Category: Amazon

Amazon was created with the intention of it being a book selling website, but with its success Jeff Bezos diversified it into many different markets to expand his own company. The website is now used to sell/buy apparel, medicine, movies, electronics, and even grocery shopping for some people. With online shopping at its highest point it’s ever been, Amazon is pursuing the perfect strategies to keep their company at the absolute top. A few reasons why Amazon is as successful as they are today is because they are so innovative and compared to other online shopping websites, they are best known for their customer service.

One reasons as to how Amazon is so innovative is because of the making of the Amazon echo, which can be used for many things such as, playing music, check the weather or even check on your favorite sports team. It was a huge investment by the people of Amazon, but it was successful, and they sold over 22 million in 2016 alone. (Howland) This is just one of the brilliant innovative ideas of Jeff Bezos. Amazon continues its success and has so many daily shoppers mainly because of its unbelievable customer service. Amazon has a wide range of tools set out for customers track anything about their package or make any returns that are needed with no hassle. Amazons customer service team has won several awards for being so helpful to customers. Amazon has also expanded their customer service to many social media platforms which just increases the wide range of options you have to go for help.

Amazon basically develops new products to serve in existing markets. Amazon also offers free repair service. This where they can give assurance to the consumers for products like electronics and motor parts. This leads the customer satisfaction and people will tend to purchase more products from amazon. Amazon uses a conglomerate diversification strategy because they started off as a mainly book selling company, but they expanded into a new area of which they do not have much knowledge/experience with. This strategy usually carries a slight risk since there is lack of knowledge in the area you are expanding into. (Wasserman)

Amazon expanded throughout the entire US and became one of the biggest companies, but they also diversified into foreign places such as Japan, Europe, and Asian and Latin American countries. This helps Amazon diversify into different market and customer areas that they never could have thought that they would reach. It is a great idea to diversify no matter which industry you are in. Expanding into new and different markets will help your company in areas that you wouldn’t think of. Another huge advantage on Amazons side is being paired with googles search engine. For example: if you search for a product on google it will give you options from Amazon (if they are available on that website), alongside some options from other websites but Amazons would be most reliable to purchase from. Another reason Amazon is so successful is they strive to get the cheapest prices possible for their customers. Once operating expenses goes down the company will be able to provide goods and services at a cheap price.

Therefore, the selling capacity increase and this leads them to increase their revenue. A great strategy that Amazon uses is they form so many partnerships with non-online retailers to sell their product online. This causes the company to buy highly valuable brand name products which leads the companies to get more income while also expanding.

Amazon has also diversified their company so much just off executing the basic concepts perfectly. They built up a huge customer base and now they are taking over online retail because they give you no reason to purchase something off another website unless Amazon doesn’t have it available itself. They get enough information on their customers to know what to advertise for them and put out, and they also have enough distribution centers around the world which allows them to ship products at a very fast rate to anyone. The largest online market has also implemented plans to adopt a “Brick and Mortar” strategy. Amazon realizes that people are dissatisfied with shopping in stores and they want to change the entire experience. With this Brick and mortar strategy being implemented, Amazon would have their own physical store alongside the online one, and people could make purchases by just saying a few words to their Amazon echo. Another advantage Amazon is going to have over every online retailer is that, once this Brick and Mortar model is fully implemented, Amazon is going to have same day delivery using drones which is going to fulfill the customers’ needs like no other company can. Brick and Mortar is a popular strategy by many, but Amazon just started implementing the idea in around 2015-2016.

Amazon has also started creating “Amazon go stores” where customers can go in and buy any grocery essentials (breakfast,lunch,dinner,snacks etc.). What makes this store so amazing is that it is all advanced, you don’t have to wait on any lines, you literally just grab whatever you need, and you can go. The only thing you need to make sure you have before you go is the “Amazon Go” app installed on your phone. Shopping at Amazon go is also very time conservative because, if you have to go out to pick up some vegetables you run the risk of waiting on a 15-20 minute line if its busy, at Amazon go you can just go grab whatever you need and go and pay through the app. Amazon is really changing the entire shopping scene in every aspect whether it comes to, food, electronics, etc. The only negative to come out of this that is the effect on job loss. They way Jeff Bezos expands though it wouldn’t be surprising if they had them all over the world by the 2030s. (Caffo)

