The Advantages and Disadvantages to Ritzer’s Four Dimensions of McDonaldization

The Advantages and Disadvantages to Ritzer’s Four Dimensions of McDonaldization

McDonaldization is a fast growing process being implemented in numerous businesses worldwide. With all business tactics there come pros and cons along with outcomes that were predicted or perhaps not foreseen. In this essay I plan to analyse the advantages and disadvantages to Ritzer’s four dimensions of McDonaldization and respond to his ideas. To begin, I think we should discuss what McDonaldization is.

McDonaldization is commonly understood as “when a society adopts the characteristics of a fast-food restaurant”. The developer of this term, Ritzer (‘The McDonaldization of Society’) claimed there were four dimensions which made up McDonaldization. The four dimensions being efficiency, predictability, calculability, and control.

The first dimension of McDonaldization is efficiency. When practicing efficiency in a McDonaldization society, businesses often focus on minimizing the time required to complete individual tasks. Thus resulting in the entire process to be completed in the quickest way with minimum wasted effort and expense. For companies, this tactic is a benefit by limiting multi-tasking for employees while concurrently limiting errors received by consumers. Consumers also reap the benefits of this tactic as it allows them to feel as if they have more options. In many shopping centers, self-checkouts have become a common way of completing shopping trips. Companies have purchased multiple self-checkout desks, typically eight to ten, and only need one or two employees there to supervise customers as they checkout. As a customer, self checkout is often the quickest option since there are so many checkstands available at the self checkout. For companies its the cheapest option as they have a one time purchase of the computers and then one or two staff members to supervise opposed to paying eight to ten employees to run their own checkstand. Though there appears to be many benefits to efficiency, negative effects do occur as well such as limiting employment and human interaction. In the case of self checkouts, less employment opportunities are available in shopping centers as computers are taking a dominant role in checkouts. Additionally, though it may seem easier to not interact with people while checking out, there are situations, such as wanting to pay with a cashiers check, that a human check out is necessary. That being said, companies often choose the cheaper and more effective option as it seems in best interest for their business.

Moving forward in the dimensions of McDonaldization, the next step is predictability. This step ‘…emphasizes such things as discipline, order, systematization, formalization, routine, consistency, and methodical operation. In such a society, people prefer to know what to expect in most settings and at most times”. Often this is done to allow consumers the comfort of having the same experience despite different location/circumstances. Furthermore it is done by companies to ensure employees can get into a routine of the same tasks and become experts at the one duty assigned. Examples of predictability being put to use could be Starbucks. Starbucks has the same recipe and instructions for their employees to follow to a tee to ensure all the drinks come out tasting the same. So whether you order your iced nonfat caramel latte in Seattle, Washington or Perth, Australia it will come out tasting the same. This benefits Starbucks customers so that they can experience comfort in ordering their drink and perhaps limit the amount of ‘remakes’ the company has to provide for customers. It additionally benefits the company as they can predict and limit the use of extra products being added and used in recipes for drinks. However, predictability has consequences as well. When you travel to a different area, do you want the experience to be the same? If you were to be in England and wanted to embrace new culture but only saw chain restaurants such as McDonalds, KFC, Starbucks and so on, it would hinder your ability to experience new culture. This is one large outcome predictability in companies has made globally.

The third level of McDonaldization is calculability which is when companies organize tasks into easily calculated bits and pieces that can be measured and quantified. When businesses implement calculability into their tactics it makes it easier to measure work output. One company that is known for using this technique is Amazon. Amazon has many warehouses that employ large amounts of people to sort, box and ship products for its customers. With their large amount of demand, Amazon uses the calculability tactic to ensure customers can be offered promotions like one-day shipping to entice them to continue shopping with Amazon. People who are employed by Amazon and put into the task of boxing are given a quota of items they must box per hour. With technology, Amazon counts how many items are boxed by each employee and if they are under quota the employee can risk termination. The advantage to this is that customers receive their purchased items in a timely manner. Additionally, Amazon is getting good labor from their employees in exchange for their hourly rate. Conversely, the disadvantages are that employees are often worked too hard and at times have skipped desires for water or bathroom breaks to avoid being under their quota. Employees being overworked also raises chances of mistakes being made, for example sending the wrong item to a customer. So, as we take in the pros and cons of calculability, it is understandable to see how companies would want to use it despite it not always being the best option for all parties involved.

Finally, we reach the last dimension of McDonaldization, control. This tactic focuses on making tasks repetitive and forcing employees not to think. By creating a monotonous work environment and forcing employees not to think, employers can maintain a tighter control over them. Ritzer specifically focused this idea “on control through the substitution of non-human for human technology”. We see this technique being used everyday, all around us. From the ‘popcorn’ button on our microwaves to the cruise control in our cars, companies frequently implement control by using technology. By doing so, consumers can complete tasks easier as technology does a lot of the work for us, all while it provides a reassurance of infallibility. Using GPS as an example, people can plug in the address they want to go to then simply follow the instructions to arrive at their desired location. However, this has a negative impact as well. As people become more reliant on GPS, they become less educated on how to find their way there on their own. This means that “Google Maps” for instance now has significant control of all the people using their app.

Benefits of Amazon’s Company

Benefits of Amazon’s Company

Introduction

Amazon is the brainchild of Jeff Bezos. It was founded in July 1994. Its headquarters are based in Seattle. The funding of the company was done by his friends and family. In the beginning, it was only an online Bookstore. Currently it sells a plethora of products ranging from cosmetics, tech gadgets, clothing and toys. Over the years, it has become a global enterprise. The company’s revenue touched $233 billion by 2018. Amazon only took twenty years to reach $100 billion revenue mark, faster than any other company. During the late 90’s it opened its offices in United Kingdom and Germany as well. The company’s journey from being simply an online bookstore to a renowned e-commerce website is an inspiration for others to follow. Back in those days, online shopping was a dream. Jeff Bezos presented a revolutionary idea and over the years, the company has seen exponential growth. Jeff Bezos, the current CEO of Amazon considered selling books online was appealing and easy to ship. The company owes it success to extensive research and development. Alexa, Prime Music, and Amazon GO are some of the greatest innovations that signifies the business growth (Welch, 2015). One of the trendiest things on the website these days is the Kindle. It is a cheap e book reader which will give access to almost a million e-books in the Amazon Kindle store.

The leadership of the company consists of Jeff Bezos who is the CEO and nine directors. They are involved in decision making to ensure the smooth flow of operations. New ideas are also pitched when required. They are further subdivided into chief finance officer, chief technology officer etc. There are three other offices in China Europe and India under international retails office to serve the local population of that areas. These locations are mostly chosen because of the consumer spending in these countries and the population. The management of the company ensures the smooth flow of operations.

From a customer placing an order to the final point of delivery the product passes through various stages. Fulfillment centers is the beginning of processing. Tractors are used to carry the products and further moved by conveyor belts. The product is stored with millions of other things. It is then moved to an associate who picks it with robots. Afterwards, for packing, it is moved along the belt. Later on, the product is scanned by the computer and it is weighed to ensure that it is correct. After labelling, based on the location of the product, it is sent to a trailer.

Trailer trucks carry the products to sortation centers. Location and delivery speed are the criteria for distributing the products. The orders are then taken by different carriers like UPS, FedEx and DHL and delivered to the customers.

