Category: Amazon

The top online shopping destination in the world is Amazon.com. The organization oversees businesses in practically every economic sector and sells products from various manufacturers. The potential for a large audience to shop from home ushered in a new era in marketing history. The companys CEO, Jeff Bezos, has identified customer service as the most critical component of Amazons operation. Most customers purchase in physical stores, but Amazons market share is still increasing. An effective information system is a foundation for building an e-commerce site like Amazon, and it should be thoroughly investigated because it determines the companys financial success.

The systems users are from the middle class and of various ages. These could include secretaries, economists and lawyers, physicians and educators, engineers, and highly trained personnel. They are the ones who select and buy daily stuff like clothing, childrens items, furniture, home appliances, and technology online. These people range in age from youth to adults with a reliable income source. Conversely, the users can be young individuals with subcultures and values that elders find incomprehensible. However, the target market relies on product quality, expedited shipment, and website usability.

To satisfy its billions of usersrepresentatives of various nations with distinctive tastesAmazon has made its navigation as easy and convenient as possible. Users can search for items in the field at the top of the page after joining up. The customer inputs product-related data before clicking the search button to get a list of particular products. Another feature allows the system to select possible results as the user type keywords and presents them in a drop-down menu. The option for goods sorting is located in the right corner after entering terms in the search area. It suggests categorizing products in the catalog based on many factors, including low and high prices and vice versa, newness, and a rating. Selecting products involves deciding on them based on relevant criteria, such as department, brand, color, size, and price. As a result, it aids in increasing the offer even though there is not a perfect match with the item description.

In the top right corner, there is the traditional cart button. The online store must have this feature so customers can add one or more things to their shopping carts (Pappas et al., 2017). By clicking the Add to Cart button, selected items are added to the cart. The product name is shown on the page that follows the jump page. The item photo is posted to the product card because the product type is not often evident from the title. The user can modify the contents by removing extraneous items. Additionally, information on delivery and payment is provided in the purchasing cart.

The review feature is one of the most critical aspects of the item description page. Because Amazon receives hundreds of user reviews, the website analyzes all feedback scores and generates an evaluation list using decryption (Lee et al., 2018). Customers may see how many of each product were purchased and what rating it received. Customers can rate the reviews on Amazon by indicating whether they were helpful, and the most popular ones are shown at the top (Lee et al., 2018). People frequently check reviews before looking at product attributes, as evidenced by practice (Smith & Linden, 2017). Thus, the user does not need to look over all product details.

Talking about advantages, the fact that this online purchasing platform saves the customers time should be primarily mentioned. As long as users have access to the Network, they can make purchases from the online store whenever it is convenient for them and from any location. Customers do not have to travel to department stores because the search engine offers them an extensive list of websites with products. Choosing a few items and placing an order will take a few minutes.

Additionally, online shopping saves money because clients may buy things for a lot less, thanks to various discounts and discount schemes. Even without it, Amazon products are always less priced because an online retailer does not need to spend extra money on showrooms and pricey spaces in shopping malls. Typically, warehouse properties are outside of the city. Therefore, the rent is less expensive (Pappas et al., 2017). There are a lot of discounts and seasonal sales on the platform.

By entering keywords, the Amazon interface makes it simple for customers to find the products they are looking for so that the search engine can provide relevant results. The user can provide the requirements for the item, and the store will quickly display the appropriate goods. Since there is no longer a need to wait for sales assistants, the buyer is always given all the pertinent information about the acquired item, saving time (Pappas et al., 2017). On the Internet, the customer can rapidly analyze products, look at user evaluations, and read ratings from other customers. As a result, customers can choose the best purchase option.

The platforms primary goal is to make users as comfortable as possible to encourage them to make a purchase. A helpful search engine can easily find a product by its related terms. Many product catalogs are provided to make it easier for customers to traverse the website. The business is rightfully regarded as prominent in the e-commerce market. Amazon now invests millions of dollars in improving the user interface constantly. The Internet is an environment that needs continuous adjustments. Amazon pays attention to the websites mobile version. After reaching a certain point, the business started producing its goods and acquiring new services, which broadened its range of potential markets.

References

Lee, S. G., Trimi, S., & Yang, C. G. (2018). Perceived usefulness factors of online reviews: a study of Amazon.com. Journal of computer information systems, 58(4), 344-352.

Pappas, I. O., Kourouthanassis, P. E., Giannakos, M. N., & Lekakos, G. (2017). The interplay of online shopping motivations and experiential factors on personalized e-commerce: A complexity theory approach. Telematics and Informatics, 34(5), 730-742.

Smith, B., & Linden, G. (2017). Two decades of recommender systems at Amazon.com. Ieee internet computing, 21(3), 12-18.

The main purpose of evaluating a companys performance is to determine the efficacy of organizational strategies, determine the progress attained with regard to attainment of goals, and provide feedback that can be used to improve performance (Attorney, 2007). Feedback obtained from evaluation is used to improve decision making and streamline organizational processes and operations. Several companies use different systems to measure performance depending on the business model they use.

I would use several measures to evaluate the performance of Amazon.com. The first measure would be to determine the level of customer satisfaction with regard to service delivery. Determining customer satisfaction would involve using statistics from the American Customer Satisfaction Index (ACSI), which offers information that gives insights into various organizational aspects (Attorney, 2007). The index shows the level of customer satisfaction with regard to a certain product or service.

This approach would be effective because Amazon is an online company that engages in e-commerce and serves a large customer base. Amazon can also conduct its own customer satisfaction survey to determine whether customers are satisfied with its services. Low customer satisfaction would be a sign of poor performance while high customer satisfaction would be a sign good performance. Amazon operates in the service industry. Therefore, satisfying customers is one of the most important aspects of its success.

Focusing on customer satisfaction metrics in all of its businesses would be an important strategy (Attorney, 2007). Another strategy to evaluate performance involves determining the companys cash flow. Amazon operates in an industry that is highly competitive and that is awash with online and physical retailers that are fighting for a share of the retail industry. Therefore, it is more effective to measure its performance using cash flow than using profits.

High cash flow means that the companys products are selling fast and therefore performance is good (Attorney, 2007). Moreover, high demand for products and services translates into a high cash flow and healthy performance. Another measure would involve determining the progress attained in each of the companys divisions with regard to attainment of goals.

For instance, the company could evaluate the progress of the marketing and administrative divisions. In marketing, the company could look at its market share, sales growth, inventory levels, and quality of products while in the administrative division, factors such as employee satisfaction and turnover could be considered (Attorney, 2007). High employee turnover and low employee satisfaction would signify poor performance.

Evaluation of Amazons supply chain would involve determination of the quality of products and services based on customer satisfaction levels. In addition, evaluating the support, consistency, coverage, and sufficiency of the supply chain strategy would be necessary. The activities of a company should align with the goals of the supply chain strategy (Attorney, 2007). Moreover, the various components of the supply chain should be aligned and compatible for effective provision of services.

The strategy used should address all areas such as supply, technology, planning, marketing, finance, procurement, transportation, inventory management, order processing, manufacturing, and distribution (Attorney, 2007). An effective supply chain aligns these activities and ensures that they are streamlined to avoid fragmentation.

If a supply chain is integrated, then it is effective and will exhibit high performance. On the other hand, if it is fragmented, it will exhibit poor performance. Evaluation of Amazons supply chain would involve determining whether its various business processes and operations are synchronized to fit its supply chain strategy.

Reference

Attorney, A. D. (2007). Performance Appraisal Handbook. New York, NY: Nolo.

Amazon, Inc. is a global company that has developed particularly as a result of acquisitions. For instance, Amazon, Inc. purchased Whole Foods Marketplace in 2017, and the companys revenues are now part of Amazons consolidated financial statements. Amazons corporate structure allows for consolidation by using a hierarchal framework, with varying reporting channels for different subsidiaries. The present paper will apply theoretical information on consolidation to Amazon, Inc. by describing its corporate structure, the consolidation process, and tax benefits resulting from consolidation.