Amazon is striving most during the Holiday seasons because everyone goes on there to rush presents for their families. Also, Amazon knows how to convince customers to always go back to their website and purchase from them. For example, during the holiday seasons, Amazon loves to offer free gifts to people making purchases on their website. They have deals in which if you are someone purchasing a stereo set during Christmas time, they will offer to send you some Christmas time music CDs. They also have a wide variety of options of gifts but it is only on select items when you are shopping. If you are signed up with Amazon, they will also frequently send you emails with promo codes for free gifts/discounts. When customers get treated like this, they have absolutely no reason to not come back and shop from there.

It is mind-blowing how far Amazon has come since they started off as strictly selling books, and now they have paved their way to become the leaders of online shopping. Amazon has the widest selection of products in the entire world on their website which just goes to show how much they have diversified as a company. They use all forms of advanced technology to take care of all their customers and you can chat with customer service at any time. Many companies are entering this industry, it’s just a matter of what Amazon could do now to keep themselves at the top.

Introduction:

Amazon was founded in the year of 1994 by Jeff Bezos which progressed to be an industry leader in e-commerce today. Bezos original business idea was to be a bookstore however he saw the opportunity to diversify his existing business to be more than just a simple bookstore. Bezos decided to expand and operate in many different segments of the market the three main areas being, electronics, media and other merchandises. Although Amazon is a market leader against business such as Google, Netflix and eBay. There are many external factors that affect Amazon which I will highlight in this report, that the director has asked for me to produce.

Analysis of the business:

Political:

A political issue which affects businesses is trade protectionism, this is when trade barriers are implemented to toughen the level of imports and exports allowed in a country. This is an issue which is being put forward by the trump administration. By introducing trade protectionisms, it will make it difficult for business that are not native to the USA to operate successfully there. (Diamond.2017) Although Amazon is not a foreign business in America the materials which they import are from these foreign countries therefore it might hinder their operations if tariffs are introduced. Not only will Amazon face issues with their operation they may take a hit to their overall business image and name if buyers think they are getting exploited by higher prices that amazon might have to charge in order to be able to cover their costs. This will leave Amazon with the decision of whether or to they will be passing their costs on to their customers. Another key political issue which Amazon are going to have to face is Brexit. Brexit is the departure of Britain from the European union.

As of right now the Britain is still a part of the EU but once they leave the will also lose benefits which come with being a member of that trading bloc. The government of America and the British government are deciding on deals they can have with trading between themselves. (Gilchrist:2017) If an agreement is made then it may be beneficial to Amazon in terms of helping them to operate more smoothly in their market. As Amazon was originally an American business but expand to different countries, while operating in the UK and having this potential trade agreements it may lead to Amazon being able to import from foreign countries without the extreme taxes being placed on it. In contrast to the trade protectionism that could be placed by the Trump administration by having the agreement between the UK and America instead it would be beneficial to Amazon as they will be able to keep growing as a business and become more profitable.

Economic:

As a global business Amazon will constantly be faced with economic difficulties as they are constantly changing and functioning in different economic countries. The main threat that Amazon will face in the UK is Brexit, this will have a knock-on effect with both Amazon operations and their consumers. They will be faced with new taxations which may negatively affect their profitability, as the cost of their materials may see an increase especially in the materials which are imported from other countries. As of right now whilst the UK are still apart of the EU, they can trade freely within the EU however they can also trade with countries outside of this trade bloc. However, once the Brexit deal is complete the UK might not be able carry on functioning as they used to, there is a high chance that Brexit will mean EU customers will face extra taxes on goods. (Johnson 2016)

Recession is another key indicator in the environment that could affect Amazon. For instance, the economy of china is nearing a standstill, not only does this having a negative effect on China itself as a country. The Chinese recession also poses to threaten Amazon as they envisioned themselves expanding their business into the Chinese economy. As of right now the leading company that operates in china is Ali Baba, which is one of Amazons competitors, Ali baba have a competitive advantage against amazon as they wanted to penetrate the Chinese market, but Ali Baba beat them to this. If Amazon were able to move into the Chinese market this would benefit them massively as they would be able to increase their profitability and market share

