Category: Amazon

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

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

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

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

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

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

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

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

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

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

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

Works Cited

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

Amazon is the world’s largest online shopping website that helps people to order things in one click. During the initial stage of its business, Amazon was a bookseller, then gradually they expanded their company by selling a wide variety of consumer goods, electronic devices like mobile phones, e-commerce, and logistics, and Kindle was a huge hit among the people.

Amazon has innovated and executed a model called ‘everything under one roof’ where people can shop for anything on their website with ease. Customers experience a wide variety of options, but they do not have a clear insight into what to buy and which product is the best from the customer’s point of view. To overcome this problem and to help customers decide, Amazon started using big data to gather information from the customers who bought the product or who viewed the product, from which they created the recommendation engine. The more Amazon knows about you, the better it can predict what you want to buy. Once they have a clear picture of what they want to buy, the website comes up with similar recommendations instead of making the customer search through the whole catalog. Amazon gathers data from every single individual who uses its site. It keeps track of what you buy, and most importantly, it can even make a good guess on your monthly income based on your shipping address. This huge amount of data that is gathered from the customer is used to come up with a ‘360-degree view’ of an individual customer. Amazon then finds other people who fit into the same category and makes recommendations based on what those other customers like.

These are the ways Amazon uses big data to stalk customers:

1. Personalized recommendation system. Amazon is one of the leading companies in using a comprehensive collaborative filtering engine (CFE). It keeps track of what you purchased last time when you visited the site, what is in your wish list or cart, and what items you have viewed the most. This information is used to recommend additional products that other customers purchased when buying those same items. For example, if you are looking for a swimming suit to buy, it will come up with similar products that other customers purchased like swimming goggles, shower caps, etc. By using this method, Amazon uses the power of suggestion to recommend you buy those products. This method generates the company’s sales annually by 15%.
2. E-book recommendations from Kindle. When Kindle was launched, it was a huge hit among people in various age groups, which had kids and adults, and there were approximately 25 million users. Kindle had a great feature where the reader can highlight important words and phrases and share them with other readers who are reading the same book. Amazon on a regular basis views what you have read, and it finds out what fascinates you the most based on this they send you recommendations on other e-books.
3. One-click ordering. By the use of big data, Amazon concluded that people order only from websites that are very quick in delivering their products to the customer. So, Amazon came up with an idea called ‘one-click ordering’. When a customer places their first order along with their shipping address and payment details, the company gives you a grace time of thirty minutes in which you can decide whether you want the product or not. After the time limit, the payment will be made from the account, and the product will be delivered to the shipping address mentioned.
4. Anticipatory shipping model. Amazon’s anticipatory shipping model uses big data to predict what products you are likely to buy and which city you are from. Based on this prediction, they send the products to the nearest distribution center, and when you order the product, it is sent to the customer’s place. Thus, Amazon uses predictive analysis from big data to increase the sales of the product while reducing the delivery time, which might attract customers.
5. Supply chain optimization. In order to reduce the shipping time, Amazon connects with the manufacturers, and by the use of big data, it finds out the closest warehouse between the manufacturer and the customer so that they can reduce the shipping cost by 10 to 40%. In addition, they use graph theory to help them to decide which is the best delivery schedule and which is the shortest route, which helps them to reduce the shipping cost.
6. Price optimization. Big data is also used for determining the price of the product, which attracts more customers by giving a lot of offers, which increases the profits rates by 25%. Prices are usually determined based on the requirement of the product among customers, product availability, competitors’ prices, etc. The price of the product changes every ten minutes because the big is updated frequently.

Though there are many ways how big data can help Amazon grow in its business, using big data has one fundamental drawback. I feel that people have no privacy whatsoever about their personal information and everything that customers have access to, from what they view a product to what they buy and where they live, these things are routinely tracked in the name of big data.

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

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

Importance of positioning:

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

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

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

Amazon

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

Service Positioning Used by Amazon

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

Analysis of Amazon’s Service Positioning

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

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

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

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

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

Suggestions to Amazon

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

Flipkart

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

Service Positioning Used by Flipkart

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

Analysis of Flipkart’s Service Positioning

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

Flipkart also have some competitive advantages like:

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

Suggestions to Flipkart

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

Conclusion

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

Learning from Assignment

Following are the learning from this assignment:

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

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

Issues

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

Major Strengths of Amazon

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

POLC Lead to Success or Failure

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

Most Important Thing Leads to Success or Failure

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

Major Challenges Facing Amazon in the Next Five Years

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

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

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

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

Leadership Style

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

Motivational Style

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

Human Resources Management Practices

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

Change and Innovation Process

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

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

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

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

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

Amazon’s Management Functions

Planning

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

Organizing

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

Leading

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

Controlling

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

Every enterprise and every business exist to attain its goal, both social and business goals. Information system is crucial for the continued existence of any business. Amazon is one of the major E- commerce worldwide with the large number of its customers. Amazon uses information systems in its business processes to gain more advantage through their customer’s personal information. Therefore, this report is about how organizations like Amazon use information system as a gadget to obtain its ambitions. The role of enterprise resource networks system is extremely critical for these types of businesses to collect data. E-commerce organizations have strong relationships with their customers.

Organization Overview

Amazon has grown itself as a giant of E-commerce in the world. It was founded by Jeff Bezos in Bellevue, Washington in 1994. The company started as the marketplace for online books, but Jeff Bezos believed Amazon is not just an online book seller and expanded overtime selling electronics, video games software, housewares. Simply Amazon now is marketplace for everything from the expensive software to the zip for pants. Amazon managed to grow its revenue from $15.7 million in 1996 to $148 million in 1997, followed by $610 million in 1998 making Jeff Time magazine’s 1999 Person of the year in 1999 (Hall 2017). Since then Amazon has been growing popularity, its services, and profits in a Sky-rocketing way.

