Amazon has grown to become one of the most important companies in the US. Millions of people rely on the highly efficient deliveries and cheap prices. Moreover, the company has turned into one of the largest employees, as numerous Amazon fulfillment centers are scattered across the country. With such scale, a wide range of issues inevitably arise. Recently the multiple complaints concerning the way Amazon treats it workers have managed to draw public attention. Therefore, a dedicate analysis is need in order to understand what kind of working conditions and atmosphere the IT giant provides.
Key Problems: Job Dissatisfaction and High Turnover Rates
Guaranteeing $15 an hour may be a nice incentive for people in poor neighborhoods, but only in the short run. Motivating people to work better by gradually increasing their pay would be not only more appealing and psychologically comfortable, but also highly beneficial in the long run. Task assignments and worker motivation interact through the extent of labor market competition – that is, the possibility of moving to another firm (Bar-Isaac & Levy, 2022). Therefore, Amazon should consider applying a more traditional approach to motivating workers, which will help to reduce current turnover rates.
Cause: Poor Motivation Techniques
E-commerce is no longer as lucrative as it used to be a decade ago. It has become the primary way people do shopping, especially in the midst of the Covid-19 pandemic. Therefore, numerous new companies have jumped at the opportunity and managed to extend their market shares. Thus, Amazon is determined to cut costs substantially by various means, including the construction of its fulfillment centres in the neighborhoods that have not fully recovered from recent economic recessions. According to Kinicki (2020), turnover is one of the major outcomes that should be considered while tailoring the set of inputs. Currently, the company’s turnover rate continues to be extremely high.
Desired Solution: Utilizing More Conservative Motivation Frameworks
The emphasis on fear, the discouragement of camaraderie and many other Amazon’s current policies substantially undermine employee’s motivation and the company’s public image. The desired potential solution plan includes the introduction of systematic pay raises, the enhancement of bonus systems and changing the way employees are timed. These steps will help the IT giant to motivate employees in a much more positive and respectful way.
References
Bar-Isaac, H., & Lévy, R. (2022). Motivating employees through career paths. Journal of Labor Economics, 40(1), 95–131. Web.
Kinicki, A. (2020). Organizational behavior: A practical, problem-solving approach (3rd ed.). McGraw Hill.
Over the decades, technological advancement fostered the intensification of business practice and competence. In this case, a significant percentage of the enterprises focused on optimizing market expansion and the attainment of the niche position through the sustainability concept. Nevertheless, different countries uphold various corporation policies hence posing a challenge to the penetration of international organizations (Nguyen et al., 2018). On the one hand, it is the responsibility of the company to ensure positive and competent branding of the products internationally. On the other hand, subcontractors in foreign nations pose a dynamic challenge in understanding the importance of labeling. This study explores two major case studies, that is, Nike and Amazon, regarding branding, market expansion, and e-commerce. Administrative performance depends on the optimal participation of all stakeholders in the operations and implementation of the project frameworks.
Branding is an essential marketing strategy due to its focus on determining its target customers. Technological advancement and the increase in the human population highly affected the diversity of natural resources. As a result, a significant percentage of the institutions implemented frameworks that elevate the acquisition of a competitive position in the niche population. One of the segments spearheaded by the evolutionary trend enshrines sustainability belt. It is a portion of individuals whose interests align with the implementation of policies and practices that complement the coexistence between people and nature. CHLA is an organization that focuses on the establishment of ideologies that enhance the restoration of the environment’s aesthetic value while fostering business profitability (Hunt, 2021). In this case, the company establishes a brand under the spectral view of plausibility.
Branding is a multifaceted phenomenon that engulfs the intersection of dynamic values to boost effectiveness. An excellent example of an enterprise whose competitive advantage relies on imprinting is Nike. It is an international company that focuses on the production of sportswear for both men and women. The organization’s marketing strategy engulfs the diversification of its product and the provision of high-quality goods. In this case, the company intensifies its marketing and branding through sponsorships and endorsements (Tien & Ngoc, 2019). An excellent example is the management’s focus on supporting the local gaming activities and the individual participants. It is a phenomenon that enhances the firm’s branding with the social identity of the Vietnamese. On the one hand, the institution received optimal support from the government due to the trickle-down effect of the benefits. On the other hand, poor organizational culture and human resources led to the emergence of lawsuits regarding child labor while the workers strike for additional pay (Yusoof et al., 2017). The company’s focus on productivity over the welfare of the employees in Vietnam significantly affected the brand identity and marketability within the region.
