentiate between the key characteristics of its online and offline audiences.
Amazon Go’s Competitive Advantage
Though Amazon Go is new to the industry of convenience stores, it has already established a competitive advantage with other similar businesses. Being the first to move customer checkout to the next level by eradicating the need to waste time in queues, Amazon made a series of important actions. The competitive advantage is further sustained because all customers who enter the shop are already known, contactable, and preauthorized. This feature present in Amazon Go enhances the humane relationship between the company and the customer, creating a higher level of commitment for the consumers.
The first-mover advantage that the organization gained due to the unique specifics of its checkout system serves a crucial function in the development of a comprehensive competitive advantage of Amazon in the global market. Due to the implicit connection to its supply chain and the relevant processes, the specified advantage will allow the organization to transition to the offline market without experiencing significant hindrances. The specified approach will help to address the principal-agent problem, which may occur if Amazon starts developing relationships in the offline environment unprepared. However, the first-mover option will help the company to gain experience in balancing relationships with its stakeholders in the offline market. The increased preparedness levels, in turn, will lower the risks that Amazon is likely to encounter in the target context.
Deployment of Amazon Go Globally
Amazon’s offline retail store concept has the potential to be implemented globally. However, the scope of the countries where it might work is limited, as the successful operation of such retail segments depends heavily on the culture. Amazon Go might work in developed countries with individualistic cultures, where the safety level is relatively high; thus, the temptation to steal is relatively low. Meanwhile, the store might experience difficulties if operated in developing countries. Generally speaking, if Amazon Go were to expand globally, the best countries to start with would be Canada, Western Europe, Great Britain, and Australia.
To achieve success on the global scale, Amazon will need to explore the full potential of strategic alliances. The latter is a strong source of power for innovative companies since they help to improve a firm’s supply chain, enter new markets, and attract new audiences. Therefore, Amazon will have to create strategic alliances with other organizations to expand its capabilities and hedge against the uncertainties that new markets create. The latter option is especially important given the company’s lack of experience in navigating the offline market and addressing the needs of offline buyers. For this purpose, Amazon will require establishing alliance governance mechanisms that will lead to greater flexibility in managing decision-making and crucial processes within the supply chain. Thus, joint ventures seem to be the most appropriate form of alliances for Amazon at present due to the need for the company to control critical aspects of its offline performance.
References
Amazon Go: Venturing into traditional retail. (2017). Harvard, MA: Ivey Publishing.
Amazon.com, Inc. is the largest customer-focused online retailer based in Seattle, Washington that was founded in 1994 by Jeff Bezos. The company started as an online bookstore but widened its product base dramatically over the years to incorporate a whole range of products and services from cloud computing services to electronic gadgets to apparel & accessories, and much more. Today, the company operates through its three segments, including North America, International, and Amazon Web Services (AWS), with millions of customers across the globe (Amazon, 2018). The North America segment deals with retail sales of consumer products and subscriptions through North America-focused websites, while the international segment deals with these through internationally-focused websites. Lastly, the AWS segment consists of sales of databases and other related computer services to government agencies and academic institutions. The company has reported tremendous success and gained a strong reputation over the years. In a Harris Poll conducted in 2017, the company was ranked #1 for corporate reputation getting more than 23,000 votes (Farfan, 2018).
Amazon became a public limited company around twenty years ago and is listed on the NASDAQ Stock Exchange under the symbol “AMZN” (Amazon, 2018). The capital structure of the company relies on both debt and equity finances for its expenditures. For debt finance, the company obtains loans from financial institutions such as banks with an agreement to repay them along with the interest charge within a specific time. The loan may be secured or unsecured depending on the terms or conditions of it, and the company has to put its assets as collateral if it is a secured loan. On the contrary, equity financing is referred to the sale of shares of the company to investors to increase the working capital or to finance an acquisition. Thereby, it makes shareholders partial owners of the company. As mentioned before, the company’s stocks are listed and traded on NASDAQ Stock Exchange. However, its shareholders are not limited to individuals as there are many institutional investors presently holding its stocks.
Analysis of the Company’s Stockholder’s Equity
The company has two classes of shares authorized, namely, common stock and preferred stock. Common stocks or ordinary stocks are the most basic type of shares authorized and issued by companies. The number of shares held by a shareholder determines the extent of ownership he/she has in the company (Hartman, 2017). A shareholder with ordinary shares possesses the right to vote on critical matters such as the appointment of auditors of a company in the Annual General Meeting (AGM) and is also entitled to receive dividends or bonus shares when the Board of Directors approves them. On the other hand, preferred stocks carry a higher value than ordinary shares, and the shareholders with preferred stocks are paid a fixed dividend before any payout to ordinary shareholders. Even in the case when a company is making no profit or incurring a loss, shareholders holding preferred stocks receive a dividend payment from the company. However, preferred shares do not confer voting rights in the critical matters of the company to their holders.