Amazon today provides delivery service for its goods in most part of the world. One can compare prices and products easily and get it straight to the door. The plus point of Amazon is one can also sell their stuffs. Amazon Web Services is a largest Web service provider in the world. It also provides the streaming of selected movies and TV programs through Amazon Prime. Amazon have got it is branched all over the globe today marking its success and able to prove itself as the people’s favorite.

Business Model

Business Model is the backbone for any system to keep its existence. It shows business about its revenues over a time. It will help the organization to propose a financing for future. The business model of Amazon was to sell the books at initial stage which later developed to sell everything and over a time it has developed its subbranches and started providing web services and stepped into an entertainment industry too.

Today Business Model of Amazon is not like what it seems to be. The truth is amazon does not make any profit from the goods that they sell from their website actually report have shown that amazon makes a loss by selling the products and delivering them to the people. The true revenue they gain is from its subsidies. Amazon Web Services offers affordable plan for other business to host their website. AWS services though cover all the losses the company has been bearing. In 2017 AWS made $17.5 Billion making profit of $4.3 Billion covering the loss of $200 million of its marketplace.

Amazon also stepped into the entertainment business through Amazon Prime Subscription which provides different plans and schemes generating revenue for the company. Moreover, Amazon also earns companies like IMBD, audible, Zappos.com, twitch and Whole foods which worth a lot in a market.

Website

Amazon Website Content

It is a very vast topic to discuss about the amazon content as it provides the services from agricultural equipment’s to the highly developed technological firms. Before going into detail for the content we will take few major categories and strategies of amazon website content. First, amazon is preferring more to the user experience over the business by following the Technology Acceptance Model (TAM) which basis on ecommerce. According to this model, major determinants are the perceived usefulness and the perceived ease of use, which contributes the user behavior experience and proves to be actual system use (Chen & R., 2005).

This is the reason that amazon started all its services in eight languages, more than sixty currencies of different countries and provides the tracking number from the confirmation of the order to the delivery of the product to the customers. In short, amazon gives the values to the customers which is hunger of every human being. This is the only reason that amazon extended its operation and added the kitchen and cooking products for the cooking lovers, games accessories and movies for the enjoyment in leisure time. Home decor and IT gadgets were added for the sake of demand from many communities, even though Amazon started the drop shipping when people got busy and couldn’t find the enough time to buy the value le gifts for the family members and friends. To meet the demands of the customers amazon upgraded its interface and content for the purpose of development but has to tackle with many issues during this process for the time being but it achieved the central position in the skeleton of ecommerce.

Hardware

A big organization as amazon must be smart and careful while building their hardware infrastructure, they must investigate each aspect of it like price and quality. Amazon buy its components from Commodity (cheap manufactures as compare to Branded competitors) and by anyhow they are not able to provide a component which amazon desire, Amazon become ferocious negotiator. Question arise that being a one of the top organizations why amazon does not buy Premium-priced equipment as their components are more durable comparing to Commodity parts. Amazon operates at massive scale, around 500,000 servers are being used in web services it does not matter at that level of usage from where the equipment is emerging. As said by Golden (2013) “at a very large scale, even highly reliable individual components still result in an unreliable overall infrastructure because of the failure of components, as rare as the failure of a specific piece of equipment may be”. Amazon operation also affect some other aspects of its hardware infrastructure, data centers also contain generators and batteries for that specific component amazon uses custom-designed equipment.

Software

Amazon launched with only one instance and operating system Amazon Linux but with the time as it expands now amazon provide more than 30 instance and 10 operating system but Linux remain the core technology. Services provide by amazon are S3 for storage and EC2 for computer service. EC2 been used for everything from media and web hosting to development and test environment. Amazon Linux is its own version of operating system; Amazon have been enhancing Amazon Linux owing to the requirement of customer. Amazon assures that its Linux is the most optimized version of Linux to use within the EC2. Amazon divided team to work on machine learning and the development of Linux Kernel, Xen, and Amazon Linux. Anyhow amazon find a bug within the Linux instantly they send a patch upstream. Its less demanding for amazon to ingest such fixes with the release of other Linux Kernel than having to preserve our claim fix sets with bug fixes.

Security Issues

Security issues have a huge effect on the growth on ecommerce platforms like any website. Many well-known organizations are being trapped by the hackers with different types of attacked. Hackers play different tricks to get the platforms into trap. They mostly use a ransom ware and steal the sensitive data from the organization and misuse it, these data can be names. date of births and credit card details of the customers. Similarly, Amazon.com fell prey to a such cyber-attack in in 2010. In which the hijackers used Cross site scripting (XSS) to gain the credential of amazon. Afterwards they managed to get the access to the backend of amazon and the database management system in of Amazon.com. That was the critical time for Amazon because the hijackers were able to capture the login details fir anybody who was trying to login into any web page on amazon. Those hackers did not merely stop there, they used a trojan horse known as ZEUS to infect the servers and machines of amazon and even computers began reporting to for updates and instruction. After struggling from this time amazon started to increase its security and add the multi factor authentication in their system (Mosca, P. et all).

