Category: Amazon

Background

Amazon is one of the worlds most successful technology companies which uses artificial intelligence for practical eCommerce. Amazon was founded in July 1995 by Jeff Bezos in Washington DC (Sheth, 2021). The primary strategy Amazon uses is customer obsession which depends on Research and Development (R&D) to tailor its functional design to customer needs. The company offers over two hundred services, including cloud computing, retail of goods in cyberspace, and offers customers to shop from the comfort of their homes. Though Amazon has adequate logistical operations and stores worldwide, it faces significant competition from Alibaba, Walmart, International Business Machines (IBM), and Google, offering specialized services to the customer (Sadq et al. 2018). Amazons main objective is to improve customer experience and increase sales and thrive.

Situational Analysis

A marketing audit is a crucial tool organization can leverage for success. The corporate domain is a dynamic landscape that keeps shifting, and organizations must strive to maintain customer loyalty. Amazons key competitors offer more specialized services, which may drive more clients to them. Alibaba, for example, has a more diverse advertisement model which keeps pulling customers to its end. While Amazon provides numerous services to the people, companies like Apple, Walmart, and Microsoft of highly specialized services in technology, retail, and cloud computing, respectively (Sadq et al. 2018). Amazons management has focused on technology investment so that most customers may get better and more up-to-date services.

Online retail becomes a successful venture when the customer promptly receives the goods they order online. As Amazon expands, its crucial strategy is to consolidate its logistical capacity further while offering its clients the best services. Investment in R&D is an antidote because it seeks to understand what the clients want and incorporate customer feedback into the designs, ensuring increased customer loyalty. Mergers and Acquisitions are a competitive strategy that allows Amazon to invest in local companies and brands with a substantial local following, making it better to thrive. Since different parts of the world have different cultures, cultural competence is critical for success (Sheth, 2021). Mergers and Acquisitions make it possible to provide the highest level of cultural competence in the goods offered, courtesy of the acquired organizations competence and connection to the needs of the local customers.

Amazons Internal Strengths and Weaknesses

Amazon is a household name for most online retail experiences courtesy of its customer obsession strategy, which incorporates customer opinion and feedback in its service and product delivery. Amazon stems its internal advantage from three prongs in its operation, differentiation, cost leadership, and customer focus. The company operates a wide range of products and buys in bulk, leveraging economies of scale. When it receives economies of scale, the operation cost is lowered, and the price of the final product is considerably reduced. Offering high-quality goods at a lower price gives Amazon a competitive advantage. The company has differentiated its goods and services based on skilled human resource management and technology, increasing customer satisfaction and loyalty. Customer focus is an internal strength that makes the organization receive positive comments from the customers (Sadq et al., 2018). The visionary leadership in the organization hires the most competent research and development, which understands the needs of the dynamic customer needs and revise the designs periodically to incorporate the changes in the production of goods and services.

Amazon has significant weaknesses that hinder it from penetrating faster-growing economies. The major flaw is its imitable business model, as any other person can develop a website and start an eCommerce business. Developed markets can easily imitate the model and start operations, making it difficult for Amazon to penetrate. Amazon lacks a brick-and-mortar presence, making it impossible for customers to associate with the brand locally (Sheth, 2021). Customers prefer buying items such as clothes and foodstuff from physical stores, and the failure of the company to have a physical presence in its customers strongholds serves as a limiting factor for the company. Therefore, the company must focus more on its expansion of logistical and physical presence to maintain its vast pool of customers.

Amazons Marketing Objective

Amazons top management is keen to navigate the competitive business landscape to increase customer satisfaction, improve customer loyalty, and encourage repeat purchases. In line with the key objective, the company wishes to expand the scope of the goods, lower the price and offer customer-focused products using the research and development wing of the organization. Therefore, the top marketing objective is to create effective communication that will have a ripple effect on the customer traffic to the company website (Sadq et al., 2018). As the customers communicate effectively with the organization, their opinion and concerns are likely to be incorporated into the design, and the key objective of expanding becomes feasible. The actionable target that Amazon must focus on is improving customer communication and opening more physical stores for customers to purchase from their local regions and have fast delivery. Some customers prefer shopping from physical stores, and since Amazon has a brand name that sells worldwide, opening physical stores will triple the sales.