Framework in Use

Amazon, Inc. uses a direct ownership framework, which means that it owns the stock of acquired companies directly. From a consolidated viewpoint, the corporate structure of Amazon, Inc. is hierarchal, with a group of Senior Vice Presidents and Chief Executive Officers reporting to Amazon, Inc. CEO Jeff Bezos (Dudovskiy, 2018). This means that Amazon includes a variety of acquired entities that have independent organizational structures but report to senior officers positioned at the top of Amazon, Inc.s hierarchy.

For example, Amazon Web Services is one of the subsidiaries of Amazon, Inc. The company also has a hierarchal corporate structure, with CEO Andrew Jassy governing various business departments, including Marketing, Engineering, Public Sector, and others. As the CEO of Amazon Web Services, Jassy reports directly to Amazon, Inc. CEO Jeff Bezos (Dudovskiy, 2018). However, Amazon Web Services is considered to be a distinctive line of business, and thus the same pattern does not apply to other subsidiaries.

Another example is Whole Food Market, which was acquired by Amazon in 2017. The company has an independent leadership structure, which can be defined as geographical and hierarchal. John Mackey is the Chief Executive Officer of Whole Foods Market, supported by regional Presidents and global departmental Vice Presidents (Whole Foods Market, 2018). As the company is part of the retail business line, it is likely that its leadership reports to Amazon, Inc.s Senior Vice President in International Retail, who then reports directly to Jeff Bezos. Therefore, Amazon, Inc/ Maintains a hierarchal corporate structure in all circumstances, but the chain of command depends on the line of business of a particular subsidiary.

Consolidation Impact

The consolidation impacts the flow of accounting information into the consolidated financial statement by merging the financial outcomes of the parent company and its subsidiaries. For example, in Amazon, Inc. a consolidated financial statement represents united incomes, sales, revenues, assets, and other financial outcomes of Amazon and its subsidiaries. The consolidation process is usually performed by the IFRS 10 requirements and consists of three key steps.

Firstly, the financial statements of all involved entities are combined into one (Hoyle, Schaefer, & Doupnik, 2015). This entails combining the like items, such as assets, income, and cash flows. Secondly, the parent companys investment into and their share of equity in each subsidiary are eliminated (IFRS 10, 2017). This allows avoiding incoherencies in expenses, investments, and equity as represented in consolidated financial statements. Lastly, intragroup assets and transactions between different group entities are eliminated in full (Hoyle et al., 2015). Thus, if Amazon, Inc. had a transaction with Whole Foods Market after the acquisition, the changes in expenses, liabilities, and income as a result of this transaction would be eliminated from the consolidated financial statement.

The steps described above were designed to ease the consolidation process in different companies by providing a unified framework. However, the application of this framework to practice can differ across companies (Hoyle et al., 2015). For instance, multinational companies would also need to ensure that all subsidiaries conform with unified accounting and reporting standards and use the same reporting currency before beginning the consolidation process.

To improve consolidation, Amazon, Inc. collects financial information of entities based on geographical location before producing a consolidated financial statement. There are three key financial reporting segments evident in Amazon, Inc.s reporting structure: North America, International, and Amazon Web Services. Therefore, the financial information of subsidiary companies would first be merged into segments and then consolidated.

Question C

Consolidation of financial statements could bring significant advantages with regards to income tax. Hope, Ma, and Thomas (2013) reported that in firms who only disclosed financial information in consolidated statements and opted to avoid disclosing geographic earnings, worldwide taxation rates were lower. By consolidating financial statements, companies can achieve various tax deductions. For example, Amazon, Inc. has received tax benefits relating to excess stock-based compensation deductions and accelerated depreciation deductions (2017 Annual Report, 2018, p. 23). Therefore, the consolidation of financial statements enabled Amazon, Inc. to qualify for these deductions and decrease its U.S. taxable income.

Conclusion

Overall, consolidation of financial statements is an important topic that can present numerous challenges to accounting. Amazon, Inc. uses consolidation to provide financial information about the group, including its subsidiaries, as well as to earn tax benefits with regards to income tax. As a multi-national corporation, Amazon, Inc. has a hierarchal structure with various divisions and reporting channels governing its subsidiaries. The example of Amazon, Inc. can be used to exemplify consolidation processes and challenges that apply to similar companies.

References

2017 annual report. (2018). Web.

Dudovskiy, J. (2018). Amazon organizational structure. Web.

Hope, O. K., Ma, M. S., & Thomas, W. B. (2013). Tax avoidance and geographic earnings disclosure. Journal of Accounting and Economics, 56(2-3), 170-189.

Hoyle, J. B., Schaefer, T. F., & Doupnik, T. S. (2015). Advanced accounting (12th ed.). New York, NY: McGraw-Hill Education.

IFRS 10  Consolidated financial statements. (2017). Web.

Whole Foods Market. (2018). Leadership team. Web.

Introduction

The acquisition of Zappos by Amazon is a good example of the complications of combining two companies that have different organizational cultures. Although the merger between the two companies was mostly inspired by developments in the market place, the usual expectation is that the values and cultures of the smaller company are often absorbed by the big one. The Zappos and Amazon case is unique because both companies sought to maintain a certain degree of independence after they merged.

Consequently, within the Zappos-Amazon merger, there is the question of what types of barriers exist in relation to effective intercultural communication. For instance, how is the merger going to affect the deep-rooted organization communication cultures of both companies? One important consideration in the course of this research is that Zappos tremendous growth trajectory has mostly depended on the companys strong culture and insistence on top-notch customer service.

The companys culture is based on the philosophy that when the customers are happy, the employees are happy and the company overall outlook is also good. According to Zappos chief executive officer (CEO), the company is mainly driven by culture. Therefore, the communication professionals of the newly merged Amazon and Zappos should develop a communication strategy based on Zappos former organizational culture that integrates employees into this new organization culture by incorporating intercultural communication because the merger creates a new organizational climate and communication networks.

Background

The complexity of merging organizational cultures is addressed by Tjan in an article where he draws four lessons on culture and customer service based on the actions of Zappos CEO (Tjan, 2010). In this article, the author reckons the need for establishing a company culture early on in the merging process. Therefore, it is the responsibility of the new communication professionals to put in place measures to address the pending merger issues.

This article also outlines the willingness of the management in the course of merging organizational cultures. Core values are noted to be an integral part on any new organizational culture. Another article by Bill Taylor is titled Why Amazon is Copying Zappos and Paying Employees to Quit also has some important connections to the organizations merging organizational cultures. In this article, the author addresses the impact that Zappos company culture has had on Amazon.

In another article, the authors address the process of building high performance cultures by using the Zappos-Amazon merger as an example (Warrick, Milliman, & Ferguson, 2016). This article outlines several key drivers in respect to the successful merging of any two organizational cultures. The last article that is addressed in this case study urges companies to form partnerships through mergers as opposed to integrating their cultures. According to the authors of this article, partnering produces long-term results when it is compared to merging (Kale, Singh, & Raman, 2009).

There are various important concepts that apply to the Zappos-Amazon merger. First, the underlying issue in this merger is whether the two companies efficiently influence each other to create a bigger company value. Furthermore, the merger is expected to gauge if the two companies can align their objectives and grow their long-term goals as one unit. Zappos was founded in 1999 primarily as a company that sold shoes online.

The companys culture is shaped by the companys desire to deliver the best customer service to its clientele. Consequently, the company is known for doing things differently than other companies, a factor that is key to Zappos corporate culture success. Prior to the merger, there were concerns as to whether Tony Hsieh, Zappos CEO would give up on his highly regarded culture in favor of Amazons way of doing things. However, the compromise was to have Zappos operate as an independent identity, with its own organizational culture. The acquisition of Zappos by Amazon was subject to various impending changes in regards to the two organizations communication strategy, intercultural communication, communication networks, and organizational climate.