Payment and Transaction Process

In this technocracy era, technology has been so advanced and developed that instant result may be achieved. Amazon is one of the proverbial online marketplaces and the best example of E-commerce as it provides numerous ways of making payments or processing transactions along with best customer service. There are some of the methods used by the Amazon for making payments such as:

1. Amazon ZIP pay. It is known as ‘pay at you pace with zip’ as user need to make a zip account and link it to Amazon. Basically, in this money is deducted from your zip account and user is liable to pay back to zip account instead of amazon as the terms of their account. Zip pay has two units: Zip Money and Zip Pay. Zip money is just a credit up to $3000 with an interest but free period of six months however, Zip Pay is credit up to $1500 which is always interest free.
2. Amazon gift cards. Amazon gift cards are issued by the Amazon in which the user can redeem that card on any purchase or can save that amount for future use on any other item.
3. Amazon pay or Amazon Pay Code. Amazon Pay is an online way of making transaction with the Amazon and with the other third party or e-commerce sites whereas Amazon Pay Code is a technique of making payment in cash via western union or other agents. It is a convenient way as the customer needs to order first and then make the payment in cash through respective agent. The order will be shipped to the customer within the mentioned time (Billing and payment fundamentals FAQs Payment options.
4. CBA (checkout by Amazon). It a method in which the normal checkout of a consumer is secured by the Amazon’s security servers in which consumers can choose their shipping methods but they need to enter the details of their credit card on the Amazon site.
5. Pay by invoice. It is a suitable way for the business customer to pay for the goods and services which was purchased on credit before.
6. Amazon Prime Store Card. It is a card provided by the Synchrony Bank which is helpful for the users who often shop online. It is an Amazon Prime Store Card i.e. can be used on the Amazon purchases only as this card provide 5% back on all purchases which is significantly advantageous for the customers.
7. Credit cards and debit cards. Credit cards, debit cards and other cards like master card, visa card, American express so on and so forth are accepted by Amazon. Debit card can be used for Amazon Prime as well. All the transactions are monitored and verified under the surveillance of advanced security servers.
8. Linked bank accounts. It is basically a checking account that can be used instead of a credit card but there are some restrictions on purchasing some products or services through checking cards.
9. PayPal. Although PayPal is one of the easiest ways of making transactions, yet Amazon does not accept the direct payments from PayPal i.e. there are some sidestep that allows the user to pay through PayPal on Amazon. Generally, PayPal requires two step authentication which is very time consuming. Moreover, PayPal is basically having a strong connection with eBay and unintentionally PayPal affects the Amazon payment system of Amazon Pay. That is the reason that Amazon does not accept direct payment from PayPal (Bhandary, B. (2019)).

These are the different techniques for making or processing transactions by Amazon which is more secure and confidential as SSL (Security Sockets Layer) technology is used by the Amazon for the authorization of e-transactions to keep it more safe and secure. To secure the transactions on Amazon, the server always asks for a two-step verification of every transaction which is further protected by the topmost secure technology i.e. SSL or TSL (Secure Socket Layer and Transport Security Layer). Nowadays, the Amazon system is so advanced and developed as there is appropriate scrutinizing of confidentiality and authentication of every activities to make that system free from cybercrimes and other fraudulent activities or unauthorized access. Proper encryption, digital signatures, message authentication codes (MAC), SSL and TSL secure servers are the functions and techniques used by the Amazon to maintain the privacy and the trust or satisfaction of the customers.

Recommendations

As per the SWOT analysis and overview of Amazon, we would like to recommend that for more expansion and development of Amazon in the global market, Amazon should try to overcome its weaknesses i.e. limited or insubstantial discernment in today’s global market which ultimately be a great hindrance in economic growth rates of market on the way of its establishment. Although, Amazon is a proverbial e-commerce marketplace, yet its workforce needs to work on its business model or to make some unique changes. In this technosavy and competitive era, it is extremely easy for the other competitive markets to resemble them or to adopt their strategies or business model for their own benefits. Furthermore, pricing sometimes considered as an obstacle in the advancement of the company due to the rivalry or oppositions which significantly lead to pricing battle. In addition, changes should be made on the website too; to make it more alluring and uncomplicated for the users. International delivery of products should be efficient and effective so that it will eventually attract even more consumers which is worthwhile and productive for the company to maintain its prestigious positive in this marketplace.

Conclusion

To conclude, this report evaluates present scenario of Amazon through the information system. It is proved from this report that there is a large scope for Amazon to expand its business through enterprise resource planning. Moreover, Amazon is a free from cybercrimes or fraudulent activities. Its proper privacy, proper payment method and great quality products helps in the satisfaction of the customers and to expand the business. All in all, Amazon is now the worldwide famous and most preferred company by the customers.

1 Introduction

Amazon is now a Fortune 500 e-commerce company that is headquartered in Seattle. It is one of the first large companies to introduce the idea of selling goods over the Internet. The company was founded by Jeff Bezos in 1994. Amazon was initially an online bookstore which later diversified to selling other items such as DVDs, music, video games, electronics, and clothing. The company has been credited as being the reason for popularizing online shopping. Amazon is also considered a customer-centric company or even “customer-obsessed”. This implies that the company truly believes that they needs to listen to their customers or else the company will fail. When compared to Google, Amazon also operates differently from them in the sense that they are very frugal with their resources (Schneider, 2018).

The main purpose of this report is to provide an in-depth business analysis report for Amazon, understanding its institution base view, resource base view, and entry strategy. An internal and external analysis will also be included to determine what factors or resources affect the company and its global operations. A Resource-based view of RBV is a model that uses resources as the key to the superior performance of the firm. This includes the VRIO framework in order to determine the resources that enable the firm to gain and keep its competitive advantage. An institution-based view is when the company considers the formal and information institutional environments (Garrido, et al., 2014). These aspects will be discussed in the next few sections of the report.

2 External Business Environment

2.1 Institution Based View

The concept of an institution-based view can be applied as a perspective in strategic management along with the resource and industry-based views. It is also based on the buyer’s perception that having effective third–party institutional mechanisms would facilitate the company’s transaction success. It is a crucial aspect of online marketplaces such as Amazon to increase trust in institutions.

A study was conducted based on 274 buyers using Amazon’s online auction marketplace as a way to provide support for the proposed structural model. The study concluded that Amazon was perceived as an effective institution with effective mechanisms that have both “weak” market drivers and “strong” legally binding mechanisms. These would therefore create more trust in the sellers as a whole community which makes the entire marketplace more effective and trustworthy (Pavlou & Gefen, 2004).