Market penetration is a vital factor for CHLA since efficiency is the reflection of the marketing plan. The growth of aquaculture profoundly depends on participation of all stakeholders. Nike’s market penetration in Vietnam is a factor that highly affected the company’s productivity and marketing. Ten years after its establishment, the company employed at least 130,000 Vietnamese in the factories (Nguyen et al., 2018). Apart from providing employment opportunities, the organization and the Vietnam government attain 14% of the extra duty on exports to America (Tien & Ngoc, 2019). Both entities achieve significant benefits based on business profit optimization in this case. On the one hand, Nike attains tax exemption and cheap labor. On the other hand, the Vietnam government boosts its relation with the American administration and shows the opportunities for international entities to invest in the nation. The interdependent relationship between Nike and the Vietnam legislative poses significant enterprise growth and development.
CHLA focuses on the improvement of the administration process through the incorporation of independent and management theories for sustainability. Although the company features a hierarchical system of governance, the articulation of the duties and responsibilities attributes effective perforation initiatives such as the adoption of local culture and engagement of the communities. CHLA is based in Australia, which is home to a diverse society hence the opportunity to implement the ideology to elevate sustainable practice (Hunt, 2021). One of the primary objectives enshrines enhancing the development of a competent organizational culture. In this case, the hierarchical system focuses on ensuring accountability from the employees during operations while boosting the flow of communication. A functional corporate environment encompasses the conduct of activities while attaining optimal government support.
Market penetration strategy is a concept that encounters dynamic challenges due to the profound influential factors. An excellent example of these factors enshrines the governing policies across different regions. CHLA seeks to expand its operations globally; therefore, it is crucial to assess the dynamic constitutional variations that impact business profitability (Hunt, 2021). As a multinational organization, Nike aims to perforate across different countries to enhance its activities and the clientele scope (Nguyen et al., 2018). As a result, the enterprise faces significant issues regarding taxation despite the vast investment opportunities. The major blueprint for CHLA to foster the effective attainment of a competitive position engulfs the incorporation of sustainability practices that elevate the trickle-down effect of the benefits such as employment of community members. Apart from providing jobs, CHLA implements an educational program to train the personnel on dynamic approaches to create prospects and render growth and development. In this case, the organization establishes a mutual relationship with foreign regions while securing favorable administrative guidelines.
In a different spectrum, Nike faces dynamic challenges during business operations in Vietnam, a phenomenon that significantly impacts the company’s public relations. Although it was the responsibility of the owner of the establishment, the news focused on Nike as the brand that promotes child labor in Vietnam. Additionally, the increase in the workers’ wages poses a challenge to Nike due to the necessity to increase the compensation percentage against the relative profit margin (Yusoof et al., 2017). These challenges profoundly impact the level of productivity and branding in Vietnam. Vietnam is strategically located in mainland Southeast Asia. In this case, the organization efficiently distributes its products across the Asian continent and ships to America. Strategic marketing is an entity that entails the integration of business profitability and competence in the niche sector.
Nike is one of the competent international companies operating across the globe. In this case, the organization attains the niche market in Vietnam through sponsorship programs, local labor employment, and customized branding. The organization’s business model is a construct of strategic management and promotion of the products and services (Liu, 2021). The factory based in Vietnam produces a significant number of shoes supplied in America and partially in Asia. Therefore, it is crucial for the enterprise to ensure the optimal well-being of the workers and business operations.