Social:

A major issue which has a great effect on society is the battle with health. There are currently around 700 million people who are classified as being overweight, this leads to immense pressure on the government to promote activities and diets which encourage people to look after themselves and decrease the amount of people being classed as overweight (Bedard,2017). The issue that Amazon faces as a company is that they are seen to be encouraging people to not lead an active lifestyle. This might be the image they give off as they provide a service which allows users to order whatever they want and it will be delivered right to their house, there is another service that amazon provides which is Amazon Prime, this service allows customers to have access to next day delivery but in some cases the same day delivery. By offering this service to consumers it seems like Amazon is contributing to the obesity pandemic as they unintentionally are promoting the non-active lifestyle.

Although it may look like Amazon is negatively impacting society a survey conducted by recode poll discovered that roughly 20% of Americans feel as if Amazon have been positively impacting on society unlike many other tech companies such as Apple, Facebook and Google.

Technological:

As time goes on there are new developments in the world of technology which affect many businesses. Therefore, increased levels of innovations are a requirement to be able to meet the demand which businesses face due to the increasingly globalised and interconnected supply chains which leads to them operating in a more efficient manner. (Sindi and Roe, 2017) Many businesses operate by working smarter not harder. This is visible the way in which Amazon operate, from visiting one of their warehouses I was able to see that they have a piece of machinery which allows for them to scan the dimensions of the packaging in order for them to be able to sort it out much easier and quicker than what they were able to do before. After the new machinery scans the dimensions it is automatically sorted it into the right section this makes Amazons operation run smoother as there is a decreased chance of human error as everything is completed with the use of a computer. This new piece of technological machinery is very beneficial to Amazon aa they are saving on time and money. Amazon are able to save as they don’t need to employ staff to manually sort the packages into their sections.

In this industry the likes of Ikea already give their customers the choice to visualise how furniture would look in their rooms if they were to purchase it. (Mintel 2018a). There are currently arrangements being made by Amazon with plans to also introduce virtual reality tools. This will allow Amazons customers to envision the products which they are looking to purchase, this is possible due to the increase in smart homes meaning consumers can interact more with businesses and their products to ensure they are purchasing the right items for them.

Legal:

Multinational companies are having increased pressure on them to carefully asses their clients, they are encouraged to do a risk assessment on clients who are politically sensitive or clients who appear on terrorist watch list need to be authorised.(Gov 2016). Currently Amazon is being prosecuted by the federal government as it seems as if they have sold goods to individuals who are on terrorist watchlists which violates the US sanctions. This shows that Amazon are showing a disregard for US laws but also laws internationally and safety for everyone. (Daily Mail 2017)

There are many rules and regulations that a business needs to follow if they are to operate successfully some are beneficial to businesses however others can really threaten the business. For Amazon a threat to their operations is the different consumer privacy acts. The main act which may have a huge impact on Amazon is the “California consumer privacy act 2018” this bill is meant to meant to increase the privacy right and protection of consumers. Major companies such as Amazon, Facebook and Apple are going to be required in 2020 to inform their customers fully of what they intend to do with their data. They need to inform their users of what they are collecting and how they are going to share the information they provide. (Newcomb 2018). Consumers will be given the option of opting out of their data being used this will be a very big threat to tech companies such as Amazon as they rely heavily on the data their users provide them with.

Environmental:

Businesses are being encouraged to be more environmentally friendly with how they operate. Green peace accused Amazon in 2018 of having poor environmental practices with how they operate their business. Green peace accused Amazon of being opaque in their submission of their data regarding the environment.

Introduction

Amazon is an American multinational technology company and the largest e-commerce market and computing platform in the world and the second largest employer in the US. It is based in Seattle, Washington and was founded by Jeff Bezos on July 1994. It started as an online library but diversified later to sell everything, which has brought her up to being the most active online selling platform with its distinguished was of leading, communicating and implementation of smart online selling strategies while having 100 million people who are subscribers to Amazon Prime. (wikipedia, 2019) It is a company with around $75 billion in annual revenue, a $140 billion market value.