2.2 Amazon’s Formal Institution Base View

In order to access the institutional base view of Amazon, there are some factors that can be analyzed, including political, legal, and economic factors as described below:

2.2.1 Political Factors

Amazon is an e-commerce business that can also be affected by political stability and government efforts to increase cyber security. The political factors are the external factors such as government activity and how it affects businesses and their macro environments. The three factors in this case are the political stability of developed countries, governmental support for e-commerce companies, and the increase of government efforts on cyber security.

The political stability in any country that Amazon operates in will be an advantage to the company as it allows it to continue to expand and diversify its range and reach. This is also how the company was able to expand its initial online bookstore business to an e-commerce platform where customers can get all kinds of products. Government support is important, especially with the advances in technology and new innovations. e-commerce is widely supported by the government which would make it easier for the company to expand to new areas by receiving such support. However, this could also be an advantage for their competitors who are in the same e-commerce business. One good example is the way Chinese companies are expanding their online presence and trading ability to go across borders and provide services to customers worldwide (Ritala, et al, 2014).

2.2.2 Legal

The legality issues surrounding the buying and selling of goods online are serious for many countries. There are certain regulations that have been set on the practice that need to be adhered to. Some of these factors are the increase in product regulation, a decrease in import and export regulations, and more environmental protection regulations.

The product regulations are a direct result of the way society demands trust from the organizations. The act of purchasing something online can be risky as sometimes there is no guarantee the item will arrive at the correct location. However, this provides the opportunity for Amazon to fortify its brand and reduce the sales on fraudulent sites for online retail. The import and export regulations can be an opportunity for the company to continue to grow and expand its global operations to take advantage of this ease in regulations by increasing its ability to serve its customers from remote locations. Strengthening its brand image is another way that the company can increase trust and differentiate itself from other companies. This can be a good way to remain ahead of the competition as well. Regulatory compliance is also one way the company can remain in business and maintain its success in e-commerce (Molla & Licker, 2001).

2.2.3 Economics

The economic situation is usually a very important factor in the way an institution is being run as it determines the demand and supply of the product. Amazon’s performance is therefore dependent on the situation of the economy in the countries it operates and runs its online business. The trends in the economy have the ability to affect the macro environment of any kind of industry and this is no different. The main factors that would impact the institution are the economic stability of the most developed markets, an increase in disposable income in developing countries, and the threat of a potential economic recession in China home to some of Amazon’s largest competitors.

An e-commerce business is more profitable and viable in developed countries therefore, the economic state in these countries is a factor that will affect the macro environment of Amazon. There need to be fewer risks for the company as it continues to expand its online retailing business into new areas. Another growth opportunity for the company is in developing countries where people have more disposable income to spend on things they can purchase online. This would result in a boost in the company’s performance as it is generally a new market. The final factor regarding the Chinese potential recession would increase the threat that the market poses to Amazon’s operations. The Chinese market is still yet to be captured by Amazon and penetrated especially due to the existence of local e-commerce sites. Though this presents a challenge, it can be a good opportunity for the company to create a better strategy to penetrate that new market (Greenspan, 2017).

2.3 Amazon’s Informal Institution Base View

The aspects of the information institution base view include the sociocultural factors as well as the business ethics and norms that the company adheres to when operating.

2.3.1 Socio-Cultural Factors

The societal behavior and cultural factors of Amazon’s customers will also influence the institution and its growth in the long run. As a company that is focused entirely on their customers and pleasing them, this is very important for their expansion and growth. Some factors such as an increase in the wealth disparity, an increase in consumerism in developing countries, and an increase in online buying habits are what influence the company (Hong & Zhu, 2006).

The increase in wealth disparity refers to the larger gap between the poor and rich communities in many countries. This is a threat to Amazon as the amount of people with disposable income becomes limited to the richer people. More consumerism is a factor that is present in many countries, especially with the increased ability to access online platforms and therefore online retail shops. This would benefit the company’s expansion plans as well.

2.3.2 Ethics

The idea of business ethics in Amazon has been written about countless times with people often asking the questions of how ethical it is for customers to shop using the website. The company has a huge profit margin and is said to be on its way to being the first trillion-dollar company by the end of 2018. There are many studies that show the way other retailers that work for the company are being exploited which reduces the status as rival of Amazon.

According to a study conducted by the Harvard Business School, the new sellers who list new products on Amazon have their transactions monitored by Amazon. Then Amazon began to sell their most popular items as well. These tactics are known as Machiavellian which refers to the extreme lengths that a person or in this case company regardless of ethics in order to remain ahead of their competitors (Benner, 2009). This raises the question of whether it is more important to behave ethically or to earn a good reputation in order to achieve business success (Eluxe Magazine, 2018). Despite their use of such tactics, the company has not received a huge amount of backlash from the market as buyers are often only looking for a bargain and the fastest shipping.

3 Internal Business Environment 1100

3.1 Resources Based View

The resource-based view refers to a model that sees its resources as the way to achieve the best firm performance. This includes reviewing the VRIO framework which is a tool that can be used to analyze how the firm’s resources and capabilities can be used to sustain its competitive advantage over others (Jurevivius, 2013).

3.2 Resources & Capabilities of Amazon

The first step when looking at the kind of resources that a company has is to identify the tangible and intangible resources that have been shown in the table below:

• Tangible Resources
• Intangible Resources
• Physical – Technology, Amazon fulfillment centers
• Human Capital – Culture, training, and talented workforce
• Financial – long-term sustainable growth in the form of free cash flow
• Reputation – brand names, partnerships with other companies like EMI records
• Technological – The Amazon Web services and currency converter
• Innovation and Creativity – The one-click solution when shopping online

All the above can be used together in conjunction with the company’s core competency of continuously working toward innovation. Some of the most important resources and capabilities of Amazon are its brand image and equity, large customer base, global presence, customer loyalty, technological innovation, and huge product range (Pratap, 2018).