The company’s strategy is to value the customer. The website uses a strategy known as customer tracking. When the website is visited by the customer, cookies are saved which makes the shopping experience really user friendly. Recommendations are shown to the customer based on past purchases. Amazon also provides customer support. It is usually carried by emails or live chat. The customer representatives provide services in different languages which is its key asset. All the employees in the company have a clear understanding of the product and they know the knitty gritty of it. This way the customer satisfaction is maintained. The department of development has highly trained and skilled experts, Amazon has a clear idea of the demand of the suppliers. This gives it a competitive edge over other companies. With the boom of the fourth industrial revolution, more and more firms are finding their place in the e-commerce industry. Amazon outsmarts them by focusing on customer service innovation by using top of the line technology to improve customer experience and retain their loyal customers. Amazon uses the latest technology to keep up with rivals like eBay and Alibaba. It uses state of the art methods to maintain its dominance over its competitors in the e-commerce industry.

Linux is used to run Amazon. It consists of huge databases ranging to almost 24 terabytes. Hewlett Packard servers are used to power the warehouses. Netscape Secure Commerce Server is used by Amazon. This makes the credit card numbers secure because they are stored in a different database which restricts the internet access and the possible chance of hacking. Information like name, location and gender is also coded or encrypted. This gives confidence to the buyers as most of them are skeptical of buying things online because of possible chances of fraud or mishandling of personal information. Amazon makes sure that each and every customer’s data is protected.

In the present era, Amazon is the front runner in the e commerce industry. Amazon prime service was launched by it in 2005. The customers were guaranteed two-day shipping if they paid the annual membership fee. It has established its dominance in the online retail industry. When other companies followed this strategy, Amazon upped the ante by offering even a quicker service that is delivery received within one hour by Amazon prime now service. Prime delivery, one-day delivery, first-class delivery are the new features which are also now provided by the company. This way the preferences of different customers are met which sets apart amazon from other companies. Top notch information technology, superb warehouses and flawless transportation makes it the leading company today.

Amazon procured robotic warehouse solutions known as Kiva systems was procured by in 2012. Manual help is not required for the robots to pack up or pick anything. Currently, Amazon also manufactures Bluetooth speakers, batteries and many more. Portable storage units are used to store items. After that when the Kiva database system receives an order the closest robot is located by the software to get the item. Computerized bar code stickers are displayed on the floor which are followed by the robots to navigate around the warehouse. The robots also have built in sensors to avoid collision. Expanding its horizons further, Amazon has also set foot in the artificial Intelligence industry. It developed a product called Alexa. It is a virtual assistant technology like Siri and Cortana. It is able to perform tasks like streaming audiobooks or using itself as a home automation system. The A9 search engine is funded by Amazon and has all the capabilities ranging from pop up blocking to search history, bookmarks etc.

Lastly, Amazon has stepped up in other avenues beyond commerce. It has started a project known as Mechanical Turk. With this system, software developers can post tasks with which they need assistance like captioning of photos and or other small manual tasks. A person who completes the task gets a small amount of money and Amazon gets a commission when the transaction is completed. Other small tasks like data entry or designing a logo are also performed manually. The workers are usually called crowd workers or Turkers. The hours are set by the workers themselves because they are not under any obligation. Most of the workers earn around one dollar an hour.

What sets Amazon apart from other companies is its information technology system. The behavior of consumer is recorded, this way Amazon increased its sales by only making recommended products that were according to the preference of the customer. Furthermore, software engineers are continuously trained to improve the website and add innovative features to it. Though the company has its weakness. It is dependent on external contractors for the shipment of products. In this case, the company suffers millions of dollars per year and the profitability is reduced.

E-commerce has changed the dynamics of business. The usage of online shopping has increased rapidly in the past few years. As technology is experiencing changes every other year, there is always room for improvement. Developing countries are also aiming to improve their businesses by empowering enterprises to start e-commerce. With the advent of Artificial intelligence, huge amounts of data are collected about the customers. This allows the companies to know about the preferences of the customers. This in turn increases the profit and productivity of the stores as only recommended products are manufactured.

References

  1. Julia Layton. [ 2006, January 25]. How Amazon Works. Retrieved from https://money.howstuffworks.com/amazon3.htm
  2. Rick Leblanc. [2019, October 15]. How Amazon is Changing Supply Chain Management. Retrieved from https://www.thebalancesmb.com/how-amazon-is-changing-supply-chain-management-4155324

Amazon’s Key Principles for Success

Amazon’s Key Principles for Success

Jeff Bezos, the founder of Amazon, got the idea to start the internet enterprise Amazon in 1994 after he began to see the internet revolution take place (Entrepreneur.com, 2008). He instantly recognized the extensive possibilities of selling products online and set up his own internet business in the garage of his home (Entrepreneur.com, 2008). During an interview at the George W. Bush Presidential Center’s Forum on Leadership, Bezos credits four principles for Amazon’s success along with his day one mantra (Tabaka, 2019). According to Bezos, ‘Day one’ means that Amazon will always act like a startup company that requires employees to practice these four principles: customer obsession, eagerness to invent, long-term thinking, and operational excellence (Tabaka, 2019).

Four Key Principles

Listed first as the most important of the four principles is customer obsession. Customer obsession merely means customers are number one. Amazon lives up to this principle by knowing the wants and needs of their customers. They do this by collecting data, imaging what customers want, and giving it to them. Amazon does this all while keeping prices low, making deliveries fast, and having a vast selection of products. However, this is not to be confused with competitor obsession, where you are more concerned with competition than your customers’ needs and wants. Bezos stated that if you are competitor obsessed, then you wait around until there is a competitor to do something (Tabaka, 2019). Being customer-obsessed, on the other hand, allows innovativeness because companies will always be looking for new ways to satisfy consumers regardless of what the competition is doing (Tabaka, 2019).

The next principle is Amazon’s eagerness to please its customers, which goes together with customer obsession. According to Bezos, customers are always unsatisfied, even though they think they are happy (Woods, 2017). Amazon continues to be different and unique, all while giving the consumer something that they will like (Tabaka, 2019). Customers are not responsible for designing and inventing the things they want. Amazon’s obsession with their customers allows them to listen to feedback and create on their behalf (Wood, 2017). This principle is not only making those employed at Amazon inventors but also pioneers for the people.

The third key to Amazon’s list of principles is long-term thinking. With this principle, Bezos encourages his employees to think in 5-7-year timeframes instead of 2-3. This principle gives Amazon the upper hand because most companies seem to operate on a 2-3-year timetable, which means more competition. However, Amazon only competes against a fraction of competitors this way (Stewart, 2011). Not only that, Amazon benefits in two significant ways: they enjoy the kind of economies of scale enjoyed by Wal-Mart as well as eliminating or weakening competitors (Stewart, 2017). In return, Amazon can continue to dominate the e-commerce arena.

Lastly, is operational excellence, which means that Amazon standards are high. Their systems are well thought out, tested, and updated periodically (Tabaka, 2019). According to Smartsheet.com, operational excellence is a framework for businesses to concentrate on growth and strategies better than their competitors. This principle allows Amazon to detect problems that may arise in the beginning and correct them before any crucial dilemmas surface (Tabaka, 2019). Systemization for Amazon saves them time, money, and, ultimately, its reputation (Tabaka, 2019). Operational excellence enables Amazon to do more through better employee interaction and streamline processes. By not having a process or system in place, the more difficult changes will become, and the slower training will be for new employees.

Other strategies used by Amazon to boost the success include having high standards, setting clear and realistic expectations, and staying involved with the people you serve. Bezos states that high standards are contagious and that if you operate with high standards, new employees will be able to adapt quickly (Field, 2018). The same goes for companies that work with low standards. Employees will operate in the same manner without even knowing (Field, 2018). Not only does Amazon run on high standards, but they also set clear and realistic expectations for its team and how much work it will take for them to achieve the level of quality that they have been delivering the last 26 years (Field, 2018).