Rationale

The communication professionals of the newly formed Amazon-Zappos company should base their communication strategy on Zappos prevailing organizational culture because it is part of the companys culture and brand. Therefore, part of the value that Amazon is set to gain from Zappos is the asset that is Zappos organizational culture. Zappos has a unique organizational culture, which is mostly aimed at delivering good customer service.

It is important to note that some of Amazons earlier acquisitions have failed due to abrupt changes in organizational culture. For example, Amazon acquired Endless.com a previously profitable company, which failed because of oversights during the integration of the two companies. Zaremba points out that culture is an important aspect of any organization because it lays the groundwork for other organizational contexts (2014, p. 215). In reference to its past acquisition failures, Amazon was looking to acquire a company that would easily fit into its intercultural communication sphere. On its part, Zappos had thriving intercultural communication policies that were built on the need to understand customers, processes, and businesses.

An article on mergers and acquisitions reiterates the need for multinationals such as Amazon to partner with the companies that they acquire instead of integrating them (Kale, Singh, & Raman, 2009). This article advises companies to avoid the practice of assimilating the businesses that they acquire, and instead allow them to remain independent. This approach also encourages companies like Amazon to retain the top management of their acquisitions.

This is good advice for the professionals of the newly formed Amazon-Zappos entity. If the communication professionals base their new strategy on Zappos former organizational culture, they have a chance to find out early on if their approach is working. The authors of this article refer to this approach as partnering and they claim that the results of this approach have already been proven during the Ulker Groups acquisition of Godiva (Kale, Singh, & Raman, 2009).

The main advantage in using this approach is that if accommodating the culture of the acquired firm is not working, the acquiring entity can gradually integrate the intercultural communication aspects of the two companies. The communication professionals of the resulting entity have to consider the advantages of this simple approach. Furthermore, a strategy that is based on Zappos former organizational culture is the only way of tapping into the proven benefits of this companys intercultural communication abilities.

Another benefit of developing a communication strategy that is based on Zappos former organizational culture is that employees are easily integrated into the new organizational culture even in the context of a new organizational climate. Zarembas guide in reference to multinational expansion recognizes the cultural complexities that accompany activities such as mergers and acquisitions (2014, p. 221).

Furthermore, most of the outlined approaches to multinational expansion are primarily based on a companys ability to utilize effective intercultural communication practices. The goal of any company when seeking to expand is to continue to invest in long-term ventures. In the case of Zappos, Amazon is seeking to enjoy the long-term benefits of combining the two companies. By adopting Zappos former organizational culture, the companys internal corporate culture does not change but only external factors shift. Therefore, Zappos is able to continue to focus on its growth agenda. On the other hand, Zappos success helps Amazon to achieve both its internal and external goals.

The core essence of Zappos organizational culture includes independence and the desire to deliver an all rounded satisfaction for customers, vendors, and employees. This is a broad approach to intercultural communication and it is an asset that is worth preserving in the new acquisition-setup. In the article on building high performance cultures, the authors explore the value of Zappos overall culture (Warrick, Milliman, & Ferguson, 2016).

The article also points that organizational culture cannot be built without the input of the management. Consequently, the involvement of communication professionals in the Zappos-Amazon acquisition is very important.

Another reason why the communication professionals should favor Zappos former organizational culture is that the resulting communication networks are advantageous to employees of the two entities. Assimilation, socialization, and identification are key factors in regards to communication culture (Zaremba, 2014). Furthermore, it is important to note that organizational socialization occurs in stages. In the light of these facts, the communication professionals are expected to handle the transition in organizational culture by favoring Zappos culture. This approach ensures that the stages of organizational socialization are taken into account in the course of formulating a new culture. In an article that appeared in the Harvard Business Review, the author tracks the results of organization socialization between Zappos and Amazon (Taylor, 2014).

According to the author of this article, Amazon is imitating Zappos mode of socialization by offering employees money to quit working for the company. This is a good manifestation of transitions in organization culture. Imitating Zappos gives Amazon a chance to evaluate the success of various forms of organizational socialization. The evidence from resulting modes of socialization because of merging organizational cultures shows that the communication professionals are on the right path by adopting Zappos former organizational culture.

Conclusion

The Amazon and Zappos case study provides an example of what transpires when two different organizational cultures come into contact. The recommendation is for the communication professionals to favor Zappos former organizational culture in the new set up because this approach is the most effective one. The goal of any acquisition or merger is to combine strengths in order to create more solid entities. In the case of Zappos and Amazon, the latter should recognize the formers organizational culture as part of the acquired assets. Retaining employees is yet another reason why the communication professionals should favor Zappos former organizational culture. All available evidence indicates that this is the most viable approach in the Zappos-Amazon scenario.

References

Kale, P., Singh, H., & Raman, A. (2009). Dont integrate your acquisitions, partner with them. Harvard Business Review. Web.

Taylor, B. (2014). Why Amazon is copying Zappos and paying employees to quit. Harvard Business Review. Web.

Tjan, A. (2010). Four lessons on culture and customer service from Zappos CEO, Tony Hsieh. Harvard Business Review. Web.

Warrick, D. D., Milliman, J. F., & Ferguson, J. M. (2016). Building high performance cultures. Organizational Dynamics, 45(1), 64-70.

Zaremba, A. J. (2014). Crisis communication: Theory and practice (3rd ed.). New York, NY: Routledge.

Executive Summary

Amazon.com is an online retail company that has been in existence since 1994. Over the years, Amazon.com has been able to achieve tremendous online retail success, but recent years have seen the company struggle to distinguish itself in the market (due to increased competition). However, this paper notes that Amazon.com still has several key competencies that set it above its competitors.

These key competencies are part of the companys corporate strategy, which is to be consumer-centric. The concept of consumer-centrism is part of Amazons three-faced corporate strategy, which is informed by the need to offer goods and services at the customers convenience and the need to offer a wide product breadth line. This paper explains that the need to offer a wide product line forms Amazons diversification strategy because the company has strived to reinvent itself through different product offing.

This paper also explains that Amazons value chain is under a strong influence from the company because Amazon controls most of the funds in the entire system. Comprehensively, this paper recommends that Amazon should be wary of the competitive influence, caused by a widening product portfolio. Consequently, the company should differentiate its products from its competitors.

Introduction

Amazon is an online retail shop which features in the fortune 500 companies (Byers 2006, p. 1). The company offers a platform where customers purchase goods online. Mainly, the site started as an online bookstore, but its products were diversified to include CDs, MP3-downloads, computer software and the likes. Amazon started in 1994, but it went online in 1995, under the leadership of Jeff Bezos, its founder (Byers 2006, p. 1).

Amazons headquarter is in Seattle, Washington. Its operations in the US are part of its two-faced market strategy, which is divided into its North American market and international markets. Regardless of the market locations, Amazon has strived to ensure it focuses on selection, price, and convenience as its main elements of the operation. The companys website design is planned to allow for third-party sales across a variety of product categories. The website design is also designed to allow for easy use of website tools for its three-set of clients (consumers, sellers and enterprises) (Byers 2006, p. 1).

Amazons international presence is informed by its diversification strategy, where the company operates different websites for different locations. For instance, Amazon has a different website for India, US, UK, Japan, China, Germany, France, Italy (and similar markets) because it aims to appeal to the local population using different marketing strategies such as the use of local languages. Amazons international markets account for over 40% of the companys revenues (Robinson, 2009, p. 3).

As of 2008, Amazons market capitalization was estimated at $29.4 billion. Within the same year, Amazon employee base was estimated at 20,700 employees (most of whom work in the IT and sales departments) (Robinson, 2009, p. 3). During the course of Amazons business cycle, Amazon suffered significant setbacks, including a low investor (shareholder confidence) and a burst in the technology bubble (Robinson, 2009, p. 3).