1. Brand Image and equity: Amazon has a huge customer focus in its image which is a focus of its competitive advantage for the brand. The company has managed to create a high level of trust which is based on the products it sells and the services it provides.
2. Large customer base: As the leading online seller in the world, it has one of the largest customer bases from every corner of the world. This is a huge advantage for the brand as an e-commerce company.
3. Global Presence: The company has expanded and continues to expand to areas all over the world which has given it is huge network and resources all over the world.
4. Customer loyalty: The company’s focus on their customers has paid off and helped them maintain a high level of customer loyalty in order to retain a very large percentage of their customers for their lifetime.
5. Technological Innovation: Technological innovation is a source of its competitive advantage as well. It enables Amazon to provide a unique and better customer experience through the management of its websites and such. The brand also spends a large amount of money on its research and development.
6. Huge Product Range: The number of products on Amazon is huge closer to hundreds or millions of products from over 2 million merchants worldwide. This also gives the company a competitive advantage over the others.

Other resources that can be accounted for are their acquisition of Whole Foods along with the use of their 2–day free shipping service. The acquisition of Whole Foods cost 13.7 million dollars for the company but it has converted the online giant into a physical entity. The advantage of this is that they do not have to build any more stores as they already exist, instead, it can be an opportunity to introduce their Amazon–Go. Amazon–Go is a service that allows customers to walk into the store, pick up anything, and walk out with no waiting lines to check out or self–checkout systems. The items are automatically charged to the customer’s Amazon account. This new service has the potential to completely restructure the idea of grocery shopping as we know it. This is not very rare as there are many other grocery shops that already exist in the US such as Walmart, Schnuck, Save-A-Lot, and more. This idea is also not very costly to imitate, especially for their competitors who also have existing structures that they can use. Whole Foods is not truly unique, although the introduction of the Amazon–Go feature may make it stand out (Hoban, 2017). The VRIO framework refers to the Value, Rarity, Imitability, and Exploitation that the company undergoes (Jurevivius, 2013).

1. Value: is the resource or capability valuable for the firm and can lead to more opportunities to defend the company against threats?
2. Rare: how rare is the resource, is it readily available or can it be easily acquired by the competitors
3. Imitability: Are there many available substitutes for the resource or capability?
4. Exploitation: is the firm properly using its resources to the maximum ability?

4 Entry Strategy

4.1 Strategies to penetrate the Chinese market

The challenge of opening an online retailer in China is something many foreign e-commerce companies struggle with. The main competitors of Amazon in China are Alibaba and JD. In 2016, Amazon had only 1.3% of the Chinese Market which went down from the 2% it had in 2011. The restrictions set on foreign companies in China have always made it difficult for international companies to expand there.

Amazon’s response has been to purchase a local online bookstore as their starting place to provide an online marketplace for their Amazon Kindles. Kindle is one of the most popular e – e-readers in the West, ranked in the top 5 western brands on Alibaba’s Tmall. After acquiring the local company, it was renamed to Amazon. cn to create its brand presence in China as well. Part of their strategy is also to analyze the data based on the Chinese customers’ purchasing behavior and what needs are still unfulfilled. Amazon then prompted the distribution of its CPG goods through three brands names Mama Bear, Wickedly Prime, and Happy Belly in order to penetrate the market and make its way up to the top of the market. These brands could later on be named Amazon Diapers, and Amazon CPG which brings more attention to the brand name (Marketing China, 2016).

Another strategy Amazon had some success within the Chinese market is through cross-border transactions by leveraging its global logistics platform to maintain some of the market share in China as an importer of foreign products. This strategy involved Amazon encouraging its network of over 2 million merchants to use the company’s international markets rather than only focusing on the US. The launch of Amazon Prime in China also led to an increase in control of China’s cross-border transactions in 2016 by up to 7%.

The company has also taken advantage of the demand for foreign products which are considered more authentic and safer for the rising Chinese middle class. This resulted in an increase in the number of products that were sent to China. Along with this strategy, Amazon also advertised more positions in Chinese digital content production in order to create ads and promotions that are specific to the locals using their local TV and entertainment media (Business Insider Australia, 2017).

Amazon is known for its low prices and loss-leading pricing strategies. They have prices that are the hardest to beat, however, this contributes to its low-profit margin as well. It also uses a dynamic pricing strategy which involves changing its pricing according to the fluctuations in demand based on the web traffic. This strategy is similar to airlines where Amazon will adjust a price if they notice you have visited the product before in order to influence you to make a purchase (Shpanya, 2014).

4.2 Advantages and disadvantages of using this strategy

Advantages

• Increase in the transactions from China across borders due to the increase in demand for foreign products
• Acquiring the local companies will create a customer base before the companies change their names to the Amazon brand to increase their recognition. This will help increase its market base.
• Amazon is popular worldwide and sells more than its next 12 competitors combined.

Disadvantages

• Amazon is up against the competition of Alibaba which has a 50% profit margin compared to Amazon’s 0.54%
• Its largest competitor in China is Alibaba which is growing rapidly and is widely popular in the Chinese market.
• Regulations surrounding foreign company activity in China make it difficult to expand quickly.