The above case study provides a prominent solution to sales and marketing under the spectral view of aquaculture. On the one hand, Nike’s marketing strategy to expand to Vietnam renders both challenges and opportunities. On the other hand, the case study showcases the interdependence between marketing strategies and organizational culture. Effective marketing for the institution encompasses establishing policies that promote the participation of all stakeholders. It is an initiative that renders a prominent solution for sustainable and competent business activities. In a different spectrum, it is crucial for the firm to optimize e-marketing to secure a competitive niche market position across the online market.
Global E-Marketing
The emergence of computers and the internet is a concept that led to the increased flow and accessibility of information among individuals internationally. As a result, the evolution cultivated the development of a global village with a dynamic niche market. The concept posed a paradigm shift in the marketplace regarding consumer behavior due to the empowerment tool of product knowledge (Singh, 2017). A significant percentage of individuals attain information about commodities through online portals. Therefore, a global e-marketing strategy is a crucial solution to organizations in boosting competence and optimization of customer service experience, satisfaction, and loyalty.
E-commerce is an emblem of sustainable practice due to the effective spread of information within the global village. One of the CHLA’s key objectives engulfs mobilizing resources to promote the equal distribution of benefits and relief among international communities. Although aquaculture enhances the supply of prawns within Australia, the exploitation of the technological tool empowers the institution’s sales and marketing department with proficiency in attaining a competitive market position (Hunt, 2021). In this case, it is crucial to focus on the case study of Amazon as one of the leading organizations in driving transactions through online platforms.
Amazon is one of the companies that mainly focus on the global e-marketing strategy due to the prominent factor of utilizing cloud computing platforms. On the one hand, the organization attains competence based on providing advertising space through the online platform for e-commerce activities. On the other hand, the enterprise faces stiff competition from other institutions due to the significant acquisition of information about product varieties among consumers and competitors (Gaba & Kant, 2020). Amazon utilizes different initiatives to achieve the primary goal of an international e-marketing strategy. These initiatives include cost leadership, retail business, and social media marketing.
Cost leadership is one of the factors gearing up the global e-marketing strategy for Amazon due to its profound impact on consumer satisfaction and loyalty. According to researchers, the management team focused on reducing the price of commodities in the platform to attract a broader scope of the worldwide market (Gaba & Kant, 2020). In this case, the company incorporated the interdependence between the lower pricing and economies of scale to attain a targeted profit margin. As a result, the organization secured a competent international market position based on the pricing strategy as a competitive advantage within the global e-marketing plan.
The social media campaign is another component of the global e-marketing strategy that involves the study of the niche market and the behavioral outlines. The development of the outline for branding entails integrating the factors influencing consumer demeanor and the impact of exclusivity on the competence of a firm’s commodities. Apart from cost leadership, Amazon ensures the ultimate service delivery for the clients based on the necessity of a one-stop shopping entity (Jamaludin et al., 2018). The multinational institution attains the competitive advantage of enhancing the customer service experience by providing adequate information, price varieties, discounts, and an efficient interactive interface.
The intensification of competition within the global business environment demands the evolution of the marketing initiatives such as strategic management. The utilization of social media campaigns is an initiative that attracts a vast clientele base while enhancing convenience due to its prominent use of cloud computing for e-commerce. A significant percentage of global markets have access to the internet and online portals. It is a phenomenon that fostered the emergence of a niche market that focuses on online shopping for convenience in pricing and accessibility (Singh, 2017). As a result, Amazon utilizes such digital platforms as Twitter, Facebook, Instagram, and LinkedIn to promote the commodities and services with an outline of diversification for customer satisfaction from the shopping experience.
A global e-marketing strategy is an empowerment tool for CHLA enterprise due to the derivation of insights regarding consumer behavior analysis and needs identification. It is an initiative that ensures the optimal exploitation of opportunities across multinationals to establish the core value of competence in acquiring a competitive market position (Jamaludin et al., 2018). As a result, the use of the action plan that involves the assessment of the adept branding and campaigning initiative under the spectral view of cultural diversity gears CHLA’s capacity to attain a sustainable state of business profitability. Clientele loyalty is a proficient ideology that is significant in international e-commerce due to the intensive sharing of information across the emergent dynamic village.