Organization heroes

At the highest level of Amazon, Jeff Bezos has a team called the “S-Team”. Each one of the team is responsible for a large entity under them. The main heroes are:

• “The heart and soul of Amazon” Jeff Bezos, he is the founder and the CEO of Amazon.
• Jeff Blackburn, he is an executive and a part of the investment banking team which took Amazon public.
• Andrew Jassy, he runs web services. He is a big deal because of running a very important section.
• Jeff Wilke, He is effective in building the supply chain infrastructure.

Then comes the CFO, controller…etc. But, the above 4 people are the key players. (franklin, 2018)

Organizational structure

Amazon has a hierarchical organizational structure. Despite its large size, unlike other hierarchical organizational structure companies, Amazon remains highly flexible to adapt to changes in the marketplace. (dudovskiy, 2018)

According to the articles and sites that I have read, I can tell that amazon has a comfortable environment for employees, so they follow an informal internal structure as employees interact directly and easily with head managers through emails and other communication methods.

Decision-making process

Decision-making is a comprehensive organizational process that has an impact on each level in the organization including, individual, group, and organization itself.

Bezos takes a red pen to cross out anything that doesn’t send the simple message ‘You won’t find a cheaper, friendlier place to get everything you need than Amazon’.

The Decision-making process in Amazon includes brainstorming, affinity diagramming, force-field analysis, flowcharting, planning matrix, unilateral decision-making, consultative decision-making, voting decision-making, and consensus decision-making; analyses the utility of decision-making process in organizational settings and investigate their implications for quality management in organizations. (htt)

Amazon is known for being accurate and data-driven.

“You have to realize: decision making isn’t one size fits all,” said Bezos.

To know the difference, said Bezos, ask yourself two simple questions: “What are the consequences of this decision?” and “Is this decision reversible?”

Reversible decisions are a low consequence and reversible. These decisions can be made quickly with data and by junior teams. “If you make the wrong decision,” Bezos explained, “the cost is low.” Large companies can become less intelligent when small, reversible decisions are made using a “big consensus process.” Even if it isn’t the greatest move, going fast will help you get a leg up on the race. “The cost of being slow is so much higher than the cost of getting the answer exactly right,” he said.

Irreversible decisions demand more care. These high-consequence decisions should be made by senior leadership, single individuals or tiny teams. Bezos referred to himself as “a chief slow down officer” Bezos called these types of decisions “one-way doors”.

With huge, irreversible decisions, gut and intuition can play a big role. “People think of Amazon as very data-oriented and I always tell them, look, if you can make the decision with data, make the decision with data,” he said. “But a lot of the most important decisions simply cannot be made with data”.

Leadership style and motivational environment

Amazon is famous for the approach “disagree and commit.” (what’s amazon’s leadership style, 2017)

Comprehensive conversations in which different opinions are expressed are valued. Inclusivity and collaboration are keys to what they are. They pride themselves for being respectful for their employees and willing to listen. Their history has shown them that they get more things done together.

Amazon has a type of e-mail that emerge panic waves. It occurs with annoyed customers complain to Jeff Bezos public e-mail address. He always reads customer complaints and forwards them to the employees, with adding just a question mark. When employees receive the email, they react as they’ve discovered a ticking bomb. They just have a few hours to solve the problems and prepare an absolute explanation for it. Such escalations are Bezos’s way of ensuring that the customer’s voice is steadily heard inside the company.

‘Every story from customer matters, we research each of them because they tell us something about our processes. It’s an audit that is done for us by our customers. We treat them as precious sources of information.’ (stone, 2013)

Here are two ways that Jeff Bezos follows to distinguish his leadership style and his Amazon from others: (blazek, 2016)

a) “Customer is king”

While other internet firms focus on a fun and relaxed atmosphere for their employees, Bezos is proving the effectiveness of another model which is coddling his 164 million customers, instead of his 56,000 employees. Bezos places a huge deal of focus on what the customer wants and doesn’t want. Amazon realizes that consumers hate delays, defects and out-of-stock products. That’s why each of these issues and its smallest detail is continually looked after.