Most importantly, is staying in touch with customers. Regardless of what you are selling, it is a good idea to never lose touch with the people in which you serve. Bezos states that he still reads emails from his public-inbox to stay in touch with his customers (Field, 2018). He believes that staying more focused on customers and what they have to say is way more important than focusing on what the competition is doing. Listening to customer feedback and comparing it with data allows Amazon to see where the two misalign (Field, 2018e). ‘When the anecdote and the data disagree, the anecdotes are usually right”, states Bezos (Field, 2018).

Even with all their success Amazon still had their share of missteps. For instance, their expensive Fire phone that flopped and the controversy surrounding its Echo device and Alexa Al assistant (Shulevitz, 2018). Customers believe that the company was invading their privacy, and Alexa was recording private conversations as it did with one family without them instructing Alexa to do so (Shulevitz, 2018). Other than those missteps, Amazon has proven to be a powerhouse.

Conclusion

Jeff Bezos took those four fundamental principles and created an internet company that was able to satisfy the wants and needs of customers by being obsessed with them. Amazon has also been able to take that same customer obsession and eagerly invent products and services for customers way before they even know what they want. For instance, the prime membership, who Bezos said customers never asked for but now love (Field, 2018). The framework of Amazon’s business plan has allowed them to work and operate on a 5-7-year timeframe that puts them on the same scale as Wal-Mart, all while continuing to put their customers first. Last, they have high standards and operational excellence, which allows them to see problems right off and correct them. All of this is done by interacting with their employees and listening to their feedback. Despite Amazon’s missteps, the company itself and those responsible for its success are innovators and pioneers creating for the future.

Is Amazon a Monopoly? Essay

Is Amazon a Monopoly? Essay

Amazon is among the four great Big Tech companies dominating market. In recent years, these Big Tech companies have garnered scrutiny at home and abroad. Google ran afoul with the European Union resulting in $9 billon dollars in fines. Facebook has received criticism for failing to address fake news story on its platform. These two giants while increasingly powerful deal primarily in the digital realm with a few exceptions. The company Amazon excels in both the digital and physical markets. Amazon’s growing power has drawn the ire of journals and politicians alike. Amazon currently stands outside the standard definition of a monopoly, but this definition proves to be inefficient in addressing current concerns. In this essay the following topics will be used to support the thesis. First, Amazon’s undercutting of competitors and the power of its platform. Then the impact of Amazon’s acquisitions on various industries. Concluding with classification of Amazon as a monopoly and the risk of it gaining a new kind of monopoly. These points will be used to support the thesis: Amazon has potential to become a dangerous monopoly unlike those seen in the past. Government intervention by reclassification of a monopoly can halt Amazon’s advance.

By undercutting the competition Amazon prevents fair competition. Achieving a monopoly in a market is no easy task. The first step is edging out the competition. On its online retail platform, Amazon lists more than 330 million products not including items they produce themselves under the Amazon Basics brand (Duhigg, 11). Theses third party sellers pay fees to Amazon for housing inventory and logistics purposes. By using the platform these businesses face competition with counterfeiters and Amazon itself. Using collected consumer data, Amazon can create imitations of best-selling items and sell them at a reduced price (Duhigg, 22). Despite Amazon’s efforts counterfeiters and foreign sellers have placed on the platform thousands of unsafe, deceptively labeled or federally banned items according to the Wall Street Journal. Journalist Lina Khan argues that Amazon has an inherent advantage that undermines fair competition when it competes against other sellers and owns the platform where the deals are done (Streitfeld, 6). With a customer base of millions combined with the ability to forgo profits to undercut prices Amazon forces small business owners in a difficult situation. Either play by their rules or risk being left in the dust.

Through corporate acquisition Amazon has been able to expand its business in diverse markets. In 2017, Amazon purchased the supermarket chain Whole Foods for $14 billon cementing their place in physical retail. The merger concerned some like Rep. David Cicilline of Rhode Island but failed to spark wider outrage. Amazon’s expansion into brick-and-mortar includes Amazon Books. By providing books at a discount Amazon had disrupted the business model in publishing. A failure to cross-subsidize in response to Amazon had resulted in consolidation among book publishers. John Stuart Mill speaks on natural and artificial monopolies with “All the natural monopolies (meaning thereby those which are created by circumstances, and not by law)” (Boardman, 292). Through acquisition Amazon seeks to create a natural monopoly while still avoiding an artificial monopoly imposed by the government by sustaining losses and investing at the expense of profits (Meyer). Another part of keeping out of the government’s sights is Amazon’s strategy on federal taxes. By paying employees in stocks and research and development credits they receive more than 1.1 billion in tax breaks. instead of traditional wages they are able to receive a 1.1 billion deduction. Financial filings report Amazon paid nearly zero U.S. federal income tax in 2018 (Duhigg, 29). Aggressive acquisition is a common character of a monopoly as is structural dominance which Amazon is growing close to achieving

By current standards Amazon isn’t classified as a monopoly but these standards can be updated. Monopolies have been around as long as men wished to amass wealth. Aristotle wrote of a man in Sicily, who “bought up all the iron from the iron mines, when merchants came to buy iron, he was the only seller and without much increasing the price he gained 200%” (Boardman, 89). The United States Department of Justice, reports that a market share of greater than 50% has been necessary for courts to find the existence of monopoly power. Amazon is projected to control only 10% of all retail sales in the U.S. far below the standard (Sizemore). These numbers fail to account for the part Amazon plays in many industries. Unlike previous monopolies like Standard Oil who controlled 90% of oil production when it was dismembered by the Supreme Court (Ladd), Amazon has its finger in many pies. Through the subscription service Amazon Prime they are able to compete with major streaming services Netflick and Hulu. They provide cloud computing and web services. With Amazon Music they can stand toe to toe with iTunes and Spotify. Alexa, the virtual assistant bundled in Echo smart speaker rivals Microsoft’s Cortana and Apple’s own Siri. No other tech company comes close to all the services Amazon can provide. Amazon may still be behind in the retail front by being the seventh-largest retailer in the U.S. They make up for it with online presence, 44 cents of every dollar Americans spend online goes to Amazon. The nearest online competitive, Ebay is only six cents of every dollar (Meyer). Under the current measure of the law Amazon cannot be considered a monopoly. With growing support for new antitrust legislation, it’s possible for the government to reinterpret legal precedents regarding monopolies. Politicians from both sides of the isle have set their sights on Amazon and its practices. With its size and reach in the market no current corporation can rival Amazon but the federal government has corrected the market before.

Amazon has potential to gain a monopoly different from the traditional definition. The evolution of technology and market elements indicates a need for the classification of a monopoly to be changed to reflect current trends. In owning the platform that many of its competitors are compelled to use to make a profit as well as selling on that same platform Amazon has an inherent advantage. By failing to remove counterfeiters on its platform they further handicap their competitors and put the safety of consumers at risk. Through acquisition of an array of different companies spanning multiple industries, Amazon obtains more control of its supply line. Rival companies are forced to consolidate product inventory to compete with Amazon price cuts creating fewer diverse options for consumers. Using strategies including paying employees in stock and inflating losses through development Amazon is able to avoid paying U.S federal income tax. Amazon’s control of just 10% of retail sales in the US doesn’t take into account the control it sustains in other industries. For every dollar Americans spend online 44 cents of that dollar goes to Amazon with the closest competitor far from close. With a massive selection of products spanning multiple industries, they’re able to compete on a level unlike any company before them.