So far, the company has been able to weather most of these challenges, including the recent 2007/2008 global economic crisis where the company was able to chart its way into production. Amazon has achieved tremendous business growth because of its vision to be a customer-centric organization. The companys CEO believes that it is in the companys interest to meet consumer demands by asking consumers what they want (Shepard 2006, p. 1).

He further reiterated that, for Amazon to achieve increased growth, it needed to appeal to every consumer need, including designing the online store to appeal to the needs of every customer. For instance, Bezo explained that, if the company had ten million customers, it needed to build ten million stores to meet the needs of each customer (Byers 2006, p. 14).

This paper explains Amazons strategy during the period of 2007 to early 2010 by analyzing its strategic capabilities. Emphasis will be laid on assessing Amazons diversification strategies (going forward) and its value addition framework. Also, the factors that account for Amazons sustainability will be analyzed, and its position, viz-a-viz its competitors assessed. This analogy will show Amazons current and future market positions.

Amazons Strategy (2007-2010)

Amazons business strategy during the period 2007 to 2010 has been multifaceted. In the early periods of Amazons growth, there was minimal competition in the online retail market, and therefore, Amazon was operating in a relaxed business environment. In the early stages of the companys growth, there was a strong focus on improving the companys communication platform because Amazons CEO, Bezo, believed that, the future of online retailing laid on improved and continuous communications (Whittington and Scholes 2011).

It is from this ideology that Amazon was named Amazon because the companys founder believed that the company would become one of the longest online retail chains (through word-of-mouth communication). The name (Amazon) was therefore borrowed from Amazon River, which is among the longest rivers of the world (Sherman 2001, p. 2). In reference to its corporate strategy, Bezo said: A brand for a company is like a reputation for a person. You earn reputation by trying to do hard things well (Byers 2006, p. 18).

As a result, the importance of branding was highly recommended as an area of core business advantage. Amazon has, for a long time, used its strong branding campaigns to build a good name in the online retail market. However, with the proliferation of online retail companies, Amazon has had to redefine itself as a leader in the online retail market, since it was among the first companies to venture into the business in the first place.

In its redefinition campaign, Amazon has shifted its corporate strategy from being reputation-driven (branding-driven) to being consumer-centric. This strategy has been informed by the need to provide customers with an unforgettable shopping experience. Goods sold within this framework have been presented within a wide array of product categories. This strategy has been a cyclic phenomenon where customers have increased their frequency of visits to the Amazon website, thereby increasing customer traffic (Sherman 2001, p. 2). This increase in customer traffic has resulted in increased innovation due to an increase in innovative ideas and resources. This shift in strategy has also been reflected in a change of business logo to reflect a change in Amazons business offing.

In realizing Amazons business vision (to be the largest online retail store); three areas of core business competencies are identified to drive Amazons vision. These are selection, price and convenience (Whittington and Scholes 2011). However, these competencies have been designed within the framework of innovation. Within the concept of selection, Amazon has strived to provide a wide array of products, including Books; Movies, Music and Games; Digital Downloads; Electronics and Computers; Home and Garden; Toys, Kids and Baby; Grocery; Apparel, Shoes and Jewelry; Health and Beauty; Sports and Outdoors; and Tools, Auto and Industrial goods (Whittington and Scholes 2011, p. 73). In recent times, Amazon has focused on software development and cloud computing services as areas of key competence.

With regards to its price concept, Amazon has strived to be a leader in offering quality products at minimal costs (Thompson 2001). Though Amazon offers its shipping services to selected markets, it has been able to do so at no charge at all (plus a guarantee of on-time delivery) as part of its price concept. From this strategy, Amazon has been able to be a leader (in price innovation) within the online retail market (Whittington and Scholes 2011).

With regards to its convenience framework, Amazon has been able to please its customers by meeting their needs and wants. To do so, Amazon has invested in intense market research to determine customer needs and wants. This market research has been further complemented by a feedback program where customers have an online platform where they can share their sentiments regarding the entire online buying experience (and the products offered within the same platform). For instance, Amazon has, in the past, invested a lot of money in gaining customer reviews on almost all its products (Thompson 2001). The three pillars to Amazons innovation (price, convenience and selection) have, however, been informed by the need for the company to stay innovative. This need has been further motivated by Amazons need to be relevant in the future.

Amazons innovation strategy has also been informed by studies cited in Johnson (2011) which explain how starting a successful business (and operating it well) is no guarantee for its sustainability (in the next 100 years or even two decades). Amazon has used such information to transform its corporate strategies. For instance, its shift in corporate strategy was attributed to being the reason for emerging successfully from the dot com bubble of the 90s (Thompson 2001).

During this period, Amazon reported that it had a profit base of $4 billion, but by the close of the year 2008, Amazons profit base was about $20 billion (Johnson 2010, p. 3). Observers explain that this tremendous performance can be solely attributed to Amazons regard for transformational growth as its main corporate strategy. This unabashed embrace of transformational growth strategy saw Amazon build a business model that was not only focused on embracing the changing tastes, preferences and values of consumers but also, changing product designs (Johnson 2010, p. 3).

However, to meet the changes in consumer taste, preferences and needs, Amazon invested in a new web platform that is deemed to be the seventh-largest in the world (Johnson 2010, p. 3). From this platform, the company set up lab126 that saw Amazon produce a new technological product (Kindle e-book reader) which got most of Amazons competitors worried about their future sustainability (Amazon.com Inc. 2011). This innovation elevated Amazon to become an original equipment manufacturer because the new innovation was wrapped in a seamlessly integrated iTunes-type digital media platform that combined both transaction and subscription-based content delivery (Amazon.com Inc. 2011).

Before coming up with this new innovation, Amazon had to partner with content providers to produce an unrivalled product in the online retail market. This product sold more than 500,000 units because of its appeal to provide customers with a convenient e-book reading platform (Amazon.com Inc. 2011). Amazon has also ventured into offering its customers an unforgettable experience of reading periodicals and newspapers through the same platform. This focus on transformational growth saw the company change its product offing from a pure books sales platform to a dynamic array of consumable products that can be shipped.

From this analogy, Amazons strategic capabilities tend to spread on some key strategic competencies. These competencies are a strong global brand, strong focus on research and development, a customer-centric vision, product diversification and a strong focus on technological innovation (Amazon.com Inc. 2011). The strong global brand may be attributed to Amazons initial entry into the online retail brand market. Amazon was a pioneer in this field, and it is still deemed to be among the largest online retail stores. This key competency elevates Amazon above most of its competitors and puts it at an advanced position of realizing its corporate strategies.

A strong focus on research and development is also another area of key competence that elevates Amazon to be one of the best in the online retail market. This focus on research and development has caused market jitters through the invention of new products and strategies. For instance, as explained in previous sections of this report, the production of the Kindle e-book reader caused market ripples. This product was developed from the intensive investments in research and development undertaken by the company.

Complementary to the focus on research and development is the strong emphasis on technological advancement as the main criterion for undertaking research and development initiatives. Here, it is correct to note that, most of the research and development initiatives undertaken by Amazon are done through the latest technology, and they are equally aimed to produce the best technological products of the day.

Also, close to Amazons research and development focus is the close eye that the company has put on consumer tastes and preferences. This competency acts as a guideline for research and development initiatives undertaken by the company because Amazon has tried to tailor its strategies and develop products that meet the needs of its customers. From this standpoint, Amazon is capable of producing valuable products in the online retail market because it has a strong focus on customer needs. This competency improves its chances of realizing its corporate strategy.

Diversification Strategies

Amazons diversification strategy is informed by the companys vision to be the largest online product selection. This vision has seen Amazon divest from a pure bookselling model to include several other products. Currently, Amazon has more than 18 million products in only 14 categories, thereby pitting it to be among the largest product selections in the online retail market (Sherman 2009, p. 2).