Summary
Marketing strategy is a multidimensional phenomenon that involves the integration of frameworks addressing the company’s objectives and the consumers’ need. On the one hand, Nike demonstrates the effectiveness of market expansion and branding through endorsements and involvement of local communities in economic growth and development. On the other hand, Amazon optimizes e-commerce as a technological tool to elevate its operational efficiency and incorporates cost leadership for consumers’ convenience. Primarily, CHLA focuses on promoting sustainability through aquacultural activities. As a result, it is crucial to exploit the dynamic ideologies such as e-commerce, cost leadership, involvement of local communities, and branding differentiation.
Nguyen, K. T., Van Nguyen, P., Le, K. A. N., & Bui, T. D. D. (2018). Identity representation in customization: A case of Nike shoes. International Journal of Supply Chain Management 7(5), 583-597.
Liu, X. (2021). Nike’s general company analysis is based on its 2020 annual report. In 6th International Conference on Financial Innovation and Economic Development (ICFIED 2021) (pp. 799-803). Atlantis Press.
The first group of firms in the retail sector, such as Amazon and Wal-Mart, are not monopolistic entities. Although the firms are dominant in their industry, they still allow competition from other firms. The retail sector has a steady stream of entrants. Ideally, group two firms in the telecommunication sector thrive in an oligopolistic environment. Here, a few firms control a large part of customers and sales in the market. Few companies offer telecommunication services.
Specifically, this analysis will focus on Amazon, which is one of the leading online markets. Amazon has been able to integrate business challenges such as the ones in porter’s analysis to thrive safely in the competitive business world (Xiang & Wang,2021). Michael Porter’s tool, the Five Forces Analysis, can be used to assess the external situation of Amazon company. In the case of analyzing external concerns surrounding Amazon, these are simply the conditions of the e-commerce environment, with a focus on the online retail market. However, the analysis also touches on other areas, such as digital content distribution, consumer electronics, and cloud computing services. To date, Amazon remains one of the largest companies in the e-commerce market; in particular, it is one of the pioneer organizations.
Amazon has regularly evaluated external factors in the online and non-online business environment to ensure they still control the industry through the Five Forces Framework. Remember that the force of competitor firms such as Walmart, Google, Microsoft, and Apple can be tackled using the right strategies. Since Amazon competes with many small firms and big stores, it must ensure that it remains resilient in the wake of changing online business environment. This is by ensuring competition is regulated and the bargaining power of buyers and customers.
Reference
Xiang, J., & Wang, B. (2021). AMAZON FINANCIAL MODEL. European journal of economics and management sciences, (2), 16-28.
Individuals are considered responsible for performing civic duties, and their acts should benefit society as a whole, according to the ethical idea of social responsibility. In this approach, a balance should be maintained between economic progress as well as societal, and environmental well-being.
Discussion
When a corporation works sustainably and responsibly and addresses its environmental and socio-economic implications, this is referred to as corporate social responsibility. This entails the consideration of human rights, as well as the community, conditions, and society in which it works. Social responsibility and policy are key issues in strategic management since social responsibility influences all business activities that potentially impact organizational strategy. For instance, based on the notion of dynamic capacities, researchers develop a separate strategic social responsibility paradigm (Siegel & Leih, 2018). This approach concentrates on establishing and maintaining an operational infrastructure that allows functional departments to optimize their impact by aligning strategy and capabilities (Siegel & Leih, 2018). Businesses with a high level of social responsibility have a superior public image, enhanced brand awareness and brand image, cost reductions, a competitive edge, greater consumer involvement, staff engagement, and more personnel benefits.
Conclusion
Concerning the integration of social responsibility and policy in recommendations for Amazon, it is feasible to emphasize environmental issues first. For instance, as a major global provider of delivery and shipping services, the company can include renewable energy programs and net zero carbon approaches to its strategic social responsibility activities. Furthermore, it is possible to propose a certain procedure related to the verification and proper audit of the current corporate social responsibility system. For example, additional policies can be integrated and potentially implemented regarding customer service and quality of delivery. It is compulsory to note that Amazon is a global, developed, and fundamental company, and small changes and additions can lead to significant shifts in the whole market. Thus, it can be recommended to highlight common issues when working with social responsibility and policies.