Amazon Competitive Advantage

Amazon Competitive Advantage

Strength and growth come only through continuous effort and struggle – Napoleon Hill.

Amazon being a giant eCommerce company has now become every internet businesses’ icon and inspiration. The company which was founded by Jeff Bezos in the year 1994, have gone through continuous innovation and multiple investments that led to the company’s success in today’s global setting. In the assessment of Amazon’s profile and company background, the company appears to have a really strong and sustainable overall competitive advantage above any other online competitors.

In the assessment through the VRIO analysis (Barney, 1991), the organisational resources and capabilities of Amazon indicate a sustainable competitive advantage. One of these capabilities is in terms of market capitalisation that led Amazon to become one of the recognised valuable businesses in the world. In the attempt of the company to expand and diversify its product categories, Amazon numerous investment decision and acquisition of big to growing companies created a strong barrier to other online businesses that are also difficult to imitate as it was accumulated over time.

Another compelling capability of Amazon is the affiliate networks of the company. Through these networks, like Amazon Associates, it did not just drive traffic and boost the marketing aspect of the company but also contributes a lot in terms of profitability. Currently, a trend of using different social platforms linking the website has increasingly provided incentives to different groups of affiliates which in return gives greater scope for the company.

The company’s brand image and high equity in the global market is another capability that made it to the top. If we are to measure the brand equity of Amazon through Brand Insistence (Daye, 2019), the company created a strong awareness, emotional connection, relevant differentiation, accessibility and value to customers that built a foundation for the company’s attractive image. In regards to accessibility, the system of one-click shop 24/7 access and the introduction of the fulfillment by amazon (FBA) made it easier for customers and Amazon users or retailers to transact and do business. The brand equity they developed has strong competitive advantage that cannot be replaced at any time, especially in the field of the online retail market.

The utilisation of artificial intelligence (AI) in the whole process of doing business also created a sustainable competitive advantage as a huge amount of investment is required to acquire these technologies. Amazon became an AI powerhouse, from the robots being used in the warehouses to the sensors that were used in the Amazon physical stores (Amazon Go Convenience Store) where they embedded the concept of Just Walk Out shopping.

In the assessment of competitive advantage using Porter’s approach (Harvard Business Review, 2019), one of the prominent strategies that Amazon uses is cost leadership. We can see in detail through history and timeline, how the company tried to reduce all operational costs. The company invested in technologies that will not only do good for short term use but for long term purposes that were accumulated and used up to this date. The automation of processes and reduction of the four intermediaries which were the agents, publishers, distributors, and wholesalers allowed the company to offer their product and services at a lesser cost.

Growth strategies such as market development, market penetration, product development, and diversification contributed to the competitive advantage of Amazon. Drawing back to the company’s history, the company did not just settle in the US but also entered new markets such as the UK, China, India and recently here in Australia. The business also took advantage of the heightened consumerism and used multiple marketing campaigns to drive traffic. The adaptation of the company to the rapid change in online marketing and usage of all these growth strategies made Amazon one of the greatest pioneers of eCommerce.

Moving on to five forces analysis (Harvard Business Review, 2019), Amazon has a moderate to strong forces beginning with the competitive rivalry. The competition indicates a strong force due to the high aggressiveness of firms and the availability of different substitutes. The presence of Walmart and Best Buy, eBay and Flipkart in India creates a high competition and substitute. Apart from these factors is the low switching cost that imposes a strong force on Amazon as it has less barriers when transferring to another retailer. The bargaining power of suppliers is low especially that the gap between the suppliers as compared to the size Amazon is really high with low force of forwarding integration. The small numbers of supplier can be strong in the sense that changes in prices can directly impact the product cost.

In the bargaining power of customers, it is moderately high as the availability of other options like retail stores is still very common despite the growth of online shopping. Also, relevant information regarding a product is easily available online where customers can easily compare and decide where to order. The threat of substitute, on the other hand, has a strong force given that there are possible substitute and switching cost is low. Lastly, the threat of entry is the least or weakest force due to high economies of scale and cost of brand development.

In regards to the Blue Ocean Strategy (Kim and Mauborgne, 2005), where the demand is generated rather than competing with the existing ones. Amazon built a continuous strategy of creating and implementing its own Blue Ocean, such as Drone Delivery, Amazon Prime, Hour-delivery, Kindle solutions and many more. The main element of competitive advantage of Amazon is that it provides a great customer service experience, such as easy to operate, fast online order, smooth checkout, and stress-free returns. These factors made Amazon unique and have a competitive difference among all other competitors. The company deploys its strategy with the initial step which was to reduce the cost of products for a better customer experience that would attract the customer towards them. It has been perceived that Amazon uses the lower price differentiation in every product and services they offer. This is what makes it very difficult to compete and hence give Amazon competitive.

The Critical Look at eBay Politics Through Comparison with Amazon

The Critical Look at eBay Politics Through Comparison with Amazon

Ebay made its debut in the late 90’s positioning itself to satisfy a consumer trend. Like many successful businesses, they focused heavily on the interests of their consumers. In the mid 90’s there was a stuffed animal called Beanie Babies, each had a cute name and biographical tags, telling you everything you needed to know about that inanimate stuffy. Up until this point there was only a website called “Ty”, which contained an online trading post where people could trade Beanie Babies, but the site was unorganized and unsecure for collectors. Can you guess where I’m going? Insert Ebay, Ebay facilitated and connected buyers and sellers, allowing the safe transaction of all types of collectables, including Beanie Babies.

Ebay was one of the first of its kind immerging out of the dot com bubble, a now multinational e-commerce company based in San Jose, California, facilitates the sale of consumer and business goods. Ebay’s growth numbers were organically forming, but eventually topped out because of customer purchasing processes, policies, security, and the lack intuitive navigation on their site. Firstly, their platform isn’t aesthetically, cohesive or fluid, and in turn doesn’t appeal to many people. This could be why their activity has been decreasing year over year. “During its most recent quarter, Ebay’s gross merchandise volume (GMV) decreased 4% YoY, making it the fourth consecutive quarter of negative growth” (Keyes). Ebay’s auction style platform, is currently showing its age, and has been for quite some time. This caused loss of consumer appeal and tarnished their image, which they need to start showing growth. “Ebay’s unique auction style platform is less preferable as 70% of items sold are through fixed sale prices”(Devin). Fast-forward a few years, and this puts Ebay in a tough spot, either compete with other online retailers directly or continue their old business model in a much smaller marketplace. Neither are preferable but I think the latter is more realistic, as Ebay doesn’t have the leverage it once did.

Ebay is looking for growth, but I think it’s time for them to slow their roll and focus on their core competencies and what makes them unique. Regardless Ebay needs to do something because they have great tailwinds, with e-commerce sales rising 12% YoY in 2018, there is no excuse for under performance. Although not everyone is a collector, or bargain shopper, Ebay is a far way away from being able to compete with other e-commerce sites such as Amazon. I also understand Ebay needs to post growth for investors, but what ends up happening is Ebay speaks empty words, where they over promise and under deliver. Ebay needs to change their consumers’ minds first, and up until this point hasn’t been able to.

Ebay’s policies weren’t helping put people’s minds to ease, they hemorrhaged their sellers, and created a lot of negative publicity. Ebay’s policy had become such that, sellers couldn’t make money on their site anymore, at least not small individual sellers. This was detrimental to Ebay because that’s how they differentiated themselves, catering towards individual sellers. Ebays policies have left many sellers frustrated. “I have decided to stop selling on Ebay completely. I am dealing with a deceptive buyer and have a feeling that Ebay is going to decide in their favor (as usual)” (Tims). This quote depicts one of many frustrated customers, who feel their best interest aren’t top priority. You can’t have a platform based on buying and selling and not support both sides of the transaction.