Sherman (2009) explains that Amazon is one of the only major Web sites where one can order a hammer, a lawn chair, a yo-yo, and a best-selling novel all at the same time (Sherman 2009, p. 5). However, not all the companys products are enlisted in its distribution system; only about 16 million products are in the distribution system. Apart from these product diversification strategies, Amazon has also invested in product innovation and cloud computing services. This diversification strategy has made Amazon look like a conglomerate. Other companies such as Google have adopted such a strategy (of core business diversification) because they have shifted from their areas of core business competence to other areas of business (which they have never ventured into).

For instance, Google is known to be a leader in the online search engine business, as its main area of business competence, but as years of profitability passed, the company ventured into the development of online applications (an area of business competence that it had very little experience in) (Sherman 2009, p. 2). Amazon seems to have adopted the same diversification strategy, with regards to its production of the Kindle e-book reader, because the company is mainly a virtual retail company, but it ventured into the production of physical applications for online use.

However, Amazons diversification strategy is unique to other businesses of the same league because most of its auxiliary business ventures are related to its core business. For instance, the Kindle reader is a clever addition to the companys online book sales strategy because it facilitates the convenience of book reading.

The relation between new innovations and Amazons core business competency has mainly been motivated by the need to improve the online infrastructure for doing business. The companys diversification plans are therefore also motivated by the intention to leverage its investments (as seen through Amazons venture into cloud computing to reduce business costs and take advantage of the possibilities that cloud computing offers virtual companies).

This is the same ideology that saw Amazon move from (exclusively) selling online books. The move to sell privately labelled goods has also been part of Amazons diversification strategy. Historically, this strategy has worked well for other companies, including Best Buy, Target, and Trader Joes (Sherman 2009, p. 2). Through this strategy, Amazon has experienced higher returns than its conventional retail channels, and equally, the new sales platform has also acted as a good forum where Amazon gets customer feedback to inform its product innovation strategies.

These diversification strategies have made many observers be very pessimistic about Amazons future profitability because each product innovation and diversification stint takes numerous resources and management skill. Moreover, such diversification strategies are not often perceived to be intrusions into other business competencies. For instance, the diversification into product manufacturing processes come with new design, engineering and management responsibilities that, companies often overlook. In fact, business processes such as engineering and manufacturing, may completely change the entire structure of a business, such as Amazon, which is an exclusive virtual company.

Businesses extensions are also known to go beyond what a pure reseller does and therefore, the likelihood that a company may incur more operational cost is high. Moreover, observers warn that such extensions may bring a new scale of customer support and service issues which companies may not be able to handle (Sherman 2009, p. 2). Though Amazon has (so far) not shown any signs of being affected by the dangers of business extensions, concerns are still rife (among investors) that, the companys management should be wary about the dangers of over-diversification. Sherman explains that common sense suggests there is only so long that, companies can continue to move in completely different directions at the same time (Sherman 2009, p. 6).

Value Chain

In understanding Amazon.com, we have to comprehend the fact that the company is a virtual company. As such, the company is subject to retail internet platforms. To understand the companys value chain, this section of the paper highlights the processes that take place when a customer places an order with the company. This will be an overview of the companys value-chain system.

Whenever a customer places an order with Amazon, the customer will be required to give their payment details (Scribd 2011, p. 1). Often, this process includes the submission of a credit card number. Amazon thereafter initiates contact with the credit card company to verify the payments. After verification, the order is normally transferred to the supplier. The supplier then confirms that the product is ready, and Amazon takes the initiative of contracting a delivery company such as Fed Ex or DHL to deliver the goods.

This process seems simple, but it is interesting for two reasons; from the entire ordering and delivery process, we see that four entities are present in the entire value chain. These entities are Amazon, the credit card company, the supplier and the delivery company (for instance, Fed Ex or DHL). From this analogy, it is crucial to observe that, there is no contact of an Amazon employee in the entire value chain process.

This lack of contact occurs, although the customer pays for the goods through Amazon; the goods are delivered using an Amazon logo, and most interestingly, the customer paying for the good does not contact the supplier (who is often the owner of the goods sold). Amazon, therefore, has a very strong influence on the value chain system because it determines the flow of money. This value chain system is depicted in the following diagram.

Competitor Analysis

As mentioned in earlier sections of this paper, Amazon never used to have so many competitors. However, with the expansion of Amazons product offing, many websites are offering the same customer experiences as Amazon. Some of these online competitors are companies that provide digital content to their customers. Currently, Amazons main competitor is e bay. E bay has not been able to achieve the high sales revenue reported by Amazon, but when the two companies are compared in terms of their net revenues, E bay has better postings (Scribd 2011, p. 1).

Comprehensively, Amazons competitors can be divided into six categories: physical world retailers, publishers, vendors, distributors, manufacturers and producers of Amazons products (Whittington and Scholes 2011, p. 73). These competitors are some of Amazons direct competitors.

Amazons indirect competitors include media companies, web portals, comparison shopping websites and web search engines (Whittington and Scholes 2011, p. 74). Companies that provide e-commerce services are also major competitors to Amazons business sustainability because their business processes are similar to Amazons. Similarly, companies that provide internet infrastructure and other computing services are also major competitors of Amazon because some of their services infringe on Amazons current or potential market shares. For instance, Amazons venture into cloud computing is threatened by companies that provide internet infrastructure.

Also, since Amazon ventured into the web infrastructure industry, it has been at crossroads with other existing market participants such as Google and Apple because their market shares have been traditionally centred in the web infrastructure industry.

Comprehensively, it is established that; for online retail companies to command a strong market share, they ought to increase their existing product line breadth (Scribd 2011, p. 1). However, many companies have adopted the strategy of venturing into emerging markets and developing new products. Regardless of the strategies adopted by various online retail companies, there is a strong agreement that, an emphasis on product line breadth and establishing a strong geographic presence, are some of the main factors distinguishing one competitor from the other. Based on this framework, current statistics show that e bay is Amazons strongest competitor because it has a presence in 29 geographic locations, and equally, its products are categorized into 22 categories.

Amazon trails these statistics because it is estimated that it has a geographic presence in about seven geographic locations. Its products are also estimated to fall within 14 categories (Simmonds 2011). To compete with e bay, Simmonds (2011) observes that, Amazon needs to increase its geographic presence product categories. However, Sherman (2009) notes that increasing the companys product categories is expected to complicate Amazons business model, thereby posing a risk to the growth of the companys profit margin. Nonetheless, based on product line breadth and geographic location, the table below shows Amazons position (viz-a-viz its competitors).

Geographical scope

Product line breadth

From the above competitor analysis, we see that, Barnes and Noble. Com is Amazons main competitor when the book sales market is analyzed. Also, we can see that Amazon has a wider product portfolio, even though Barnes and Noble.com pose a stiff competition to Amazon (in the lifestyle goods market). From the same analysis, we also see that Wal-Mart poses a stiff competition to Amazon when the pharmaceutical, printing service market and the contact lenses market is considered (though both products have similar market dynamics and an almost similar pricing framework) (Simmonds 2011).

The presence of physical goods stores by some of Amazons competitors, such as Wal-mart and Tesco pose a real challenge to Amazon because the presence of physical stores is a competitive advantage over Amazon. E bay also has a strong competitive advantage over Amazon because of its strong geographic presence and product line portfolio (comprehensively, these competitor strengths pose a big threat to Amazons future sustainability).

How to Overcome Competitive Pressures

Amazon faces stiff competition in almost all its core business sectors. This competition is mainly attributed to the companys diversification strategy, which has seen Amazon infringe in other companies business sectors. However, for Amazon to overcome the competitive pressures, it needs to differentiate its products in the market. This strategy is especially vital for Amazon because the online retail market is crowded with many products from other companies. This product differentiation strategy will make Amazons products more attractive to its customers. Amazon should, therefore be able to demonstrate how its products are unique to its competitors and how its products offer a better value preposition (compared to its competitors) (Beath 1991, p. 1).