In the latest letter to Shareowners published on the company’s website, Amazon CEO Jeffrey P. Bezos spoke about the global challenges set for the company. He reported on current successes and emphasized the company’s importance for its customers during the pandemic. The company has taken all possible measures to ensure the supply of essential goods to those who need them and protect its customers from dishonest speculators. The letter also describes efforts to protect and support employees during the COVID-19 pandemic. For instance, Amazon raised its minimum wage, organized special health security training. Moreover, the company made over 150 significant process changes in operations to transition to the “new normal” safely and efficiently.
Jeffrey P. Bezos highlighted Amazon Web Services’ role in supporting medical research, collaboration with the World Health Organization and the country’s National Health Service, and helping Academic institutions worldwide transition from in-person to virtual classrooms. Alexa users got an option to check their risk level for COVID-19 at home or donate directly to charities on the front lines of the COVID-19 crisis. These donations have allowed distributing 73,000 meals to 2,700 elderly and medically vulnerable residents in Seattle (Amazon 3). Another example is 8,200 donated laptops to help Seattle Public Schools students gain access to virtual classes.
Finally, the letter emphasizes the company’s efforts to retrain its employees, educate and attract a workforce from other industries, and transition to a low-carbon economy. These forward-looking projects are essential for society and allow the company to maintain its competitive advantages. For instance, a complete transition to renewable energy sources makes the company less vulnerable to possible regulatory changes.
In less than 20 years, Amazon has managed to change the way people view online shopping, and one of the factors that enabled this possible was the launch of Prime 2-day delivery. Currently, more than 100 million people use the service, and they expect that the products they shop online will be delivered to their doorsteps in 48 hours or less, otherwise termed as 2-day delivery (Jindal et al., 2021). Choosing 2-day delivery reduces the time it takes to get the product and make it ready for shipping by two business days after Prime ships the order but has no impact on how long it necessitates to obtain the item or get it ready for shipping. When the merchandise ships, the shipping method’s time starts. The vast majority of online shoppers increasingly demand two-day delivery, which is known as the “Amazon Prime Effect.” Throughout its Amazon Prime program, Amazon has become the benchmark for fast delivery (Aćimović et al., 2020). Prime customers often obtain their purchases two days after placing them. Two-day delivery on Amazon can mean either two different business days or two complete days. Furthermore, the time can start running when the order termination time or the checkout time has been met.
Fulfillment centers are a type of warehouse that Amazon has been growing. As a result of the expansion and having more storage space, deliveries are made faster. If they have similar products in various locations, all they must do is transport the item from the warehouse that is closest to the destination it is heading to. In addition to UPS and the US Postal Service, Amazon makes use of independent couriers (Jeong et al., 2021). Hence, if one has a nearby warehouse and personal couriers, the packages will undoubtedly arrive sooner. As a result, having more fulfillment Centers will help increase Amazon’s process for Prime 2-day delivery, making it more possible to make the delivery in 2 days and therefore satisfying their customers’ demands.
References
Aćimović, S., Mijušković, V., & Milošević, N. (2020). Logistics aspects of goods home delivery: The case of amazon company. Marketing, 51(1), 3–11.
Jeong, H. Y., Song, B. D., & Lee, S. (2021). The Flying Warehouse Delivery System: A quantitative approach for the optimal Operation Policy of Airborne Fulfillment Center. IEEE Transactions on Intelligent Transportation Systems, 22(12), 7521–7530.
Jindal, R. P., Gauri, D. K., Li, W., & Ma, Y. (2021). Omnichannel battle between Amazon and Walmart: Is the focus on delivery the best strategy? Journal of Business Research, 122, 270–280.