4.3 Current Strategies Amazon uses

There are certain strategies that the company currently uses that can dominate any market, these include the following (Emmer, 2018):

1. Amazon Prime: this is perhaps one of its more valuable resources and strategies to date as it has over 100 million subscribers which makes it the most successful loyalty program of all time. Its increased use of Amazon Prime will act as a barrier to entry for external companies trying to enter the market.
2. Fuel for small businesses: Amazon provides a service called Launchpad for start-ups as well as financing to new ventures within the e-commerce services sphere.
3. Home delivery and supply chain logistics: The company has an airborne fulfillment center where products can be delivered by drone from a blimp line contraption. This is one way the company has integrated third-party logistics technology into its products. In order to fulfill their 2-day delivery, the company has huge expectations and pressure on its logistics to build better networks to satisfy the growing demand.
4. Artificial intelligence: The introduction of Alexa – a virtual assistant has changed the market that was dominated by Apple’s Siri. Alexa offers many more services such as zero-click which has the power to revolutionize shopping as it gives the user the ability to restock on needed suppliers through verbal commands.
5. Healthcare: The company is planning on entering the healthcare industry by providing pharmacy services. There is some danger in this if the healthcare inflation remains unchecked, it has a huge potential to explode into a huge new market. the company has also formed a joint venture with Cardinal Health and other distributors in order to increase their reach of medical devices to hospitals and others.
6. Geographic Expansion: As stated in the previous section, Amazon is trying to expand to emerging markets such as Asia and the Middle East as there are a lot of opportunities in these areas for providers.
7. Acquisitions: Amazon has been known to acquire many different companies such as GameSparks and Blink Home Security as it continues to expand its platform. This is part of its strategy to become one of the most valuable companies in the world. This increases their participation in a diverse group of industries.

5 Implementation

Some of the key processes that need to be undertaken to implement the strategies in China for expansion include liaising or creating joint ventures with local companies. This is a good way to build a customer base by using their acquisitions’ existing customer contacts. The timeline for their strategy depends on the degree of expansion that the company wants as well. They have been trying to break into the Chinese market for some time now, and their new strategy of using cross-border transactions can be the key. This can take up to a year. Also, their plan to introduce more ads on local platforms in China that adhere to the regulations and appeal to the masses is another way to implement their marketing strategies and growth as well.

Human resources are something the company is already working on, as they have advertised hundreds of local positions in China for their retailing and technological teams in the country. This will both increase their recognition in the Chinese market and their likelihood for success. The introduction of Amazon Prime in the country and the attractive discount packages for the members could also be a drawing point for the Chinese consumer who wants access to foreign products.

6 Conclusion

This paper has looked at the international external business environment of Amazon on a global scale. Particular attention was paid to the strategies the company is using to enter the Chinese market that is largely populated by the Alibaba group. The analysis methods used are a VRIO framework which looks at the resources and capabilities that the company has and how it can help them achieve their goals. An external analysis was also conducted to determine what external factors can affect the way the company does business worldwide.

7 Bibliography

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Elijah Bailey

Professor Humphries

Business Administration

9-15-21

Amazon’s Situation Analysis

Situation analysis or SWOT is the internal strengths, weaknesses, external opportunities, and threats that help a business understand where it may stand in the world. The swot analysis is a type of strategic tool used to help companies plan, as they are constantly evolving internally and externally. It is an often-used strategic tool in firms all around the world, to help businesses strategically plan. For instance, Amazon uses situation analysis to identify its competition and to find ways to keep its competitive advantage against other companies. Amazon began on July 5, 1994, by CEO Jeff Bezos, as an online book shop in his carport, and afterward, he changed it into one of the world’s biggest online retail marketplaces. By identifying the company’s strengths, weaknesses, external opportunities, and threats Amazon had the option to expand its company’s influence and carry out business overseas.

Amazon, being one of the largest companies in the world, has many strengths that help give the giant e-commerce company an upper hand in the market. Amazon has a strong brand name that is recognized around the world in many different countries. Their logo is a smile that has been very beneficial in the company, as it helps Amazon to be successful and reliable as it delivers products and services to its customers every year. The brand name Amazon is worth a total of 415 billion dollars. Their logo is important because it helps Amazon sell hundreds of different varieties of products from A to Z. That alone shows people just how big the market is and how it continues to grow in the future. The company has a very secured market position being the largest in North America it competes with the likes of Walmart and eBay. There is only one main rival in Amazon’s emerging markets, which is Alibaba. Their position comes from their corporate ethos of robustness, which helps keep their prices low and their customer’s and clients’ value maximized. To keep the position of the market leader, it invests in the future by using Amazon Prime to help with service errors. They have used improvement logistics and delivery tactics by managing a multitude of individuals, third-party sellers, and clients by partnering with delivery businesses, and by turning facilities into 247 operations during the holidays. Amazon also has the biggest influence of independent partners, which creates opportunities for individuals and companies across the country to be able to reap all the benefits that Amazon has to offer. Go Global and Act Local procedure is used by Amazon and the best advantages feasible for them have been because of this system. From that point onward the association with neighborhood supply chains and in reverse incorporation helped as well. Also, essential item situation, and understanding neighborhood needs before dispatching administrations by the nation’s way of life have helped as well. Inferable from these, it stays on top even while contending seriously with different opponents. The last strength that Amazon has to offer is that it hires workers at 15$ an hour. It has positions for full-time, part-time, and seasonal times which helps open more job opportunities now and later. These strengths have helped Amazon keep the lead on its competition as it continues to evolve around its competitors as time goes on.