Marketing Activities

Amazons marketing should focus on the 7Ps of marketing to develop a strategy that will enable it to meet its goal of improving its sales and thriving in the corporate domain. Price, product, place, promotion, packaging, people, and positioning are critical aspects that the company must focus on to meet its goal. As the market is constantly changing, Amazon must take advantage of its brand name to increase popularity and leverage the seven Ps to improve its sales.

Price and Place

Price is one of the most significant determinants of business success, and any company must leverage it to attract customers. Since Amazon gets economies of scale and can lead in the price leadership, it must use its R&D to determine a price that resonates with customers. In a time of economic hardship, the company must lower the costs of goods and services to enable customers to access the goods at friendly prices. Leveraging on the economies of scale to lower prices increases Amazons sales (Jindal et al., 2021). The company must further invest in building physical stores worldwide to give customers a chance to shop physically for their goods. Building the offline stores will solve the internal weakness of absence in the offline domain.

Product and Promotion

Amazon provides a wide range of products to the customers and must therefore look at the product as an external consultant to improve the quality. As the customer needs to keep changing, the company must invest more in its research and development to use disruptive technology to appeal to the customer. All products offered by Amazon must meet the customers needs and give them a window to issue their concerns, view, and opinion. The Amazon brand is famous worldwide, but the company must never ride on the assumptions of its popularity to stop advertisement. It must incorporate new strategies of awarding customers who recommend new people to shop with Amazon (Singh & Pathak, 2021). The referrals awards will motivate the customers to refer the products to their family, friends, and colleagues. In the long run, it will multiply its customer base and achieve its goals of increasing sales.

Positioning, People, and Package

Positioning is an essential concept within the marketing framework, and it ensures that the company takes a special place in the customers hearts. The way an organization positions itself in peoples minds determines the sales. Brand activism is an example of how an organization takes a position to support a social issue of social importance (Moorman, 2020). Problems affecting the people, such as discrimination, must be addressed by the organization. Investing in Corporate Social Responsibility (CSR) on environmental importance is likely to increase the chances of the organization obtaining popularity. Further, Amazon must understand the peoples culture and package their products according to the customers cultural orientation.

Planning Timetable

Time Allocated	Activity	Expected Outcome
April-June 2022	Analyze the economic situation and lower prices.	Price leadership to appeal to clients.
April-December 2022	Carry out a feasibility study to initiate the building of physical stores	Increase offline stores
After every three months	Analyze customers changing needs to incorporate their opinion into design	Tailor products to customer needs
Monthly	Promotions to award those who refer clients to Amazon	To multiply the sales
Annually	Set a budget for corporate social responsibility on an issue affecting the people	Position the company in peoples hearts.
Whenever entering a new market	Study peoples culture and ensure the products are packaged in line with the customers culture	Align packaging to peoples culture.

Conclusion

New entrants in the eCommerce business are a threat to Amazon, and its operations may be affected by the growing competition. As the competitors thrive, the company is likely to shrink and lower its sales. Amazon management has a choice of implementing the marketing plan for success. Applying the provided marketing matrix will ensure that Amazons customers are connected to the organization and enable them to navigate the competitive market and thrive.

References

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. Web.

Moorman, C. (2020). Commentary: Brand activism in a political world. Journal of public policy & marketing, 39(4), 388-392. Web.

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). Web.

Sheth, J. (2021). New research areas in marketing strategy, consumer behavior, and marketing analytics: the future is bright. Journal of Marketing Theory and Practice, 29(1), 3-12. Web.

Singh, A., & Pathak, G. S. (2021). Revisiting marketing strategy in emerging markets: a study of Amazon. com Inc. International Journal of Economics and Business Research, 22(2-3), 113-126. Web.