Over the last decade, automated equipment has replaced the manually operated equipment used in warehouses to store and pick merchandise. Every warehouse facility often aims at increasing its productivity in the storage and sorting of items. With the rapid growth of the current cutting-edge technology, this goal can be easily achieved. Although innovative warehousing requires huge investments, most global companies like Amazon are striving to create an elaborate and effective warehouse system to enhance their supply chain management, thus increasing their sales.
Company Background
Amazon Inc. is one of the largest e-commerce and cloud computing firms in the United States. The giant firm was founded in 1994 by Jeff Bezos and first operated as an online bookstore, before transitioning to offer digital editions through the kindle e-reader (Amazon, n.d.). However, over the years, the multibillion-dollar company has grown to become a retailer that stocks almost all types of products. The inventory and shipping empire provides its customers with a wide range of product categories including clothing, electronics, office supplies, groceries, home furnishings, e-books, and other types of media. Due to the nature of the enterprise, the company invests in supply chain management to enhance the flow of products from the manufacturer to the consumer in the most effective way possible. As one of the most important aspects of SCM, Amazon has various strategies to develop an innovative warehouse.
Warehouse Innovations and Employee Work Environment
While trying to create an elaborate SCM system, Amazon has redefined its warehouse efficiency through various innovations to enhance its customers’ convenience. One of the most outstanding features of Amazon’s warehouse management is its random storage system (Rodrigue, 2020). Although the system may look confusing, the giant retail company uses it to group products together intending to enhance on-demand efficiency. Before placing any product on the shelf, Amazon warehouse workers scan its barcode, thus making it possible for the computerized system to track where each object is located. Randomness is also preferred as it saves on space by aiding in the handling of the diverse products purchased online. Although the giant firm did not invent this strategy, it has implemented the random storage philosophy at a scale that has not been seen before.
Amazon’s warehouse management is also categorized into various groups. First, the sortable fulfillment center involves over 1500 full-time associates who pick, pack and ship consumer orders like housewares and toys (Amazon, n.d.). However, these associates are assisted by Amazon robotics to enhance efficiency in meeting customers’ demands. Similarly, Amazon has non-sortable fulfillment centers with over 1000 full-time associates who deal with bulky consumer items like furniture and outdoor equipment (Amazon, n.d.). Furthermore, the global enterprise has other warehouse categories like sortation, receive, specialty, and delivery centers. Within all these fulfillment centers, Amazon uses computer-controlled robots which navigate around the warehouse using markers on the ground.
Exemplary Elements
One of the most exemplary elements of Amazon’s innovative warehouse is the automated shelf-moving warehouse robots. In 2012, Amazon used $775 million to buy Kiva Systems, a startup robotics business, giving the global enterprise control over a new generation of mobile robots that can transport shelves of goods from one employee to another (Li, 2016). These computerized robots scan barcodes on the ground to trace their direction. This innovation provided Amazon with a technical framework to develop new iterations of warehouse robotics, paving way for a future where the only employees required could be the ones hired to maintain and repair the robotic systems. As of 2021, Amazon iterated on its machine learning project, freeing the robotics team from the strenuous task of managing multiple GPUs. This technology-based innovation saved the company half of the ML interference costs, thus improving both productivity, and overall savings (Amazon, n.d.). The over 200,000 mobile robots working in the Amazon warehouse networks, aiding the human workers also helps the global company fulfill its speedy delivery promise to the prime consumers.
Improvements
While it is true that Amazon’s innovative warehousing makes the fulfillment centers workers’ jobs easier, several faults require the company to make some improvements. For instance, with the automation of most tasks in the warehouse, there are very high expectations from workers. With the new high targets, most workers get a limited time in between the tasks. Such cases may not only compromise the safety of the fulfillment center workers but also increase the probability of items being damaged due to failure to adhere to some rules. Therefore, Amazon should reconsider some of these outrageous expectations, considering that human beings can suffer from exhaustion. In addition, according to recent investigations, robotic warehouses like Amazon fulfillment centers record a high rate of workers’ injuries (Hill, 2019). Therefore, the global retail company should consider its employees’ safety by eliminating cognitive, hidden, and moral injuries. Working on these recommended adjustments can not only enhance Amazon’s productivity but also help maintain a good reputation.