Amazon’s statistics showed that 0.1-second delay in loading a page equals a 1% drop in customer activity, so they work tirelessly to improve the loading rate.

b) “Expect more from your employees”

When Amazon was still just an online bookstore, they had 500 employees for the sole assignment of responding emails. Each one of them was expected to answer 12 emails per minute, and could perhaps be fired if the number dropped below 7.

Working for Bezos isn’t a walk in the park. He has high expectations from his employees and doesn’t apologize for it.

Communication

“Bezos escalation email” is a statement that you can ask people about, it reflects the easiness of access to Jeff Bezos. First, this shows that communication within the organization is fostered by the managers’ accessibility. Second, this shows how responsive and active managers are towards their employees instead of depending on them, even it is an employee complaint or a customer complaint.

Talking about Bezos’s way of communicating, he is pretty strict and straight with being motivationally a great supporting tutor. While in public he seems charming and capable of great humour, in private he explodes into nutters as his underlings say.

If a co-worker fails to meet Bezos’s exact standards he may be fired, and if an employee does not have the correct answers or attempts to bluff, or takes advantages of other’s work, or manifests an uncertainty of internal politics, or weakness in the heat of the conflict, a blood vein in Bezos’s forehead explodes and his filter falls away. He’s capable of overstatement and harshness.

Amongst his greatest hits, collected and delivered by Amazon veterans:

“Are you lazy or just incompetent?”, “If I hear that idea again, I’m going to have to kill myself’, ‘We need to apply some human intelligence to this problem”, after reviewing the annual plan from the supply chain team “I guess supply chain isn’t doing anything interesting next year”, after reading a start-of-meeting memo “This document was clearly written by the B team. Can someone get me the A team document? I don’t want to waste my time with the B team document”, after an engineer’s presentation “Why are you wasting my life?” (Stone, 2013)

‘He is not that kind of person. Jeff doesn’t tolerate stupidity, even accidental stupidity.’

Some employees support the theory that Bezos- like other co-founders- lacks compassion. This leads to him treating workers as expendable resources without taking into account their contributions. That allows him to coldly allocate capital and labour and make hyper rational business decisions, where another executive might let emotion and personal relationships count into the equation. They also acknowledge that Bezos is essentially obsessed about improving the company’s performance and customer service and that personnel issues are secondary.

Bezos’s criticisms are almost always on point. Bruce Jones- a former Amazon supply chain vice president- describes leading a team of five engineers, trying to figure out how to make workers’ movement more efficient and fulfilled. The group spent 9 months on the task. ‘We had beautiful documents, and everyone was really prepared’ Jones says. Bezos read the paper and said, ‘You’re all wrong’ then stood up, and started writing on the whiteboard.

Electronic communication

Technological improvements in workplaces have increased business productivity, quality improvements and efficiency. The emerging challenge is to ensure that technology development, e-communication, knowledge sharing and coordination of organizational activities occur routinely while managing the use and misuse of technology. (Ebsco, n.d.)

The importance of electronic communication in workplace collaboration began to rise in the late 20th century and it includes:

1. Direct communication (voice or text-based telecommunication devices, computers).
2. Indirect communication: an intermediate method, including not limited to Internet-based social networks. It shall also include change of signs, signals, writing, images, sounds and data. (electronic communication between employees and students, 2009)

Email, virtual team rooms and other basic interactive tools provided by the Internet were among the first drivers of dispersed work teams. These tools enable companies to have employees collaborate on projects economically, even when they are located in different parts of the world.

Diversity

A result of the availability of greater electronic communication tools is the increased ability of companies to develop diverse workplaces. Electronic communication tools make it easier for companies to provide diversity training webinars, tutorials and forums online.

Limitations

Electronic communication have limitations. Face-to-face communication remains important to build solid relationships with customers and co-workers. Agencies may use email to approach a potential customer, but agency representatives usually travel to meet with customer executives to sell campaign ideas.

It also lacks some of the efficiency demanded in urgent situations. If a decision is needed quickly, face-to-face or phone conversations may work better.