Ownership of Amazon

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

Audible

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

CreateSpace

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

Good reads

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

IMDb

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

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

Whole foods

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

Woot

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

Zappos

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

Liability of Amazon UK

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

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

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

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

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

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

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

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

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

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

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

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

Purpose of Amazon UK

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

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

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

Scope of Amazon UK

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

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

Amazon is a company known for its online services to purchase items and get them delivered to your house, being very convenient and appealing to a wide range of customers. However, they also provide other services, such as cloud computing services, streaming videos, audiobooks, software games, and produce consumer products (such as Alexa), and more (Amazon, 2018). Because of this, they have managed to become the 3rd most valuable brand in the world in 2018 with a worth of $101bn (Monaghan, A. 2018). Since 2018 there is a new possible threat to this company – net neutrality.

Net neutrality is a principle in which all data on the Internet have to be treated equally by Internet service providers. It is not allowed to charge differently depending on user, content, platform, etc. Net neutrality was officially revoked in the US on June 2018 as the FCC wanted to stop the federal government from micromanaging the Internet. Many people were concerned that their access to the Internet would be limited, as they would have to pay additional fees now for online services (O’Sullivan, 2018). For online businesses, this might be an issue as customers would lose interest due to having to pay a fee or having to wait longer for websites to load. Amazon is a well-known online business, therefore, they will also have to deal with net neutrality.

For this investigation, the question “What importance does net neutrality have on the service of Amazon?” will be answered through different supporting about net neutrality laws and Amazon as a business, and analyzed through tools such as the marketing mix, the 4P’s: price, promotion, product and place, and e-commerce. It is relevant as it is important to know Amazon’s online business in order to analyze the possible issue of revoking of net neutrality.

Marketing Mix

As an online company, Amazon is very competitive with its prices. They offer new items as well as used items, showing a wider range of prices that could appeal to more customers. They also offer a premium service that customers can pay for which provides benefits such as faster delivery and more. However, Amazon prioritizes its own products and sells them at a lower price than competitors, which is not actually allowed under net neutrality. They are able to provide such a wide range of products because they can sell directly from their providers, acting as a distributor and a retailer. Amazon gives stage to different retailers to sell products to purchasers. However, net neutrality could be disadvantageous, because producers would not necessarily have to work with Amazon but could just sell their products directly themselves, but they should still do so as Amazon has many customers.

Amazon mainly uses web-based advertising, but also commercials on TV and billboards. They don’t have a lot of physical advertisements, but it is not an issue with net neutrality as their customers will see advertisements on the Internet. However, this could be a disadvantage, because even though their advertisements will be seen by a lot of people, advertisements from other business will also be seen, leading to Amazon having a lot of competitors.

The place of Amazon is the Internet, mainly their own website. The design of their website is very important because they do not have a physical store unlike competitors such as Walmart. Because of net neutrality, Amazon was able to continually grow and succeed using the Internet as a distribution channel, but because they already have a huge brand recognition, they have no need for net neutrality and it’s now working in the favor of their smaller competitors as there is equal access and ability to get your website and content in front of the same audience.

Without net neutrality, the prices of Amazon could increase because they have fewer competitors, as the smaller businesses will struggle in the online market. As they now have fewer competitors, they don’t need to keep their prices as low as possible as they would be one of the leading online companies. It can be an advantage for Amazon because producers would be more likely to cooperate with Amazon as they would not be able to afford a presence in the online market on their own, in comparison to ‘product’ in with net neutrality. This would, in turn, mean that more producers would want to sell their products through Amazon, which would increase the demographic reach.

Without net neutrality, Amazon would be able to pay to be more visible on the Internet, as competitors would not be able to afford to compete promotionally against Amazon. Amazon wouldn’t need to spend as much on promotional material either because they can make themselves into one of the few options for the customers. With no net neutrality, being on the Internet would be an advantage for Amazon in comparison to smaller competitors as they would not be able to afford to pay for equal exposure. As mentioned before, Amazon already has huge brand recognition, so customers would already prefer them over smaller competitors.