The second fault of Ebay is to focus on fixed sales, with staticpricing, this is the exact opposite direction, and against what differentiated them in the first place. Instead of playing to their strengths, which is bargain seekers, collectors, and items you can’t find on other sites. ‘We’re testing a new user to Ebay when they show up, we only show them fixed price, brand new items from top-rated sellers. It’s a more familiar commerce experience” (Donahoe). As evidence by the above quote, Ebay plans its growth through at least partially conformity and homogenous design to other e-commerce sites. Ebay seems aware of their duties and what must be done to win back their customer base: “We are fiercely loyal in protecting Ebay’s unique advantage as a true marketplace in service of small independent businesses, consumer sellers, and buyers, and working to dramatically simplify the buyer and seller experience” (Wenig). The problem with this statement is that their actions aren’t reflecting what they’re saying, none of these problems have been addressed adequately. The aesthetics and design of their website is bland and convoluted, and not cohesive in Ebay’s mission statement. Ebay isn’t doomed and was never doomed, but they must play to their strengths, and provide supportive policies to incentivize and give security to their customers.

Security is a huge problem when you look at Ebay, yes, they acquired PayPal, which had a tagline “The Safer, Easier Way to Pay.” Which validates speculation that security is a huge deal to the image of Ebay and ultimately their customers. With PayPal they have tried to alleviate the image and market the company as a “safe” place to shop. But once again Ebay falls short, and as the expression goes, “actions speak louder than words”, and negativity bias comes in strongly online.

Amazon is a great example of company policy that supports the consumer, albeit still a little buyer biased. Amazon swept in with superior delivery, a simplified transaction process, and better customer support systems, which allowed them to take advantage of Ebay’s mishaps. Amazon created a platform that listened to all the customers’ needs from Ebay, and in general online purchases and revolved a business around that. When Ebay was complacent, it gave enough space for other companies to remedy these problems. The space Amazon took from Ebay was the demographic Ebay had been targeting and projecting most of its growth from. Amazon and other retailers did exactly what was needed to obtain the market Ebay was after. Another aspect that helped Amazon is their distribution channels, they built distribution centers, partnered with FedEx and UPS, in order to fulfill orders. They created a much larger demand for online purchases because of their ease of use and customer service. Amazon has become the Ebay and Ebay has become the “Ty” network for beanie babies. Amazon has rectified all the problems average shoppers have with Ebay. Ebay on the other hand, has stood still and is now retroactively trying to play catch up with big companies who have much more leverage.

When comparing Amazon to Ebay on aesthetics and design of their websites, what is immediately clear is Ebay’s “colorful” image is not being represented. The website doesn’t draw me in and doesn’t capture my attention, in other words it isn’t very engaging. Amazon on the other hand has color and soft edged images, with a plethora of interesting items and services all accessible from the home page.

Amazon has created a reputation best expressed by “the customer is always right”, this is evident on every facet of communication to the consumer. For example, having a problem with an order on Amazon is a completely different issue than one on Ebay. Ebay people wait months for refunds if they ever come, with little to no support, Amazon purchases are a no brainer. People will pay the extra dollars to buy on Amazon, just because of their customer service, remember Costco? They too benefited from consumer policies that support the customer, and with that un hindering support the customer will make more purchases and loyalty, trust and security will be built.

Amazons extensive investment toward faster shipping has created an almost addicting instantaneous item arriving at your door. If you can wait one day for an item, Amazon provides a convenience unrivaled. Amazon realized shipping times were one reason consumers wouldn’t order online, and invested heavily, creating a surplus of value to their customers. This is just another way Amazon has invested heavily in a customer supported plan, where Ebay hasn’t, this is the differentiator. Set up your credit card and click purchase, Amazon has perfected their purchasing process, and created one of the best purchasing processes. Ebay on the other hand suffers from “pending purchases” which means people “cart” items but don’t follow through with the purchase. There is something to be said about taking as much of the monotony out of purchasing and letting there be as little resistance as possible in the decision-making process. With so much competition the bar has been raised so high for quality service, even with decent service it doesn’t convince the average person to use Ebay, over Amazon, at least for everyday purchases.

Ebay cannot focus on the everyday person, until they address their policies, processes, and renew their image. If Ebay wanted to stay on top they would have had to actively listened to their customers, had more vision, and positioned themselves in their customers eyes as the desired set.

Works Cited

  1. “Ebay Is Dead and Failing Miserably According to Business Week.” Registered Nurse RN, Business Week, 15 Mar. 2017, www.registerednursern.com/Ebay-is-dead-no-longer-good-for-selling-nursing-items/.
  2. Keyes, Daniel. “Ebay’s Marketplace Growth Plunged into the Negatives in Q1.” Business Insider, Business Insider, 25 Apr. 2019, www.businessinsider.com/Ebay-q1-marketplace-growth-plunged-2019-4.
  3. Motley Fool Transcribers. “Ebay Inc (EBAY) Q2 2019 Earnings Call Transcript.” The Motley Fool, The Motley Fool, 18 July 2019, www.fool.com/earnings/call-transcripts/2019/07/17/Ebay-inc-Ebay-q2-2019-earnings-call-transcript.aspx.
  4. Purdy, Chase. “How Amazon Is Secretly Building Its Superfast Delivery Empire.” Quartz, Quartz, 11 Mar. 2016, qz.com/636404/how-Amazon-is-secretly-building-its-superfast-delivery-empire/.
  5. Steiner, Ina. “Who Is Ebay’s Target Customer?” EcommerceBytes, www.ecommercebytes.com/C/blog/blog.pl%2Fpl%2F2014%2F10%2F1414010502.htm
  6. “Sucess Story: PayPal – Customer Experience.” Genesys, www.genesys.com/customer-stories/paypal.
  7. Tims, Anna. “Ebay Accused of Failing Its Sellers as Fraudulent Buyers Manipulate the System.” The Guardian, Guardian News and Media, 21 May 2017, www.theguardian.com/money/2017/may/21/Ebay-accused-failing-sellers-buyers-manipulate-system-protection.
  8. Wenig, Donahoe, Devin N. “Financials 2018 Annual Report.” Ebay Annual Report 2018, Ebay, 2018,Ebay.q4cdn.com/610426115/files/doc_financials/financials/2018/annual/2018_Ebay_Annual_Report.pdf.

Service Positioning of Amazon and Flipkart: Comparative Analysis

Service Positioning of Amazon and Flipkart: Comparative Analysis

Service positioning is a unique identity of a service in competitive market. Positioning is concerned with the identification, development and communication of a differentiated advantage which makes the organization’s products and service perceived as superior and distinctive to those of its competitors in the mind of its target customers. Positioning a service is difficult as compared to products based on its key characteristic: intangibility; degree of variability or heterogeneity of quality; inseparability.

Service positioning involves following steps: 1) determining the levels of positioning; 2) identification of attributes; 3) location of attributes on a positioning map; 4) evaluating position option; 5) implementing positioning.

Importance of positioning:

  • To make entire organization market-oriented;
  • To cope with market changes;
  • To meet expectations of buyers;
  • To promote consumer goodwill and loyalty;
  • To design promotional strategy;
  • To attract different type of customers;
  • To introduce new product successfully;
  • To face competition;
  • To communicate new and varied features added later on.