Conclusion

Amazons strategy to be consumer-centric is a strong advantage to its corporate strategy. However, weighing the companys core competencies and areas of key weaknesses, it is crucial for Amazon to distinguish its products in the market. This strategy, coupled with the companys product diversification strategy, is set to make Amazon stand out as the best online retail company.

References

Amazon.com Inc. (2011) The Kindle Tablet. Web.

Beath, J. (1991) The Economic Theory of Product Differentiation. Cambridge, Cambridge University Press.

Byers, A. (2006) Jeff Bezos: the founder of Amazon.com. New York, The Rosen Publishing Group.

Johnson, M. (2010) Amazons Smart Innovation Strategy. Web.

Robinson, T. (2009) Jeff Bezos: Amazon.com Architect. New York, ABDO.

Scribd. (2011) Amazon.com. Web.

Shepard, A. (2006) Aiming at Amazon: The NEW Business of Self Publishing, Or How to Publish Your Books with Print on Demand and Online Book Marketing. New York, Shepard Publications.

Sherman, E. (2009) Amazons Dizzy Diversification Dance. Web.

Sherman, J. (2001) Jeff Bezos: King of Amazon. New York, Twenty-First Century Books.

Simmonds, P. (2011) Amazon.com. Web.

Thompson, J. (2001) Understanding Corporate Strategy. New York, Cengage Learning EMEA.

Whittington, J. & Scholes, K. (2011) Exploring Strategy: Text & Cases. Essex, Pearson Education Limited.

Amazon is a transnational company widely used globally that deals with e-commerce, computer clouding, and artificial intelligence. It is ranked among the leading companies in the United States due to its growing economic influence. The company is based in Washington and was founded by Jeff Benzos in 1994 (Furgang, 2018). It started as an online book store but later extended to dealing with electronics, toys, foods, and other several varieties (Majed et al., 2018). It is a company that invests and focuses on technological innovations. Amazon has also provided platforms for streaming and downloading music such as Amazon Music and twitch which have been greatly received by the people. The company has, however, been criticized due to its high technology surveillance and its hyper-competitiveness in the market sector which has led to downfall of other companies in the same venture.

My interest in Amazon as the company I want to practice my managerial skills in is greatly influenced by the growth and success of the company. Over the years, I have seen Amazon from just a bookstore to dealing with all varieties of goods and that could only be possible due to the presence of a good managerial organization (Bharadwaj, 2019). Amazon has a hierarchical management organization which has led to the making of good decisions because all consulting and approval at different levels reduces making mistakes. Maintaining relevancy more so in the technological sector has cost the company a lot and good management has influenced the success (Wankhede et al., 2018). I am so sure once I join Amazon, I will get the skills I need to practice my profession as well as advance my problem-solving skills. Being in a big company is a dream of all graduates as it helps them to open their eyes and get a different approach to the market. My interest is further boosted by Amazons urge to do innovations and thats a sector I have always wanted to have some knowledge about as it is very essential in the development of any firm or organization.

Amazon adopted the hierarchical management structure which contains the chief executive officer and three vice presidents who make the vital decisions of the company. The company has developed various management features to help them cope with the adversely changing market patterns. The hierarchical management pattern was adopted as a result of its growing size they had to separate the management where the senior management could only be involved in making vital decisions, therefore, reducing workloads (Kwarteng, 2020). Unlike many companies with hierarchical management, Amazon has remained too flexible so that it can adapt to the adversely changing patterns of the external markets. Stability in its top management has helped the company to cope with the waves of the market changes as well as avoiding changing the management team has helped in the maintenance of the same culture.

Amazons management culture has always been the cultivation of new standards through the application of technological innovation. Amazons culture has always been the adoption of strategies that will impact the positive development of successful ideas (Montejo et al., 2018). Amazons management has also been on the lead to promote successful ideas to the workers as well as pushing them to attain their target which has helped in maintaining the successful culture over the years. Amazons application of culture, strategies, technology, and execution concepts as outlined by a former executive, John Rossman has helped in propelling forward.

Amazon has been a developed and successful company that does not need a lot of changes however, I would like to address some recommendations that the company needs to practice. The organization should improve their market strategies by focusing on countries that have not adopted online shopping (Al-dweeri et al., 2017). The company should also put in practice the backward integration of the products from other companies so that customers can get the best. And finally, Amazon should work on developing physical stores in the markets to improve its brand.

References

Al-dweeri, R. M., Obeidat, Z. M., Al-dwiry, M. A., Alshurideh, M. T., & Alhorani, A. M. (2017). The impact of e-service quality and e-loyalty on online shopping: Moderating effect of e-satisfaction and e-trust. International Journal of Marketing Studies, 9(2), 92-103. Web.

Bharadwaj, S. (2019). The engineering behind a successful supply chain management strategy: An insight into Amazon. International Journal of Scientific and Technology Research, 8(10), 281-286. Web.

Furgang, A. (2018). Jeff Bezos: Tech entrepreneur and businessman. Onslow Publishing, pp. 10-12.

Kwarteng, E. M. (2020). Management of innovative projects of the enterprise (on the example of Amazon. com). Web.

Majed, S. Z., Nuraddin, S. H., & Hama, S. V. S. (2018). Analyzing the Amazon success strategies. Journal of Process Management, 6(4), 65-69. Web.

Montejo-Kovacevich, G., Hethcoat, M. G., Lim, F. K., Marsh, C. J., Bonfantti, D., Peres, C. A., & Edwards, D. P. (2018). Impacts of selective logging management on butterflies in the Amazon. Biological Conservation, 225, 1-9. Web.

Wankhede, K., Wukkadada, B., & Nadar, V. (2018). Just walk-out technology and its challenges: A case of Amazon go. In 2018 International Conference on Inventive Research in Computing Applications (CIRCA), pp. 254-257. Web.

Amazon is one of the globes most influential corporations trading all categories of goods and services over the internet. The organization is known mainly for its online shop, but in pursuit of growth, the company has begun to dominate more than e-commerce (Arnett et al., 2018). Three years after its founding, the shop had expanded its services and started marketing music records and, a few months later, all sorts of video products.

Nowadays, the Amazon service offers 34 product categories, from Kindle e-books and home appliances to childrens toys, food, and clothing. The list of services is diverse, hence the size of the company and its operational staff, which managed to take all the critical positions on the Internet market (Arnett et al., 2018). It is the largest provider of cloud services and intelligent home systems, a clothing designer, an advertising platform, a television and film producer, a book publisher, and the owner of a crowdsourcing platform. Therefore, Amazon has become the company that allows anyone to market almost anything using its platform.

List of Competitors

By offering low prices and fast delivery, Amazon has displaced multiple large chains from retail, and thousands of small family businesses (Arnett et al., 2018). Nevertheless, the company has several major competitors, including:

1. Alibaba
2. Walmart
3. eBay
4. Etsy
5. Wayfair Inc.
6. Costco

Values and Mission Statement

Amazons mission is to be a customer-centric enterprise globally and improve service standards steadily. Companys core value is to start with the customer and work backward (Arnett et al., 2018). This self-proclaimed obsession with how the client thinks and feels is designed to create profound and lasting trust. Moreover, Amazon expects all its employees to comprehensively manage the entire company, not solely what their team has been authorized to accomplish (Arnett et al., 2018). Employees ought to think about how their decisions and work will influence the whole enterprise and organizational culture and make sure they create long-term value, not short-term development. Innovation is another value and key to the success of all Amazon employees (Arnett et al., 2018). The company mentioned welcome people who are ready for novelty and passionate about what they do.

Recent News Summary

In March, US online retailer Amazon could buy Hollywood movie studio Metro Goldwyn Mayer (MGM). Regulators in the US and Europe have yet to decide whether Amazons $8.45bn deal for the nearly 100-year-old studio violates antitrust laws. According to CNBC, it remains unclear exactly when the retailer will be able to finalize the agreement as it relies on the FTCs decision (Palmer, 2021). Amazon intends to retain the concept of Metro Goldwyn Mayer and maintain its film production operations. Its owner plans to increase the resources to create shows in television format and reimagine with the film librarys MGM talent team.