To conclude based on the marketing mix, the importance of net neutrality on Amazon depends on the business and their stakeholders. Net neutrality has a bigger advantage for Amazon’s customers, as the prices could be lower due to the lower overhead and availability of competitors. No net neutrality would be an advantage to Amazon because they could pay to gain more exposure than smaller competitors, as they are a big company and can afford to do so, whereas the smaller companies will struggle. No net neutrality would also lead to more demographic reach as producers would more likely want to sell their products through Amazon. However, an interesting idea to consider is that despite already having net neutrality, Amazon still practices strategies that are against net neutrality, such as prioritizing their own products over others. This is contradictory towards the other supporting documents because it depicts Amazon as an exception for businesses affected by net neutrality laws.

E-Commerce

E-commerce is the buying and selling of goods through mainly the Internet, in which Amazon plays a big role as it is an online business. It was predicted that Amazon would have almost 50% of the e-commerce market in the US by the end of 2018. That is a large percentage considering that there are many other businesses that do e-commerce, such as Walmart and Apple. However, the difference in numbers is significant, and therefore through e-commerce, it can be investigated whether net neutrality could really have had an impact on the business’ success in 2018. The US e-commerce companies state that Amazon has 49.1% of the US retail e-commerce sales and is, therefore, the leading e-commerce business by being number 1. On 2nd place, there is eBay with 6,6%. The difference in percentages between the two business is enormous, despite both being well-known. Amazon is mainly known for its business-to-consumer type of e-commerce and is an acknowledged leader of the business-to-consumer market, and as that kind of business is very popular as it’s easily accessible and convenient, it is not a surprise that Amazon is in the lead. As mentioned in the marketing mix, whether net neutrality is there or not mainly has an effect on Amazon depending on the customers and the business’ preferences. It could be said that without net neutrality, Amazon has the big advantage of getting more exposure than smaller, less-known businesses. Amazon as e-commerce is in the lead, therefore net neutrality does not have that much of an importance in comparison to other, smaller e-commerce businesses.

Conclusion

This investigation answered the research question “What importance does net neutrality have on the service of Amazon?” through the tools and documents used. The marketing mix shows the effect and lack of net neutrality, whereas e-commerce serves as an explanation of why Amazon would be affected. The supporting documents provide information regarding net neutrality itself, its effects and Amazon as a business. Amazon is a successful business, dominating in the e-commerce market so net neutrality does not have much of an impact on Amazon’s service. With net neutrality, Amazon is more attractive to stakeholders like customers because of lower prices, as well as producers as they can sell their products through Amazon. Without, competitors have a lesser chance against Amazon as they are a known brand and can pay their way for exposure in order to stay in the lead. It is to be considered that this investigation is limited, and more information is required to have a solid conclusion. Because Amazon is not very affected by the presence of net neutrality, it does not mean the same for customers. It is important to investigate their satisfaction too.

Did, you know that the biggest and most important rainforest worldwide is being cut down?

The Amazon Rainforest is being cut down and could put the world in jeopardy. We need to stop this problem before it’s too late. As the Amazon is getting cut down more and more, unique plants and animals are becoming endangered. Also, humans depend on the rainforest for ⅓ of the world’s oxygen.

Important unique plants that are only found in the Amazon Rainforest are becoming endangered. According to Sciencing.com, there are over 24,000 endangered plant species which is keen for the survival of the Amazon. This problem is bad because some of these plants are essential to rainforest’s success. For example, Mangrove trees prevent major erosion from happening by slowing down the movement of sediment. However, there are plants that also benefit humans as well. According to rain-tree.com,

some indigenous plants in the rainforest can cure disease. For instance, the Periwinkle plant is one of the world’s most powerful cancer fighter. Important plants, not only in the Amazon, but also the world of medicine, are being destroyed and harmed by clear-cutting. We, as a world community, should help stop this madness and complete end to clear-cutting in the Amazon Rainforest.

Animals that live in the Amazon Rainforest are becoming endangered by habitat loss and poaching. According to aquaexpeditions.com, about 2,600 animals are endangered and that is a bad sight. This is bad because the Amazon Rainforest is losing more and more animals daily. For example, the South American Tapir is endangered due to habitat loss and poaching. Animals are becoming endangered and it is our duty to protect and help these animals who are losing their lives.