Amazon is one of the biggest and most well-known e-commerce companies in the world. As of 2021, its online sales accounted for 41% of the market share in the U.S. compared to other e-commerce retailers (“Market Share of Leading Retail E-Commerce Companies”). Moreover, apart from its main activity, the company is also involved in online video streaming, provision of cloud computing services, movie production and distribution, and artificial intelligence development through numerous subsidiaries. They include such companies as Twitch Interactive, MGM (Metro-Goldwyn-Mayer) Holding, Audible, Alexa Internet, and Amazon Web Services, to name a few. Although such a success is explained by various factors, effective strategy development on various levels of the firm activity can be considered as one of the most important determinants of the business’s competitive advantage. In this regard, the current article intends to identify what are Amazon’s business-level, corporate-level, and international strategies.
On a business level, the company seeks to minimize its operational costs and provide better quality products. From the perspective of Porter’s Generic Strategies framework, such a strategy can be denominated as ‘cost leadership’ (Jiang 357). It is primarily achieved through ownership of numerous large warehouses that leads to significant savings in regard to product storage due to economy of scale (Suleman et al. 170). Additionally, the organization invests substantial amounts into the development of network technologies and artificial intelligence, which helps Amazon optimize its operations (Suleman et al. 170). Last but not least, the company puts a heavy emphasis on the automatization of the processes, which allows it to minimize mistakes and reduce labor expenses.
As for the corporate-level strategy, Amazon diversifies its business activities through mergers and acquisitions as well as through internal development. For instance, the most recent company acquisitions are MGM Holdings (2021), Wickr (2021), Umbra 3D (2021), and Strio.AI (2022). According to Li and Chen (3), such an approach allows entering new markets with lesser risks and costs. On the other hand, the internally initiated promoted diversification initiatives include Amazon Web Services, Amazon Books, Amazon Games, Amazon Publishing, and Amazon Fresh, among others. Generally, it can be argued that the company is extensively diversified and operates in many not-related spheres. As such, the company is present in the markets of books, audiobooks, movie production and distribution, hardware and software, artificial intelligence, cloud platforms, automobile development, pharmacy, grocery, clothes, and shoes online retail.
Finally, Amazon’s international strategy includes constant expansion to the new regions and adaptation to the needs of the locals. Currently, Amazon.com operates in 13 countries, but the customers are able to receive international packages from other locations (Adcock). The primary considerations when operating in foreign states include the service providers in the customer’s native language, shopping habits, and using marketing that considers local tastes (Rayapura). For instance, when Amazon entered the Indian market, the analysis revealed that most citizens in this country prefer making purchases in physical locations where they can interact with the seller (Rayapura). To address this issue, the company decided to cooperate with local sellers and distributors who could be an intermediary between the customer and the business. As a result, consideration of and respect for foreign tastes, traditions, and culture ensures the organization’s success in the international arena.
In summary, the current research revealed what Amazon’s business-level, corporate-level, and international strategies are. As for the former, it was shown that the company seeks to reduce its costs through the economy of scale, investments in network technologies and artificial intelligence, and the process of automatization. On the corporate level, Amazon’s strategy encompasses extensive diversification in various, often unrelated spheres. Lastly, the business’s international policy seeks to include as many countries as possible and to adapt to local preferences and habits.
Works Cited
Adcock, Phillip. “How Many Countries Does Amazon Operate In? – A Full List.” Shopping Behaviour Xplained, Web.
Jiang, Haoze. “Strategy Decision Making in E-commerce: A Case Study of Amazon.” 2021 12th International Conference on E-Education, E-Business, E-Management, and E-Learning, 2021, pp. 355-359, Web.
Li, Boya, and Shou Chen. “Corporate-Level Strategy and Firm Performance: Evidence from China.” Chinese Management Studies, 2019, pp. 1-15.
“Market Share of Leading Retail E-Commerce Companies in the United States as of October 2021.” Statista, Web.
Rayapura, Aarthi. “Going Global: Lessons from Amazon.” Zuora, Web.