There are variety of ways through which positioning can be done. Some of ways are discussed below:

  1. Positioning by features. It is based on single feature or attribute of service. If the product has some unique feature or attribute a company may go with this.
  2. Positioning by compariso. In this service is positioned against the competitors. Under this the service is compared with a competitor and tried to show that the service rendered is better than the competitor.
  3. Positioning through guarantees. In this the company providing service try to give the some incentive like: Money back, Return with no questions , Exchange offers within time period etc.
  4. Positioning through smart taglines. Under this the company tries to use attractive taglines to pull the attention of the consumers. For example: Paytm ‘Paytm karo’.
  5. Positioning through price & quality. This is associated with the price and quality of the service provided. Under this company compares price and the quality provided by the competitors.
  6. Positioning map. Positioning map is also known as ‘Perceptual map’. It is used to show consumer perception of certain brands. It allows you to identify how competitors are positioned relative to you and to identify the opportunities in the market.

Amazon

Amazon is an American multinational company founded by Jeff Bezos in the year 1994. It mainly focuses on e-commerce, digital music, digital streaming, artificial intelligence etc. It is world’s largest online marketplace. Amazon is the second largest online retailer in India with 31.2% of market share after Flipkart which have 31.9% of market share. Mission: “To be earth’s most customer centric company where customer can find and discover anything they want to buy online, and offers its customers lowest possible price”.

Service Positioning Used by Amazon

  • Multi-segment positioning. Amazon offers a wide range of products and services in more than one segment at same time. Specifically, the online retail giant sells almost 120 million products, appealing to the needs and desires of a wide range of customers in different segments.
  • Adaptive positioning. The online retail giant accurately changes in external marketplace and addresses increasing customer expectations by periodically repositioning of its products and services according to changes in the segment.
  • Anticipatory positioning. This refers to positioning to a market segment that has low turnover with the anticipation that the turnover will increase in near future. By doing proper research and analysis they anticipate the growth of near future and position their products and services.
  • Positioning by smart taglines. Under this the online giant positions its products and services in the market by using smart, innovative, & emotional taglines which directly connects to the customers. They used tagline like “Aapki Ki Apni Dukan” which connected really well with the customers.
  • Positioning through sale offers. This online giant provides various sales offers to its customers by organizing flat offers, festival sale, etc. They also provide special benefits to its premium customers by offering them early excess to the offers. They also provide cashback offers in some products.

Analysis of Amazon’s Service Positioning

Amazon has successfully positioned itself as a Glocal (Go Global Act Local) e-commerce giant where one can buy anything and get it delivered at any remote locations. Using the taglines like ‘#Aapki Apni Dukan’ , ‘#Ab Khushiyon Ke Beech Budget Na Aayega’, ‘#Aur Dikhao’ etc. it has helped in carving different/distinct space in consumer’s mind.

Amazon has also achieved economies of scale through extensive product offering which include electronics, toys and games, apparels, DIY and many more. This offering helps Amazon to keep its prices low thereon passing on the benefits to the customer’s.

Amazon also provides its premium customers with its ‘Prime Membership” under which they provide them with early and easy access to its products and services. They also provide them with quick and fast delivery of their products and services. This system has also helped them to gain huge market share of 31.2%.

Amazon is also having tie-ups with different companies such as Oneplus, Redmi, etc. under which they get benefit of launching of the product line of the company. They also have tie-ups with the banking companies through which they provides different discount and payment offers to their customers. This helps them in attracting consumers towards the products and services they offer.

Amazon also focuses more on youth and tries to attract their attention by providing them discount offers. Amazon provides flat 50% off on its Prime Membership to the youth between the age group of 18 to 24 years.

Suggestions to Amazon

Following are the suggestions: 1) they should increase their tie-ups with different companies which would leave their customers with wide range of product benefits; 2) they should try to expand more of their business in expanding and developing markets; 3) they should continue diversifying its business to further strengthen its against industry-specific risks such as cybercrime, aggressive competition etc.

Flipkart

Flipkart is India’s largest e-commerce company based in Bangalore. Sachin Bansal and Binny Bansal founded this company in the year 2007. Initially company only focused on book sales before expanding into electronics, fashion, home essentials, lifestyle products etc. It is also a leading company in the with market share of 31.9% followed by Amazon with 31.2%. Mission: “To provide the customer with the product and services they wish for”.

Service Positioning Used by Flipkart

  • Competitive comparison. Flipkart uses competitive strategies to position itself in the market. They compete on price bases. They always try to match or lower the price of their services compared to their competitors.
  • Positioning by strong segmentation. Flipkart has demographically segmented its customers so well that it can position its different services to different targeted customers. This helps them in easy processing of service.
  • Positioning by wide range. Flipkart has positioned itself in the competitive market by providing large/wide range of products. They have tie-ups with the company like Asus, Realme etc., which allows in wide range of product and services and help them in attracting customers.
  • Positioning by reward system. Flipkart uses reward system in market positioning. Under this they reward their customers with exciting offers and cashback. They also reward customer with super coins which can be used of later or next purchase.
  • Positioning by innovative taglines. Flipkart uses innovative tagline to attract the customers towards them during sales. They used taglines like ‘If It’s Trendy, It’s On Flipkart’, ‘Abhi Nahi Toh Kabhi Nahi’, ‘Ab Har Wish Hogi Puri’ etc.
  • Premium services. Flipkart offers their customer with an option to buy its premium membership which would provide them with certain future benefits.

Analysis of Flipkart’s Service Positioning

From the above discussion we can say that Flipkart has positioned itself as a loyal, trust worthy, and customer friendly e-commerce brand. This can also be proved by its market shre of almost 31.9% which highest by any online retailer in Indian market.

Flipkart also have some competitive advantages like:

  1. There founder are ex-Amazon employee who have complete and required knowledge of business. This provides them with a slit upper hand on the working of competitor in the market.
  2. They have fantastic grip and positioning in electronics market as they have wide range in product line because of their tie-ups with large companies.
  3. It also has slit upper hand in market as they have acquired companies like Myntra, Jabong, chapak.com, Mine360 etc.
  4. They have also acquired UPI based payment startup PhonePe which provides their customer with smooth, error free, and safe transfer of money.
  5. They have their own distribution firm ekart which ensures smooth and accurate delivery of the products and services.

Suggestions to Flipkart

Following are the suggestions: 1) they should improve their distribution channel because unlike Amazon, Snapdeal, Ebay etc. (they are not able to deliver customers in remote areas); 2) they should increase the maximum package size that is 8kg (this is low when compared to competitor like Amazon); 3) they should reduce the time which they take in delivering the product or services (they take lot more time than its competitors); 4) they should provide customers with good exchange offers in electronic products; 5) they should provide early excess of offers and products to its premium customers who have their Premium Membership.

Conclusion

After a long discussion on Amazon and Flipkart’s service positioning strategies, we can conclude following points from it. Both the companies use some similar positioning strategies like providing customers with their premium membership, using innovative taglines, providing rewards etc. But even after using similar strategies the success ratio of both companies differ. Both the companies are expanding their arms in similar directions such as electronics, digital payment, groceries etc. They also have very strong competition between them but in the end Flipkart manages to win more market share compared to Amazon. When compared in experience Amazon is rated higher than Flipkart, but when it comes to trust and loyalty Flipkart is rated higher than Amazon. There is no doubt that Flipkart stands higher in tier II and tier III cites with its efficient delivering network but Amazon has huge base in its Prime Membership subscribers.