The Amazon Rainforest(also known as the lungs of the world) is a major oxygen producer and that is very important. According to rain-tree.com, the rainforest produces more than twenty percent of the world’s oxygen. However, deforestation rates are going up and the Amazon is starting to rapidly decrease in size. Kidsmongabay.com states that every year, about the size of New Jersey(8,720 miles) gets cut down in the Amazon Rainforest. If this keeps going on, we could lose a major source of oxygen. The Amazon Rainforest is a major source of oxygen, and we should protect it so it stays like that for many more years to come.

Every day, the Amazon Rainforest gets cut down and animals and plants lose their lives. Also, us humans lose more and more oxygen in the air. We need to put a stop to deforestation in the Amazon or we just might put an end to ourselves.

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

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

Decision Analysis

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

Forecasting

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

Inventory Control

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

Transportation

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

Project Management

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

Conclusion

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

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

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

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

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

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

1. Introduction

1.1. Company Overview

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

1.2. Business Problems

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

Firms Situation Symptoms Likely problem(s) Decision Statement

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

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

Decision Statement Research Objectives Research Question(s)

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

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

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

2.0 Overview of Job Demands-Resources Model

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

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

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

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

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

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

3.0 Methods and results

3.1 Qualitative Analysis method explained

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

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

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

Amazon Case Study

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

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

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

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

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

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

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

Bibliography

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

1. Introduction

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

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

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

2. External Environmental Analysis

Pestle Analysis

Political

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

Economic

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

Social

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

Technology

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

Legal

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

Environmental

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

3.1 Assessing the Strategic Position of Amazon

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

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

Ansoff Matrix

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

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

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

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

3.2 Assessing the Strategic Position of EBay

Strengths

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

Weaknesses

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

Opportunities

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

Threats

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

4. Implications of External Environment Changes for Amazon and EBay

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

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

5. Conclusion

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

Introduction

In this report, I will be writing a report based on two different large businesses, Amazon, and Tesco. The purpose of this report is to examine the customer service approaches and processes in Amazon and Tesco, who are two contrasting businesses, and show how both of these businesses meet their customer expectation levels. I will also be examining the ways that customer service in both businesses can meet the and satisfaction of customers and adhere to relevant current legislation and regulations.

The report will also contain an analysis of the impact of these laws and regulations on customer service, with examples. Also providing research and analysis of methods that a particular company can use to improve customer service. The report will also contain an assessment of the importance of providing excellent customer service and adhering to relevant current legislation and regulations for both selected businesses. Finally, the report will finish off with a discussion of the advantages of better customer service from the standpoints of the company, the customer, and the employee.

P1: Describe the different approaches to customer service delivery in contrasting businesses. What Is Customer Service?

According to Investopedia.com, the direct one-on-one interaction between a customer making a purchase and a representative of the company selling it is known as customer service. Most retailers consider direct interaction with customers to be an important part of ensuring customer satisfaction and encouraging repeat purchases. Including today, when most customer service is handled by automated self-service systems, most businesses consider having the option to speak with a human being to be essential.

The majority of businesses have people who never meet or greet the customers who buy their products working behind the scenes. Customer service representatives are the ones who interact with customers directly. Buyers’ perceptions of the company and the product are influenced in part by their interactions with that individual. (Grant, 2020)

Internal and External Customers within Amazon and TescoAn internal customer can be anybody who works within a business organisation. An internal customer could be a work colleague, a department, or a distributor who relies on us to provide products or services that are then used to create a deliverable for an external customer. Internal customers, on the whole, do not have a choice. For instance, if the sales department does not like accounting’s credit policies, they cannot fire it and hire someone else.

External customers are those who pay for and use the goods and services that a business provides. These customers are who the business is designing for when brainstorming problems and solutions for their business. An external customer is someone who is not affiliated with a company other than through the purchase of your product or service This customer could be a one-time buyer or someone with whom a business has previously done business with for a long time.