Firoz Suleman, Marwa, Mona Rashidirad, and Saffa Firoz Suleman. “The Applicability of Porter’s Generic Strategies in Pure Online Firms: A Case Study Approach.” Strategic Change, vol. 28, no. 3, 2019, pp. 167-176.
The future of the retail market lies in online stores. Amazon has been one of the most successful players in this field in the United States. However, this takeover has been reported to have an adverse impact on the company’s profitability (Evans, 2020).
Discussion
Figure 1. Amazon Revenue & Income, bn.
This graph can be interpreted as a lack of growth, however, it is vital to take a closer look at the situation. Evans (2020) states that “the sales keep going up, and it takes a larger and larger share of US retail every year (7-8% in 2019), but it never seems to make any money.” Kim and Su (2019) state that “Amazon was known for running laser-thin margins because it reinvests most of its money back into the company’s growth.” In 2018-19, Amazon reported a net income of $22 billion, with only a slight decrease in reinvestments (Evans, 2020). Therefore, the perceived lack of profitability is related to the figure itself and not the company’s situation.
Figure 2. Amazon Revenue by Division, bn.
The second chart puts the shares of each division for comparison. This business goes far beyond retail stores, as many other projects of Amazon, such as AWS, are highly successful on the market (Evans, 2020). The share of online sales has been growing extremely fast in the past few months due to coronavirus lockdown (Davis, 2020). According to Davis (2020), “online grocery sales that tripled year over year powered Amazon.com Inc. to a 43.4% increase in second quarter sales in North America and 33.5% growth worldwide.” Seeing that a high percentage of all revenue comes from e-commerce, it is safe to describe Amazon’s current strategy as highly successful due to the flexibility and accessibility of its products.
Conclusion
Amazon, Inc., reported increased revenue in the second quarter, from $81.56 billion expected to $88.91 billion (Palmer, 2020). The online retail store continues to grow even during the current decline in businesses’ revenues across the globe. The massive scale of its divisions requires a thorough examination for a proper resource allocation.
In conclusion, online retail stores are nearly impervious to the effects of pandemics and other events with an adverse impact on sales. The measures that were taken by the company allowed it to respond to the situation, react to the sudden spike in demand, and increase the volume of sales (Palmer, 2020). It is vital to continue this trend and keep a closer look at the profitability of services in relation to their size. This analysis allows the company to decide on the most vulnerable and essential sources of income.
Regression analysis is an essential task for business intelligence in order to predict the future development of a company’s operational performance based on the data already available. For this analysis, we used data from two variables, namely sales and income. Sales should be understood as the total amount of goods sold, measured in hundreds of thousands or millions of dollars, depending on the company’s turnover. Income, in turn, is a measure of the amount of money received during the reporting period. Income could be negative with positive sales if the company suffered significant losses on other expense items. To flesh out the analysis, this paper uses sales and income variables for Amazon from 1995 to 2011. Figure 1 shows the scatter plot as a relationship between the company’s income and the number of sales. At first glance, it can be seen that starting from some position, the increase in income with increased sales was almost linear, but there is a high variance at the initial positions.
Figure 1: Scatter Plot for Amazon’s Income as a Function of the Number of Sales
Regression analysis was applied to the current data set using a polynomial function. An indicator of the reliability of the polynomial trend was the coefficient of determination R2 – the higher it is, the greater the variance of the data from the set can be covered by the constructed model. Thus, the expectedly highest coefficient of determination (R2 =.9771) was characteristic of the sixth-order polynomial trend. In this case, the multiple regression equation was determined according to Fig. 2. Notably, using the sixth-degree polynomial in the trend function creates a dip in the region of about 35 to 43 sales units, which may imply that Amazon’s income is projected to be negative in this sales range. This may seem counterintuitive, so it is additionally recommended to consider a fifth-order polynomial regression where the coefficient of determination is not very different from Figure 2, but no serious dip in income is created (Figure 3).
Figure 2: Multiple Polynomial Regression Equation of Sixth OrderFigure 3: Equation of Multiple Polynomial Regression of the Fifth Order