Learning from Assignment

Following are the learning from this assignment:

  • I had a deep insight into the working of big online giants and how they work in positioning their product and services in competitive market.
  • It gave me handful of experience in how to collect secondary data and analyzing the same and deriving appropriate conclusion from it.
  • Learned valuable skills such as online research of data, time management, how to present searched data, how to communicate ideas effectively & how to conduct a plagiarism test.
  • Also learned how to successfully position a brand in a competitive market and maintain it for longer period of time. As done by Amazon & Flipkart.
  • Learned how to conduct a research project through collecting secondary source of data information.

Amazon Strengths and Weaknesses Analysis

Amazon Strengths and Weaknesses Analysis

Jeffrey P. Bezos is the president, Chief Executive Officer (CEO) and Chairman of Amazon.com Inc. Before Bezos became the founder of Amazon, he had a job from Intel, Bell Labs and Anderson Consulting. However, Bezos refused to invest those business for starting at fintech telecommunication which is Fitel. From 1998 until 1993, he transitioned to become a product manager at Bankers Trust and he quitted the job of Bankers Trust to become next hedge fund’s fourth senior vice-president, D. E. Shaw & Co. In 1994, Bezos finally starts up the Amazon business plan on a road trip from New York to Seattle.

Issues

Due to COVID-19 pandemic outbreak, Amazon has faced one issue that led a dramatically dropped on its reputation. A team of warehouse’s employees worked in Amazon.com Inc sued this digital retail giant, Amazon because of its workplace conditions have a very higher risk of getting COVID-19 infection. This is because one of the warehouse employee’s family member had died after touch-contacted with Amazon’s employees (Eidelson, & Soper, 2020). This issue shows that Amazon has failed in doing safety protection in its warehouses, fulfilment center and for its employees. For example, during the extremely bad environment condition, Amazon still encouraged employees to continuously attending the works and does not emphasize on the importance of washing their hands, social distancing and sanitizing their workspaces. Besides that, Amazon had provided employees the false information and force employees to work over the hourly quotas by using company’s discipline policy. This issue caused Amazon to temporary closed its facilities and faced a growing pressure between Amazon and its warehouse’s employees nationwide.

Major Strengths of Amazon

Some of the major strengths of Amazon are having low cost structure in the market, a huge number of third parties’ sellers and being the largest merchandise selections. Amazon is mainly focusing on selling at online. This is because it doesn’t incur larger costs related to operate in physical retail stores and it can sell more units of products without rising in marginal costs. This shows that, the reduction of costs enables Amazon to sell lower price to customers. Furthermore, compared to Walmart, Amazon is selling approximately 356 million of various products in Amazon.com while Walmart is only providing 16 million in its e-shop (Scrape Hero, 2017). From that, it is clear that more online customers are more likely to visit Amazon.com rather than Walmart’s digital stores. Furthermore, third party sellers are able to sell their own merchandise on Amazon’s websites and compete against Amazon’s own product. Third party sellers also have power to decide their product categories, set prices and the minimum advertised price (MAP). This attract more thirty party sellers to engage with Amazon to start their businesses. Thus, the above strengths can increase the growth of Amazon.

POLC Lead to Success or Failure

Amazon’s POLC can lead to its current success whereby other online retail companies have failed is due to its customer-centric focus, which means makes the customer services at the cornerstone of Amazon.com. For instance, customers are profiled in order to retrieve their births with promotions given, offers newsletters to get latest information and develop a space for customers to read them. Next, Amazon has organized to increase the number and usage of Alexa skills, subscribers of Amazon Music unlimited and Amazon Prime subscribers in order to achieve the goals. Apart from this, leaders of Amazon always think ahead and do not sacrifice long-term value for short-term results. They motivate and encourage the entire company by giving incentives to the employees. Lastly, Amazon is measuring the success of Amazon by compete the sales of products with other company. For example, Amazon compared its device sales with the similar product’s sales from Google such as Google Home. Although device sales do not reveal insights into customer behavior but it offers a high-level measure of competitiveness.

Most Important Thing Leads to Success or Failure

With Amazon edging towards the world’s first trillion-dollar company, Amazon has emerged as the new model of innovation effectiveness. It able to move ahead of others, produce innovative products, implement process and business model innovations. This shows that, Amazon has an essential competency and innovations abound. Amazon has innovated the services which started from one-click ordering for purchasing to the extended marketplace of individual resellers, to provide the warehousing and fulfilment services to its reseller partners, to its accommodating returns policy of products, to Prime. This indicates that Amazon has continuously innovating across the product areas and business policies and over the logistics and distribution. Therefore, each of the products innovated by Amazon has succeeded and the overall quality of products and the company’s supply chain flow has become better.

Major Challenges Facing Amazon in the Next Five Years

As Amazon provided hundreds of millions of products at competitive prices and became the dominant e-commerce marketplace in the world, it also has a huge number of third-party sellers. However, the trust worthy of third-party sellers could be the major challenge for Amazon in the next 5 years. Although third-party sellers have generated an increasing revenue of products on Amazon in 2019 which is approximately 53 billion U.S. dollars, compared to previous year which is approximately 42 billion U.S. dollars but it could brings serious problems such as fake, unsafety, unregulated and counterfeit products that could lead to damage in Amazon’s image. Amazon may receive lawsuits in the future by customers who complains Amazon’s products are counterfeits and it require to spend a lot of money to address the problems (Gaus, 2019). Hence, not only Amazon’s reputation will be destroyed but also it have to waste more resources to settle these problems.

Besides that, COVID-19 pandemic outbreak will cause Amazon to be challenging in the next 5 years. As COVID-19 pandemic outbreak roiled Amazon’s businesses, customers have complained about shipping problem from the third-party sellers on the site. Due to the widely spread of infectious COVID-19, government will restrict the rule and regulations for safety protection. This will cause Amazon unable to conduct large events such as annual shareholders meeting, pause tours of its fulfilment centers and headquarters as usual and was forced to hold it virtually at online. Not only that, Amazon’s delivery services will also be blocked from importing and exporting. Thus, it is certain that Amazon will incur a losses. Amazon will have to consider ways such as lay-offs its employees in order to control the costs.

Amazon Organizational Culture Features

Amazon Organizational Culture Features

According to Jeff Bezos, he said that every meeting should be small enough that attenders can fed with two pizzas. This shows that, smaller team can produce better productivity of performance (Choi, 2013). To maintain a capable workforce, Amazon must reinforce its organizational culture to shape the development of human resources for long-term competitive advantages. It also pushes employees to explore their ideas and take risks to seek new opportunities. Amazon is promoting boldness toward its employees. Amazon’s employees have motivated to take risks and create innovative ideas in order to improve the e-commerce business. Also, Amazon facilitates openness toward new ideas based on an organizational diversity policy to solve the problem.

Apart from this, the customer-centricity is the mission statement of Amazon and highlights the centrality of customers in its business. For instance, Amazon has built up the employees more emphasize on customers’ satisfactions. It continuously strives to identify trends and changes in customers’ preferences and provides those tastes in its digital retail and related services. In a nutshell, Amazon maintained its effectiveness to fulfil customer’s needs and wants as the e-commerce business expand.

Leadership Style

Amazon’s leadership style has been classified as pragmatist. This meant that, it sets high standards and expects all employees can target all the achievement made by Amazon. It has applied the employee-centered leaders in University of Michigan so that they able to make better decision for improving Amazon. Customer obsession is the leader set customers as priority and work behind based on customer is king. It has more concentrate on clients and create customer’s loyalty in order to enhance the positive experience for its customers. Not only that, Amazon has encouraged group member to learn and be curious at everything to improve themselves and knowledges. They always want to know about new possibilities and act to explore them. In addition, leaders are obligated to respectfully challenge decision when they disagree, even though it is uncomfortable and exhausting. They have to move forward and think positively to accept the decision and commit wholly (Amazon.com Inc, 2020).