As both businesses are completely different, it also means that both businesses have different types of customers. For Amazon, they use external customers within the business. The reason why they have external customers majority of people who visit the Amazon website are most likely buyers and are looking for something to buy. As mentioned, these customers are who the business is designing for when brainstorming problems and solutions for their business. This ensures that Amazon is doing everything that it can do make sure that their existing customers and potential new customers to stick with its business when they introduce new products. Because of the type of business Amazon is, their customers are people who are not affiliated with a company other than through the purchase of your product or service unless they are paying for a subscription service. However, Amazon’s customers could be a one-time buyer or someone with whom a business has previously done business with for a long time.

Tesco uses both internal and external customers within their business. They use external customers by employing people to work for their business tackling day-to-day tasks and also employed to take care and help external customers with products and services who are shopping with Tesco. As well as employees, Tesco also uses suppliers as external customers. ‘A supplier is a company that provides goods or services to another company. This organization is a part of a company’s supply chain, and it may provide the majority of the value contained in its products. Some suppliers also might engage in free shipping, which involves sending products directly to the buyer’s customers.’ (Bragg, 2018) Tesco suppliers supply them all of their products which then later sold at a different price, usually higher price, to their customers.

Types of Customer Service

TelephoneOne of the most basic and widely used types of customer service provided by businesses today is telephone customer service. The reason for this is that both a customer service representative and a customer can use it because it is simple, efficient, and accessible. Using the phone provides a more personalized experience for both parties and takes less time than typing an email and waiting for a response. Telephone customer service is also more user-friendly for people of different generations and allows for more natural human-to-human interaction.

Face to Face

Face-to-face customer service essentially provides more personalized assistance to customers. Face-to-face customer service, rather than relying on email, the phone, or the internet, necessitates the customer and a trained representative of the company being physically present in the same location. While technology allows for a variety of ways to interact with customers, a face-to-face approach requires a customer visiting a store’s location. It usually allows a business’ representative to make a more personal impression on the customer who is seeking assistance. When it comes to face-to-face customer service, a few key characteristics are required to ensure that customers have a positive experience.

Email

An email response to a customer’s question, feedback, or complaint is known as a customer service email. Customers can reach out to a business via a website contact form, an email address that is listed on a company’s website or social media accounts, or by calling customer service. A company could send out automated customer service emails or write personalized emails to customers. Customer service emails usually address a customer’s problem with a product or service.

Social Media

The act of providing customer service through social media channels is known as social customer service. Many businesses are now using social media as a substitute to their call-based customer service efforts. Addressing complaints, answering questions, providing guidance, and even issuing refunds via social media are all examples of these services.

Because of the nature of social media, social media customer service may be considered as marketing. Alternatively, the function may increasingly become a part of a call center team’s responsibilities. Social customer service is a cost-effective alternative to other forms of customer service for businesses with a large online customer base. The call center staff can easily be trained to assist customers through social media. They have access to specialized workflows, training, and software to quickly resolve customer issues.

Live Chat Support

Live chat software is an online communication tool that allows a company and its website visitors to communicate in real time. Chatting online is a great alternative to calling or sending emails. All that is required of businesses or their visitors is to type their message into the chat box and send it. Live chats can assist multiple customers at once and provide automated responses to the same question being asked by customers. It also has the ability to save web chat conversations for later use by the customer, is customer-friendly, and provides comprehensive customer service.

Benefits and Drawbacks of Customer Service

Benefits

Increased Profits Revenue

Customer service that is of high-quality leads to increased revenue, which leads to more customer sales for both Amazon and Tesco. When customer service meets or exceeds customer expectations, the customer gains confidence in both companies’ abilities and is more willing to spend more money on its products and services. This can have a direct impact on the companies ‘bottom line.’

Increased Customer Satisfaction

Customers are satisfied when their needs are met by a business. Customer service that is of high-quality means that the company is meeting and exceeding the expectations of its customers. Customer satisfaction surveys are one of the most effective ways to learn what customers think about a company. The surveys should include questions about the customer’s most recent interaction with both of the companies, both company’s product and service quality, and what the customer dislikes about both companies. Customers should also be asked what they like about both company’s competitors in the surveys.