Also, Protecting the privacy and confidentiality of information is another matter for firms that share information electronically. Some firms also abuse or misuse email and other electronic tools for non-work, non-ethical activities. (kukemuller, n.d.)

Amazon is a company that sells items globally online, for a decent price, for customers who are interested in buying products from their website. Amazon is a large business with over 250 and more employees, this means that the business is extremely popular. Amazon is a public limited company, this means they want to gain profit by being a public limited company. By being a public limited company amazon can offer shares to the general public. The benefits of Amazon being a public limited company is that it will allow the company to have limited liabilities. Another advantage for Amazon being a public limited company is that Amazon can receive investments from banks, wealthy individuals and so on. Shareholders can also benefit from this as they can sell their brand to Amazon.

There are 3 main production steps for a product to be sold in the market: primary, secondary and tertiary. A first step for a product to be made is primary, this is when raw materials like wood, coal and metal and many more are sold to secondary consumers. Secondary is when raw materials are manufactured into production, at this stage once the products are manufactured they are given to the territory to sell onwards to consumers. Territory are sellers, they sell the product onwards manufactured by secondary consumers.

Amazon is a tertiary business they buy secondary materials from secondary factories to sell on or support their brand. Small businesses like small grocery stores purchase quantities of goods from amazon to resell onwards and gain profit.

Across the globe, there are more than 175 warehouses for amazon where they package their products, returns and exchanges. Amazon is a website used globally that is widely available to many countries, when purchasing a product from an international country, it is brought from amazon, amazon then sells and ships their products globally. Amazon engages in charities by giving 0.5% of their net product worth, however this is a customer’s choice to opt in.

Amazon is extremely successful as they are a global company, this means amazon is globally accessible to a lot of customers. One reason for Amazon being successful is that Amazon has their own products such as amazon prime, fire stick and furthermore. One of their main reasons for Amazon being so successful is that they sell products at a lower price, customers demand lower prices for their products as they don’t want to pay a lot. Another reason is that they deliver fast, this can mean that customers will get their products as soon as possible. They also have a wide range of products, attracting a wide range of the customers. Having these advantages will create more traffic resulting in a successful business. However, these so called advantages could lead to disadvantage, as lowering prices can lead to less profit. For example buying an iPhone for £100 and then selling it onwards for £110, in order to make a rewarding profit, the business will have to sell 10 units of the product. Delivering could lead to a disadvantage as Amazon would need to deliver on time, safely and think about how to export.

Amazon aims to extend their business as they have started online delivery services, they have added an option where you can shop groceries online. Amazon’s next plans are to build groceries stores across the globe to increase profit and promote their brand in multiple countries. Amazon plans on knowing what their customers need and wants in order to improve their business.

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

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

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

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

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

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

Introduction

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

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

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

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

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

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

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

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

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

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

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

References

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

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

Four Key Principles

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

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

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

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

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

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

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

Conclusion

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

Jeff Bezos, one of if not the most successful entrepreneurs the world has ever seen, was born in 1964 as Jeffrey Preston Jorgensen to a teenage mother Jacklyn Gise (16 years old at the time), and a teenage father Ted Jorgensen (barely 18 years old), in Albuquerque, New Mexico. Jeff was challenged in his life from a very early age when his parents divorced when he was just 17 months old. That was the last time Jeff ever saw his father, and in 2015, following his biological father’s passing, he revealed he has no memory of him. Jeff was raised by his mother and stepfather Mike Bezos. It is hard to believe that Jeff Bezos is now the richest man in the world with a staggering estimated net worth of 200 billion dollars. In this essay, I will talk about how Jeff achieved this true his traits, attitudes, and behaviors.

Jeff has clearly always been determined and self-driven. He first showed his passion and willpower when, in his final year of university, he turned down some of the most lucrative job offers that could be offered. These included Intel and Bell. Instead, Bezos decided to join a startup known as FITEL, where he learned how to run startups. Soon he became the customer service director of the company. He was also equipped with a degree in computer science and electrical engineering. He then moved on to join Bankers Trust. He worked there for a couple of years before joining D.E. Shaw & Co., where he later became senior vice president. This showed his determination and drive to be the best and get there quickly.