Motivational Style

Jeff Bezos, founder of Amazon.com Inc motivates Amazon employees by providing a unique compensation that give a chance to employees to learn in professional skills for the workplace. As we can know that, Amazon Career Choice is an innovative Amazon program uniquely designed to upskill employees who are interested in pursuing future outside of Amazon. It helps Amazon employee pre-pays 95% of the cost of tuition, textbooks, and related fees so the employees can focus on their studies and not the expense. Jeff Bezos expects all the employees can engage in works and develop demand skills for professions of the future. Amazon has applied the Herzberg’s two-factor theory which is hygiene factor.

Human Resources Management Practices

Human resources management practices are a system that is composed by attract, retain and motivate employees to achieve its goal efficiently and has a well performance. Amazon has adopted several practices in matching model which are recruiting, selecting and training programs for illuminating goal and enhancing the employee expectations. The company has developed a retraining program called Pivot designed for under-performing employees have an opportunity to improve their performance. Pivot delegates such employees to counselling and in-house career counselors who assist them to manage their jobs and career better as the jobs become more complex will lead to high pressure on the employees. Thus, Amazon has compensated by using benefits such as employee discount, health benefits and a mix of wages.

Change and Innovation Process

Amazon.com Inc has always focusing on change and innovation by offering unique products. The company has produced a small hand-held electronic device for reading books which called Kindle. It helps readers to have a fast, convenient and affordable way to purchase the books and medium surged forward. Not only that, readers can download the PDFs of any sort of document, which makes this an ideal way of reading for work, study or collect a large number of books on Kindle, e-books. It designed with the special high-contrast screen which allowed people to read even in bright sunshine without glare, built-in wi-fi connection, lightweight and strong protection security. Instead of tough payment methods, the company has offered one-click purchases for placing an order. It will automatically charge to the payment methods and ship to the address. Both of changes make customers more convenience.

In a nutshell, Amazon’s employees has the empowerment to innovate the products and they are creative to catch the idea outlines the vision for their product idea with a theoretical press release to go with it, and writes a Frequently Asked Questions (FAQ) that explains the customer benefits and answer potential customer questions. So, a team of innovators at Amazon evaluates the idea, and get some funding to invest in market. For example, Kindle, Prime Now, Amazon Go, Alexa have created from this innovation process.

Basic Amazon’s Management Functions

Basic Amazon’s Management Functions

Amazon.com, Inc. is an American multinational technology company and largest digital marketplace in the world which founded by Jeff Bezos in Bellevue, Washington in 1994 and its headquarter is located at Seattle, Washington. Its businesses focused on e-commerce, cloud computing and online streaming. The mission of Amazon is becoming the earth’s most customer-centric company (Amazon.com Inc, 2020), whereby the clients can easily find anything that they wanted to buy on digital or physical store, and endeavors for offering the products at reasonable prices. It is guiding by four principles which are customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking with matching with its core value to succeed.

Besides that, Amazon is selling the unique products and services through digital and physical stores to increase the concentration on better selections, affordable prices and convenience among the customers. As a manufacturer, Amazon produces and sells electronic devices including Kindle, Fire TV, Echo, Ring, Alexa and other devices. In addition, it also sells software, books, clothing, shoes and jewelry and toys and games to satisfy and maximize client’s needs. Customers are able to access its offerings through online platforms such as mobile apps, online websites and physically to visit its stores. Amazon also offers different product and services through advertisement and provides retail websites for some countries and international shipping of products and services to other countries. It seeks to offer fast, shorten time and free delivery, easy-to-use functionality, convenience and high-quality customer services.

Amazon has targeted different market segmentation to serve its customers, sellers, developers, enterprises and content creator. For developers and enterprises of all sizes, it has offered a broad set of global compute, storage, database, and other services through Amazon Web Services (AWS) segment. It provides Amazon Prime which is a membership program that including unlimited free shipping, access to unlimited streaming of movies and other advantages. Amazon has more than 175 fulfilment centers and 150 million square feet of space where associates choose, pack and transport its orders to customers (Amazon.com Inc, 2020). It is the online retailer to enable all seller to sell and store products in their warehouses and resell them to customers for earning the fixed fees, interest, a percentage of sales, per-unit activity fees.

Amazon’s Management Functions

Planning

Firstly, Amazon’s goal remains continuously to improve the bar of customer experiences by using the methods of digital ecosystems and high technology to serve customers for finding, discovering and buying anything they want. It also empower businesses and content creators to maximize their prosperity. The system and infrastructure have to be sustained by investment to facilitate outstanding customer’s convenience, choice and service. Therefore, Amazon is planning to expand the music services to its product offering and over time it believes that other products may also be prudence investment. Also, Amazon has an accomplishment by serving global customers better with reducing delivery times and enhancing the customer experiences in order to expand its businesses.

Organizing

In order to attain a goal, Amazon employees are organized across 12 levels of hierarchy which included the highest level of Jeff Bezos, CEOs, VPs, directors, senior managers, managers and individual contributors, the lowest level is staffs, fulfilment center workers (Objective Oulook,2017). Amazon has distributed its operations into three segments which are North America, International and Amazon Web Services (AWS). It has a feature to accomplish a goal which is organizing the feature ‘1-click checkout’ (Jolly, 2017). This shows that, it is able to save multiple credit cards and addresses and its powerful search function can help customers to accelerate their shopping time. This design feature is organized well with Amazon’s team to improve their customer experiences. Besides that, Amazon’s management has organized the ‘Question mark’ emails to response all the customer’s feedbacks (Jolly, 2017). For example, Amazon has always ready to help customers to solve the problems on 24 hours services. This is one of the ways to attain a goal for collecting all the customer’s response inside the organization to make better decision.

Leading

Besides that, Amazon also provides several training programs to improve the employees’ professional skills which are Career Choice and Career Skills programs for an-in demand of choice, regardless of whether the skills relate to a job back at Amazon. Career Choice is available to Amazon employees who have been employed at hourly for one continuous year. With this program, Amazon has pre-paid 95% of tuition and fees for workers to gain certificates and high demand occupations in employee degrees such as aircraft machines, computer-aided design, medical laboratory science, and others. With the great interest of Career Choice, Amazon has built 39 onsite classrooms to encourage college and technical classes can be taught inside the fulfilment center to motivate employees’ participation in Career Choice. This led to enhance employment opportunities in high demand jobs. In addition, Career Skill is free, an onsite training and development programs for all Amazon employees. This program offers classes on a variety of skills such as resume building, interviewing skills, effective speaking and time management to develop the employees’ knowledge and professional skills. Not only that, Amazon offers performance appraisal to all full-time employee with health insurance, 20 weeks paid maternity leave, and other encouragement.

Controlling

Lastly, Amazon has monitored the progress toward its goal and reached a success that will be the shareholder value it created over the long term. The shareholder value will be a direct result of its ability to extend and solidify their current market leadership position. The stronger of Amazon’s market leadership, the powerful of economic model. This will lead to greater revenue, higher profitability, higher capital velocity and correspondingly stronger return on invested capital. In the beginning, Amazon is targeting its own marketing leadership such as growth of customers and revenue, creates the customer loyalty to continue purchases from Amazon, and strong brand awareness. Amazon has invested and will continue to invest aggressively for larger growth capability and leverage its customer base, brand and infrastructure as Amazon moves to establish an enduring franchise. Also, Amazon will keep focusing on hire and retain versatile and talented employees and weight their proper compensation for boosting overall employee performance and achieve its goal.