Increased Customer Loyalty

Customer loyalty is directly proportional to the quality of service provided. Customers will be hesitant to use the services of a competitor if the organization truly meets and exceeds their expectations. Competitors of Amazon and Tesco frequently enter the market and offer lower-cost services. By providing and maintaining good customer service, the industry leader can avoid a price increase.Customers stay loyal to a company when they have faith in its customer service.

Involved Employees

Employees of Amazon and Tesco who provide excellent customer service spend time sharpening their skills to benefit the company. Rather than repeatedly encountering the same problem, employees not only satisfy the customer but also take steps to prevent the problem from recurring. The employee makes a positive impression on the customer, has a direct impact on the company’s operations, and feels fulfilled. For the customer, the company, and the employer, it is a win-win-win situation.

Drawbacks

Poor customer service can have a negative impact on a business in a variety of ways, not just on current and future sales. This is especially important for people that rely on customer loyalty and positive word-of-mouth marketing to succeed. In relation to the threat of current customers due to poor service, chronically poor service can have a negative impact on the business’s ability to attract new customers.

Loss of Current, Potential and Future Customers

According to LinkedIn.com, even the most forgiving of customers can be lost due to poor customer service. Consumers typically do business with a company because it is convenient, because it is a habit, or because they are looking for a specific product or service that is difficult to find elsewhere. Even the most steadfast customers can be turned off by poor service.

Poor customer service has the potential to cost a company money before they buy anything. When new customers walk into a store and are ignored, talked down to, or subjected to long lines and inexperienced employees, they may reach for the door before even reaching for their wallets Anything that makes doing business with them difficult or unpleasant should be a red flag, indicating that their service levels need to be improved.

Customers who receive poor service often tell their friends and family members about it in order to warn them away from the company. Your company will lose potential customers as a result of this. Before they even walk through your door, people will have formed a negative opinion of your company.

Loss of Profits and Employees

Poor customer service usually means fewer customers, which means lower sales and profits for a company. This can start a vicious cycle in which a company tries to save money on staffing or customer service training, which leads to even lower service levels. When a company cannot keep up with the financial demands of running a business, it faces rising operating debt and, eventually, failure.

Even low-performing employees dislike being yelled at or scorned by angry customers, which can lead to high employee turnover. Constantly advertising for new employees, then screening and training them, is costly and time-consuming. Customers may begin to wonder why their company is unable to retain employees and may begin to question their management practices.

Benefits of Effective TeamworkHaving effective teamwork in a workplace has always been helpful asset for successful businesses. Nowadays, many businesses out there are undergoing a lot of pressure being a part of an economy. This means that it is now important than ever for business’ employees to be working together and effectively between all different functions of the business. At a time when talent retention faces a highly competitive global job market, effective teamwork is also critical for employee engagement and wellbeing.

In terms of benefits of effective teamwork, there are many different types of benefits that come with effective teamwork. A benefit of effective teamwork is that it encourages learning and creativity in a workplace When people work together as a team, creativity flourishes. Working together to brainstorm ideas prevents the stale viewpoints that often result from working alone. More effective selling solutions are created by combining the unique perspectives of each team member. What people have learned from other people’s experiences is completely different from what their co-workers have learned as result, teamwork maximizes shared knowledge in the workplace and assists people in learning new skills that they can use throughout their career. Collaborating on a project fosters a desire to learn that is often lacking in solitary work. Employees are enthralled by the prospect of sharing their discoveries with the rest of their team, which fosters both individual and team knowledge.

Another benefit of effective teamwork is that it helps build trust between employees and the workplace. Relying on others encourages trust, and teamwork promotes strong bonds between co-workers. An effective team enjoys working together and has a strong bond, despite occasional disagreements. When people put their trust in a co-worker, they are laying the groundwork for a long-term relationship that can withstand minor setbacks. Trusting their teammates also creates a sense of safety, which allows for the rise of new of new ideas. It encourages employees to open up and support one another. When working in a group, open communication is essential for producing