Amazon has a lot of weaknesses that the company needs to improve on. The internal qualities and resources that make it difficult for companies to reach successful outcomes in the company. Often, many companies have weaknesses that are inhibitors of future success. Unfortunately, Amazon’s business model is being copied quite easily. Since there is a pandemic due to Covid 19, the online economy has increased significantly causing local and national players to take up the market. Due to low cost, players continue to persuade customers to operational or core abilities. For instance, grocery divisions are highly competitive to meet consumer requirements to meet the growing demand. The near-zero margin business model is a major weakness that many players operate within, which often affects profitability. Even though the company Amazon has high revenues and volumes at a constant rate, it fails to make profits meaningful for the firm. The company’s “Amazon Indian Festival” was not living up to its name since its high profits the company despite breaking sales records annually for the mega sale. By allowing free shipping under $25 the company can be exposed to a threat even though it constantly has managed to stay afloat. Amazon is constantly hurting the brand’s image by doing fake reviews and ratings for the company. The company engages in inferior quality and often sells products under the brand name Amazon Basics. Which is selling higher-rated products at lower prices. In countries like India, there are no physical inhibitors that will stop them from reaching untapped market potential. Using the swot analysis, Amazon can get a sense of what weaknesses they need to improve as they evolve.

Amazon has many opportunities that need to be analyzed by the swot or situational analysis. In the swot analysis, opportunities are described as external factors that can give the company a competitive advantage over its competitor’s growth through an international e-commerce market. Some of these opportunities are expansion in developing markets, expansion of brick-and-mortar business operations, and new partnerships with other firms, in developing countries. Amazon can break into developing markets. This move should establish the company’s presence before other large e-commerce companies gain a foothold, giving it a stronger competitive advantage. Regarding the weaknesses considered by Amazon.com Inc. in this SWOT analysis, there is an opportunity to develop the company’s physical business. In addition to the existing Amazon Go stores, this external factor is related to the potential increase in sales brought about by building a stronger influence through more physical stores. In addition, the ability to establish new partnerships with other companies is an external strategic factor that companies can use to expand their influence in the global e-commerce industry. In addition, cooperating with companies with good corporate citizenship can increase the impact of Amazon’s corporate social responsibility strategy and stakeholder management. Companies can use these external factors to increase market coverage and revenue. Therefore, this aspect of the SWOT analysis shows that Amazon can continue to grow despite increasing market saturation.

Amazon faces many threats in aspects of the situation analysis. These threats are viewed as external factors of the situation analysis that help identify problems the company may be opposed to that are outside of the organization. There is fierce competition in most of Amazon’s markets. This is why strategic partnerships take place to take on competition. For example, an illustration of this is the association as of late declared among Walmart and Shopify permitting a half-and-half ‘Snap And-Mortar’ insight. Moreover, the consideration of commercial centers via online media stages, combined with the ascent of ‘powerhouse advertising’ is further affecting the fate of Amazon. Majority of consumer claim that social media influences their decision to buy. Amazon is consistently dealing with third-party sellers using their program to sell fake items. With a huge organization of outsider merchants, it is now and again hard for the insightful purchaser to recognize which vendors are selling real things, and which are not. This is built up by Amazon’s concern with counterfeit surveys on its items. Amazon has created items to alleviate the appropriation of phony items, however the issue endures. Governments have designated Amazon as they ponder strategy changes to block its exercises. Amazon’s size has raised banners with government organizations, with charges of extortion, charge aversion, and antitrust issues. As of late, Amazon and Apple experienced harsh criticism when Amazon hit an arrangement with Apple to eliminate outsider vendors of Apple items from its foundation. Amazon has been blamed for monopolistic inclinations over its outsider merchants, constraining 80% into its Buy-Box appropriation organization (CNBC). Amazon catches outsider information on its clients’ customers to construct items under its mark. The reverse mix is a methodology that has been recognized by Amazon to catch more benefits through its retail stages. By fostering its private-name items, Amazon has more authority over its market. As of late, partners have raised worry over the utilization of outsider information to additional improve its private mark items, at the expense of the proprietors of the outsider dealers – the generators of this information. This is viewed as an absence of sincere trust in its tasks. Amazon expects that its private-mark brands should make up 10% of retail deals (Business Insider). Half of Amazon’s item dispersion is dealt with by rethought providers. A critical upper hand of Amazon is its capacity to meet tight conveyance plans, which is incorporated into its offer. Amazon reevaluates half of its item dispersion which opens itself to outside hazards that can affect its activities. Amazon should take a gander at bringing its full strategic and circulation necessities into its area to relieve these dangers. Some of these threats continue to be constantly threatened like cyberattacks. Even though Amazon keeps an immense information base of its customers’ subtleties, security breaks have been restricted. Its network protection group is known to act quickly and successfully in impeding assaults on its frameworks. Albeit these frameworks are viable, pernicious assaults are turning out to be progressively complex. Amazon Web Services (AWS) upset a 2.3 Tbsp. High Volume Ddos assault on its workers – 44% bigger than anything the organization had recently experienced (Online Protection Insiders).

The swot analysis was one of the strategic tools used to gain a competitive advantage over the competition. By analyzing their internal strengths and weaknesses they can get a sense of the things they are strongest in and find ways to overcome them. Using the swot analysis to observe the company’s external opportunities and threats the company can see the possibilities of improving the company, however, they can also see what potential threats are possibly happening. From starting as an online bookstore to becoming one of the world’s retail organizations ever is truly a miracle. In all by strategically planning Amazon can continue to soar higher than its competitors and continue to expand. This tool helps them gain insight into how the company is running internally compared to how it runs outside. Planning using the swot analysis is very strategic and helps the company identify its goals and gain insight into certain objectives that the company may deal with. For instance, the company can develop through ventures into new online business markets, particularly in high development-creating economies. Notwithstanding, the shortcomings and dangers recognized in this SWOT examination expect Amazon to think about updating a portion of its procedures. In any case, the business stays solid and is one of the greatest innovation firms in the worldwide market. The rise of Amazon has thrown its originator and Executive Chairman, Jeff Bezos, to maybe the most luxurious person on earth. With a proactive, creative mentality and ethos, the possible destiny of Amazon is secure as a head overall retail awe-inspiring phenomenon.