It has authorized 500 million preferred shares at $0.01 par value but has not issued any of these shares, and subsequently, there are no outstanding shares of this class. The company has authorized 5,000 million common stock at $0.01 par value. As of December 31, 2017, it had issued 507 million shares with an increase of 7 million shares from the last year-end on December 31, 2016. The number of outstanding shares on December 31, 2016, was 477 million shares, which subsequently increased to 484 million shares and equaled $5 million (Amazon, 2018). The effect of this was the increase in its additional paid-in capital. Outstanding shares are an integral part of shareholders’ equity and are held by its shareholders seeking a regular income in the form of dividends or capital gains from the increase in the stock price. It also includes share blocks that are possessed by institutional investors (non-bank organizations) and confined shares that are allotted to the officers of the company.
The par value of both the common stock and preferred stock is $0.01 (Amazon, 2018). It is the face value of stocks below which they cannot be sold upon initial offering. The purpose of the par value concept is to assure the prospective shareholders of the company that it would not issue shares less than the par value. Moreover, some state laws require a company not to sell its stocks below the par value, and this is the reason for setting a nominal par value ($0.01) of stocks to avoid any legal concerns if its shares start to sell in the penny stock range. A stock certificate of a share of stock carries the amount of par value on its face.
The company has successfully maintained its retained earnings under General Reserve. Retained earnings are that the proportion of the company’s profit that it withholds for financing its future projects and are not used in the payment of dividends to the shareholders. In the case where a company’s Board of Directors approves the payment of dividends to shareholders out of profit, it is likely that its retained earning would be insufficient to finance its capital expenditures. It is regarded as a good practice of a company to maintain sufficient retained earnings, and it also improves its market reputation and removes the need to rely on other sources of finance in times of need.
The retained earnings of the company for the year ended December 31, 2016, was $4,916 million. During the year, the company changed the applied accounting principle related to the stock-based compensation, and the cumulative effect of this change had a positive impact of $687 million on the retained earnings. Moreover, the net income generated from the company’s operations during the accounting year amounted to $3,033 million. With the effect of these two, the retained earnings at the close of the accounting year on December 31, 2017, were $8,636 million (Amazon, 2018). The company can finance its projects itself with this significant holding of retained earnings, and it does not need to approach financial institutions, which would cause the company to incur not only large transaction costs but also pay interest expense.
Treasury stock or reacquired stock refers to the practice when a company itself buys back its already issued stocks from stockholders. With this reacquiring of shares, the number of outstanding shares is reduced, and investors are no longer its shareholders. The effect of reacquiring shares means that the ownership of the company is shared less by external investors, and the possible risk of a takeover from a potential investor is also reduced.
Stock repurchase activity was authorized by the Board of Directors in 2016 to repurchase up to $5.0 billion of the company’s common stock. The company has reacquired its shares worth $1,837 million during the years preceding 2015. However, there is no change in the treasury stock as no such repurchase was made in the last three years (Amazon, 2018).
Total shareholders’ equity of the company as of December 31, 2017, was $27,709 million, with an increase of approximately $8 million from the last year-end on December 31, 2016 (Amazon, 2018). The shareholders’ equity is the net value of the company, which shows the amount that shareholders would get in case of liquidation of the company after all of its debts are repaid. Table 1 provides the details of the shareholders’ equity of Amazon.
Table 1. Shareholders’ Equity. (Amazon, 2018).
($, in millions)
Shareholders’ equity as of December 31, 2016
19,285
The cumulative effect of a change in accounting principle related to stock-based consumption
687
Net Income
3,033
Other Comprehensive Income
501
Exercise of common stock options
1
Stock-based compensation and issuance of employee benefit plan stock
4,202
Shareholders’ equity as of December 31, 2017
27,709
Conclusion
The above analysis of the company’s shareholders’ equity reveals that the company uses a significant proportion of shareholders’ equity to finance its capital expenditures. The different sub-divisions of equity capital, namely, common stocks, preferred stocks, and retained earnings, make the company’s equity capital position strong. The increase in the shareholders’ equity is because of the transfer of the net income of the company during the accounting year to its retained earnings. Furthermore, seven million common shares were issued by the company during the last year that also added to its equity value. The rise in the shareholders’ equity is a good sign as it may indicate that the company’s profit increased, and investors highly regard this fact before they take any decision to invest their wealth.
References
Amazon. (2018). Annual reports, proxies and shareholder letters. Web.