Moreover, Nike and Amazon consider buying Peloton, a US-based fitness equipment company. According to the latest data, discussions occur within the corporations; there have been no talks with Peloton on the subject. According to the CNBC sources, Nike had explored the possibility of acquiring the company in 2019, before Pelotons offering on the stock exchange, though it abandoned the idea (Palmer, 2021). Nevertheless, the Peloton had not yet decided whether it would consider its acquisition.

References

Arnett, J., Goldfinch, B., & Chinta, R. (2018). Multi-dimensional nature of innovation at Amazon. International Journal of Business Innovation and Research, 15(1), 1-13.

Palmer, Annie. (2021). Amazon to buy MGM Studios for $8.45 billion. CNBC. Web.

Introduction

Budget is an important component of a companys financial structure and may aid in its growth. Debt often has cheaper funding costs than stock, making it an appealing alternative for CEOs. However, a firms cash might be harmed due to interest commitments. When corporations employ loan capital for commercial operations, equity shareholders can keep the extra profit earned by the borrowed capital. This paper was written with the aim of studying Amazon from the side of stocks and financing.

The Long Term Debt of a Company

Amazon committed $6 billion in debt, and many people feel the sky has dropped. There should be nothing wrong with bank loans; in fact, it is preferable to equity capital. Financial leverage demonstrates Amazons trust in its expenditures and suggests that the companys shares are undervalued. Amazon equities have been assailed on occasion by short-term outcomes that appear to have underwhelmed shareholders. The debt to equity ratio in 2021 was 0.94; a high debt ratio often indicates that a corporation has been active in funding its expansion with debt (Amazon, 2021). As a result of the higher interest expenditure, profitability may be erratic. Amazon.coms largest debt ratio for the last 13 years was 255.00.

The Policy of a Long-Term Financing

Amazon is clearly showing a successful example of long-term funding performed in the form of debt financing and long-term credits. The companys profits significantly exceed its debt, despite the post-pandemic changes in the commodity market. The company has $ 32.93 billion long-term debt with a rather low debt-to-equity ratio (Yahoo, 2021). This position helps the business to relate to the market well and preserve a stable position.

Changes Being Made to the Capital Structure

While the high expense of establishing regular one-day delivery has had a significant negative impact on Amazons bottom line, the business has stated that the model is beginning to pay off, noting that tens of millions of goods are already ready for one-day delivery. Amazon is constantly working on getting immunizations to front-line staff as quickly as feasible. The corporation is actively monitoring the availability of COVID-19 vaccinations worldwide, campaigning on its workers behalf, and collaborating with international health doctors, authorities, and medical groups to speed immunization campaigns.

The Companys Current Stock Price; 52 Week High and Low

The price of a stock represents its current worth to sellers and buyers. The underlying price of the investment might be greater or lower. The stock investment aims to find stocks that are presently cheap by the marketplace; Amazons current stock price is $3,385 (Marketwatch, 2021). The 52-week high/low is the maximum and minimum value at which a security has exchanged over a one-year timeframe and is used as a technical indicator. The 52-week high/low is calculated using the safety closing price; for Amazon, it is $3,773.08/$2,881.00 (Nasdaq, 2021). Amazon has never paid dividends to its investors, and this has been the case from the companys start.

Dividends Paid by the Company

Amazons main promise to investors has always been the companys potential for corporate development and expansion into new areas. At this point, owners can sell a portion of their holdings for a profit. Amazons (AMZN) TTM dividends payment is $0.00 as of December 02, 2021, and Amazons present dividend is 0.00% as of December 02, 2021 (Macrotrends, 2021). Until far, Amazons absence of a dividend has not harmed investors, as the company has been a top growth stock. Amazon stock has returned around 32% each year over the last ten years. However, due to the lack of dividend distribution, Amazon may not be an appealing alternative for revenue shareholders.

The Overvaluation of the Stock

Another key valuation statistic is the price-to-sales proportion, which is especially essential for unsuccessful firms and growth companies. Amazons PS ratio is 3.8, which is not precisely a steal but is in line with the average overall (Yahoo, 2021). Amazons stock appears to be reasonably overpriced. It is even nearly 150 percent higher than its retail cycle industry rivals, who have an average projected profits multiple of 20.2 (Yahoo, 2021).

Conclusion

Summing up, during the pandemic, the Amazon company behaves like a real major player in the market and does not become embarrassed by maintaining its position and financial characteristics. Competent long-term financing and focus on holding low debts ratio keep the company at the top of the product market. The companys current stock price and evaluation of the capital also present good statistics and indicate the effectiveness of the operation.

References

Amazon. (2021). Amazon.com, Inc.  Annual reports, proxies, and shareholder letters. AboutAmazon. Web.

Macrotrends. (2021). Amazon  50-year dividend history | AMZN. Macrotrends. Web.

Marketwatch. (2021). Amazon.com Inc. Marketwatch. Web.

Nasdaq. (2021). Amazon.com, Inc. Common stock (AMZN). Nasdaq. Web.

Yahoo. (2021). Is Amazons stock overvalued or undervalued? Finance.Yahoo. Web.

Summary

Amazon, the worlds biggest e-commerce brand established by Jeff Bezos, was founded in Washington in 1994 and again in Delaware in 1996. Its website was launched for the first time in 1995. In addition to being a worldwide e-commerce brand, Amazon is also a prominent cloud player and is strengthening its position in the cloud business. Clients have always been at the center of Amazons corporate strategy, and this strategy has led the company to success. The E-commerce sector has become increasingly competitive, and Amazon has maintained its consumer focus in order to remain competitive. Moreover, the company has increased its involvement in innovation and research in order to give clients a better overall experience.

Amazons Vision, Mission, And Strategy

Customer Service

Amazon has worked hard to achieve its vision and mission objectives through improving customer service. The business offers a diverse range of things from which customers may choose, including apparel, books, music, cuisine, robots, and a movie database, among others (Lincoln & Andrew, 2018). Amazon restructured its online stores to cater to each customers choice by introducing the your store service, which has been crucial in easily offering services at affordable prices by leveraging economies of scale (Sadq et al., 2018). In addition, Amazon created the A9 ranking system, which gives customers an easier product search experience. Furthermore, the organization uses a large pool of reviews and ratings. The reviews are an important part of the Amazon purchasing experience. Through participative labor, they instill a shared approach to purchasing, resulting in a social group that provides end customers with a sense of belonging.

Ethical Standards Towards Customers and Employees

Additionally, Amazon uses ethical standards for its consumers and staff in order to fulfill its objective and mission. According to the first guiding guideline, Employees must follow applicable laws, rules, and regulations at all times (Williamson et al., 2022). Furthermore, the group opposes sexual harassment and discrimination. Amazon requires vendors to offer accurate product information to customers while also respecting the reviews and ratings of other sellers. Moreover, vendors should erase consumer data after transactions and prevent sending unwanted messages to customers. Amazon workers are also subject to conflict of interest, insider trading, bribery, and price-fixing standards. The organization offers a secure, healthy, and clean working environment (Williamson et al., 2022). Workers are responsible for ensuring such circumstances by adhering to the organizations safety guidelines.

Amazons Competitive Advantage

Amazon has three main strategies which lead to competitive advantage firstly, cost-leadership, customer differentiation, and focus strategy. The first approach centers on providing products of the same quality at a lower price than the market. The second revolves around delivering more options than rivals, while the third one is targeted at niche clients by combining the two methods. In addition, Amazons values have a positive impact on competitive advantages. The company has two strong values: customer satisfaction and operational frugality (Jain, 2021). These two elements support Amazons operational strategy to obtain and maintain an effective competitive advantage while enhancing the performance of its staff and the business. Due to its cost-effective strategy of paying its staff a lower basic income than its rivals, it spends significantly more on company growth and branding with the money it saves.