However, it was when he noticed how much Internet usage had risen (2300%), we started to see the innovative side of Bezos. He then studied the most profitable mail businesses and decided to start selling books on the web. It was at D.E. Shaw & Co. he met a woman by the name of Mackenzie Tuttle. She helped Bezos and was instrumental in the formation of the new e-commerce business. Bezos decided to quit his top wall street job and move to Seattle to set up Amazon. This showed Jeff was a risk-taker, but it was well and truly a risk that paid off.

Like many top businesses in the United States and all around the world, Amazon started from a garage. As any parent would be, Bezos’ parents were concerned about him leaving his post at a capital market job to start selling books from his estranged garage. It was then that Bezos made clear to his parents his passionate attitude towards this dangerous adventure and got them on board with him. Amazon experienced unbelievable success from the very beginning. Within 6 months he was selling in all 50 states of America and various locations across the globe. In the year 2001, Amazon made profits of 5 million dollars, and Bezos’ life changed forever.

Personally, I believe that a successful entrepreneur must be a generous individual. Jeff Bezos has always shown his generosity throughout his success. In 2018, Bezos pledged 2 billion dollars to homeless families and to expand the network of preschools in the United States. Jeff is also a keen supporter of same-sex marriage and is known to have made many donations to support this cause.

Every successful entrepreneur must be intelligent and able to identify opportunities. This is vital for profits and long-term success. Bezos has always been a smart investor. In 2013, he purchased the Washington Post Group for a staggering 250 million us dollars. He also showed his knowledge when investing 1 million dollars in Google in 1998, which now equates to 1 billion dollars. Netflix used to distribute its content to millions of American households around the clock when Bezos founded Amazon Web Services. Bezos signed a contract allowing businesses to utilize Amazon servers for this reason. He lowered the fees for businesses that use his servers. When told that he would be losing money over an extended period, he remarked: “More profit means attracting more competition”.

As I touched on earlier, every single entrepreneur must be willing to take risks to gain success. Without risk-taking, entrepreneurs face an uphill battle to pass their rivals. It is often the case that it must be a new idea that grips and attracts potential customers. This is emphasized by Jeff Bezos who has previously stated: “Let me assure you, I can guarantee you that none of these ideas are guaranteed to work. All of them are gigantic investments and they’re all risks… The only way to get above-average returns is to take risks and many won’t pay off. Our whole history as a company is about taking risks; many of which have failed and many of which will fail, but we’ll continue to take big risks”. This shows just how important taking risks is for multimillion-dollar entrepreneurs to be the best.

An entrepreneur who has risen to the top of the business world must also have a ruthless streak and must not take accept any complacency. Jeff Bezos’ tolerance for complacency is again a prime example of this. He simply doesn’t have any. He accepts only the best from his employees, and anything less than the best is sanctioned accordingly. Jeff also is a highly competitive entrepreneur and loves the competition. In fact, his end goal is to eliminate the competition, even if it comes at an initial cost to his company. An example of this is, of course, when Amazon had once targeted a fellow competitor dealing with child products; they dropped their prices dramatically to eradicate the rival from standing in the competition altogether, and eventually, the rival company collapsed. As usual, Jeff came out on top as a winner. Jeff Bezos is a serial winner. This is an essential characteristic and personality to be the best.

I must also state how vital it is for entrepreneurs, especially up-and-coming entrepreneurs, to always put the customers first. Customer satisfaction and brand loyalty are so important for every business. Jeff Bezos has gone to new levels to satisfy his customers. He has even created his own public email so every customer can email their complaint directly to him. He has also previously stated that “the best customer service you can offer is if the customer doesn’t need to call you or talk to you it just works”. This show that Bezos tries to prioritize customer satisfaction so there isn’t any negative backlash on his company.

To conclude, I feel Jeff Bezos is a prime example of what every young and aspiring entrepreneur should aim to become. He has all the right principles, and his principles didn’t change, even though his wealth did. He has all the traits and personalities needed to become a successful entrepreneur.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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