The corporation, on the other hand, keeps its employees loyal by distributing company stock to them. By doing so, it hopes to signal to workers that when the firm benefits or earns a profit, the staff will also benefit or earn a profit through the shares. Amazons strategic objective is to target numerous categories using technology and information. It employs segregation, novelty, and expansion via alliances. It emphasizes increasing sales volume while reducing expenses internally. Amazon has created an organization that is more difficult to assault. If Amazon is successful, other e-commerce companies may follow suit in the future. Amazons ambition was to be the worlds largest bookshop, but it has now evolved into the worlds largest collection. It is the worlds first and most successful internet retailer.

Amazons Competitors

One company stands out above the others when it comes to e-commerce and online retail behemoths: Amazon. It is reasonable to wonder if Amazons competitors are still rivals, given its unmatched advantage in logistics, transport, distribution, and general technology advancement. Despite its complete control, Amazon only sold roughly half of all items purchased online in the US last year (Sadq et al., 2018). Amazon is up against a plethora of other online businesses that are vying for even a little slice of the vast and expanding e-commerce pie. Companies like Google, eBay, Apple, Walmart, Alibaba Group, and Costco Wholesale are some of these rivals (Sadq et al., 2018). These rivals are the driving force behind the fierce market competition.

Strategic Thinking

Amazon is an example of a large corporation that has never shied away from strategic thinking. Instead of just selling currently accessible items, the internet empire invests in the future of fledgling enterprises through technology on a regular basis. For example, the Amazon Web Services Pro-Rata Program, which was established in March, connects companies with investment possibilities from family offices and venture capitalists (Hashemipour & Ali, 2020). Lyft and Slack are among the programs success stories now that it is more than a decade old.

Amazon Web Services (AWS), the company behind this introductory program, is more than a decade old and delivers on-demand cloud computing platforms to people, businesses, and governments on a metered pay-as-you-go basis. Companies may wish to follow Amazons lead and commit to long-term initiatives as well. Of course, this path is not always sunny: such businesses may confront organizational and, in some cases, governmental pressure. However, the potential rewards for these daring renegades are huge. With large corporations such as Blockbuster and Polaroid closing their doors  either permanently or temporarily  due to an inability to prepare for the long term, being strategically driven rather than tactically driven may be what finally keeps their doors open.

What Next for Amazon

Over the previous 15 years, Amazon has grown into quite the behemoth, and it shows no indications of slowing down. AWS is unrivaled in the cloud, with $12.2 billion in revenue and more than $3 billion in profit in 2016 (Hashemipour & Ali, 2020). While CB Insights expects that AI will be Amazons next big move, it also warns that the corporation will face stiff competition from IBM and Google, both of whom are rapidly progressing in the field (Hashemipour & Ali, 2020). IBM has developed an entire industry around its Watson platform, which uses cognitive technology to drive analytics across several industries. Nevertheless, if innovation continues, Amazon will become one of the most valuable firms in America. According to BrandFinances recent U.S. 500 2017 research, the corporation is the third most valuable brand in the United States (Hashemipour & Ali, 2020). Amazons brand worth increased by 53% year on year, showing that the company is on the rise and might soon give Apple and Google a run for their money.

Amazon has been the worlds largest e-commerce platform for more than a decade now. However, the company has also faced strong competition from firms like Alibaba Group and eBay. Therefore, to ensure that it maintains its competitive advantage, the organization emphasizes the implementation of its mission and vision statements along with the strategic plan and thinking in its daily activities. This has been achieved through strategies such as customer reviews, product differentiation, and improved customer experience.

References

Hashemipour, S., & Ali, M. (2020). Amazon web services (AWS)an overview of the on-demand cloud computing platform. In International Conference for Emerging Technologies in Computing (pp. 40-47). Springer, Cham.

Jain, R. (2021). Competitive advantages and competition issues: analysis of the e-pharmacy market in India. Issue 1 Intl JL Mgmt. & Human., 4, 962.

Lincoln, I. V., & Andrew, C. E. (2018). Porter analysis: A business strategy of amazon. com through a value chain and comparative advantage analysis of amazons trademarks and intangibles. Com Through a Value Chain and Comparative Advantage Analysis of Amazons Trademarks and Intangibles (2018). Practical Guide to US Transfer Pricing.

Sadq, Z. M., Sabir, H. N., & Saeed, V. S. H. (2018). Analyzing the Amazon success strategies. Journal of Process Management and New Technologies, 6(4).

Williamson, B., Gulson, K. N., Perrotta, C., & Witzenberger, K. (2022). Amazon and the new global connective architectures of education governance. Harvard Educational Review, 92(2), 231-256.

Investment activities are crucial for every organization because they allow businesses to generate revenue, promote future growth and development, and many others. That is why companies typically consider many factors and features to decide when and how to invest their funds. On the one hand, a business can rely on financial indicators, including return on investment, price-earnings growth ratio, and others, to decide whether to invest. On the other hand, non-financial features can also be essential because innovation, competitiveness, and the presence of employee training can also determine whether a firm wants to invest its funds. As for Amazon, this companys investment decision-making is influenced by innovation, a desire to grow, competition, and customer needs.

Innovation is a significant non-financial factor that Amazon considers while making its investment decisions. This statement justifies the attention that the organization draws to artificial intelligence companies. For example, Amazon invested $20 million in Harvest.ai in 2017 and $500,000 in TrackR in 2016 (Henry, n.d.). It is possible to suggest that the organization under analysis decided to give its money to these firms because they offered innovative solutions. Amazon predicted that these products and services would make a difference in the market, which resulted in the decision to invest in them to obtain benefits in the future.

A desire to develop and grow can also be considered an influential factor that fosters investment. According to Rikap (2020), Amazon wants to establish an intellectual monopoly in the market, which makes the organization improve its research and development sector. Addressing this area can provide the business with many essential benefits. In particular, the given approach can allow Amazon to generate internal value and resources that will help the company develop. As a result, this organization is willing to invest many resources to create new and unique products and services that can attract potential customers and beat the existing competitors.

Competition is another non-financial factor that affects the investment decision-making of Amazon. The rationale behind this statement is that the organization operates within a highly competitive market where significant rivals are Walmart, Netflix, Apple, and others. For example, Amazon invested in artificial intelligence to create a digital assistant Alexa that could compete against Apples Siri (Henry, n.d.). Simultaneously, Amazon purchased a video service to challenge Netflixs position in the market (Henry, n.d.). This information demonstrates that the desire to overcome powerful rivals can be considered an influential factor that makes Amazon invest money in different startups.

One can also mention that drawing attention to customer needs also impacts Amazons investment activities. Since the company understood that media production and entertainment would face increased demand, sufficient resources were allocated to develop that sphere. That is why the organization launched Amazon Video, a digital streaming site, in 2006 and opened the retailers production studio in 2010 (Henry, n.d.). The prediction of customer needs and behavior allowed Amazon to gain significant advantages. Furthermore, the COVID-19 pandemic resulted in the fact that the entertainment sphere became more requested among the general public, providing Amazon with more considerable revenue.

In conclusion, financial indicators are not the only phenomena that can guide investment decisions. The case of Amazon has demonstrated that a business can benefit from relying on non-financial factors. The given organization has managed to generate value from focusing on innovation, internal development and growth, competition, and customer needs. Since Amazon drew sufficient attention to these spheres, the company has managed to generate value and compete with major rivals. This information demonstrates that the four areas under consideration can be influential factors for an organization to make investment decisions.

References

Henry, Z. (n.d.). Amazon has acquired or invested in more companies that you think  At least 128 of them. Inc. Web.

Rikap, C. (2020). Amazon: A story of accumulation through intellectual rentiership and predation. Competition & Change. Web.