Works Cited

1. Gaille, B. (2021, March 24). Amazon SWOT Analysis Matrix: Opportunities and Weaknesses. BrandonGaille.Com. https:brandongaille. com amazon-swot-analysis
2. Vishwal, S. (2021, March 8). SWOT Analysis of Amazon [Detailed]. Super Heuristics. https:www.superheuristics.comswot-analysis-of-amazon
3. Greenspan, R. (2019, June 22). Amazon.com Inc. SWOT Analysis

Introduction

The infrastructure that a firm puts in place defines the level of security that will be achieved in protecting data. Cyber insecurity is currently one of the main concerns of governmental and non-governmental entities around the world. In the United States, large corporations and government agencies are often attacked by cybercriminals who are keen on obtaining critical information for personal gains (Jagoda, 2016). As such, there is always an effort to ensure that data is protected from these criminals. Amazon is currently one of the largest companies in the world. The online retailer sells its products to the global market through its website.

Data security for this company cannot be compromised because of its business model. All transactions made by customers, from viewing the product, selecting what should be purchased, and making actual payments, are done on the online platform. It means that if a cybercriminal succeeds in penetrating the system, they can steal from the company and its clients with ease. As such, this company is always in a constant upgrade process, keen on ensuring that the security of its data is not compromised. In this paper, the focus is to discuss the relationship between infrastructure and data security as it relates to Amazon.

The Relationship between Infrastructure and Security

Investing in data infrastructure is one of the best ways through which a firm can ensure that its system is safe from any attack by cybercriminals. At Amazon, digital data is the core of business because of the model of operation the management has embraced. As the largest online retailer in the world, this firm cannot afford to have a situation where criminals or ill-willed individuals can have access to its database or information about its clients. As Sha (2016) notes, online retailers have to ensure that as they protect their own data from infiltration, they also have to protect the privacy and financial information of their clients. In this section, the focus will be on analyzing the current logical and topographical layout of the current network and proposing a new layout for this firm, which is more secure and easy to use for both the employees and customers of this company.

The rationale for the Logical and Physical Topographical Layout of the Planned Network

It is important to understand the rationale for the logical and physical topographical layout for the current and planned network. Logical topology, also known as signal topology, refers to “the arrangement of devices on a computer network and how they communicate with one another” (Ayyavaraiah & Gopi, 2017, p. 45). It is primarily concerned with how devices communicate with one another within the system. Physical topology refers to how physical gadgets (computers, tablets, and smartphones) are interconnected using cables, routers, and other devices (Ayyavaraiah & Gopi, 2017). In order to explain the rationale for upgrading the logical and physical layout of the network, it is necessary to look at the current system to help identify the weaknesses that need to be addressed. Figure 1 below shows the physical topographical layout of the current network used by the company.

As shown in the figure above, the physical devices the company uses to facilitate data management include personal computers (which act as workstations), bridges, servers (which is the database), smartphones, switches, a router used to make information available in the internet, scanners, and printers. Once relevant information is made available, customers can use their personal computers, smartphones, and tablets to access the information with the help of a Wi-Fi router. It is evident that the company has invested a lot in ensuring that its employees have can communicate easily with customers and share data amongst themselves to enhance operational activities.

Once a client places an order, the information will be received by the company router from the internet and be made available to the relevant departments. A confirmation will be sent back to the customer informing them that their order is being processed and will be released for delivery once the payment is made. It takes a few seconds to process the information. The physical layout of the network shows that the router is the primary security wall that protects the company’s database. However, it is important to enhance the security system to make it more secure as the firm’s operations continue to expand. Figure 2 below shows the logical topological layout of the planned network. The focus of the new infrastructure is to improve the security of the company’s database and the privacy of its clients, which was identified as the facility’s main limitation.

In the proposed logical topographical layout, there are two entities. On the one end is a customer in a remote location who needs the services of Amazon. On the other end is the company that seeks to offer services needed by the client. The two entities are connected through the internet. The client can use personal computers such as desktop and laptop or handheld devices such as a tablet or a smartphone to access the database of the company. The main difference between the proposed infrastructure and the previous one is that the new layout has two main security points. The first one is on the internet where the firm will need to use a secure VPN Connection. This was not used in the previous case. It is meant to add a layer of security to the current firewall at the network access server (NAS) at the offices of the company. The intrusion detection systems (IDS) should help determine when unauthorized individuals try to access the database of the firm. The proposed layout is benchmarked from best practices of the Central Intelligence Agency (CIA) that uses multiple layers of security to ensure that it protects its database from unauthorized individuals.

Comprehensive Security Policy for this Data-Collection and Analysis Company

When the firm has put in place an appropriate infrastructure to manage data, it is also important to have policies, which would guide the behavior of different parties involved in managing the information. According to Jagoda (2016), the CIA is one of the government entities that handle classified information that defines the country’s security. Its comprehensive policies have enabled it to ensure that information is not leaked to unauthorized individuals. Such policies would help this company in protecting its data. In order to protect the firm’s infrastructure and assets, the management would need to apply principles of confidentiality, integrity, and availability. The following regulations should be embraced:

• Employees of this company should be reminded that they have a moral and legal obligation to protect the confidentiality of the firm’s client. Using clients’ details for reasons other than what is authorized should be a reason enough for job termination and subsequent legal action.
• The firm should ensure that both the physical and logical topographical layout of the network enhances easy access to information for clients and employees.
• The integrity of data should be upheld by ensuring that there is always a backup system just in case cybercriminals succeeds in infiltrating the secured database.

The company should encourage all the relevant stakeholders to embrace ethical behavior as a way of enhancing further security. Customers and employees of the firm should have passwords, which they have to use when accessing information from the system. They should be reminded that such information should not be shared with third parties. Contractors assigned to work in the upgrade process or in any other department where they can access critical databases should sign confidentiality and ethical agreement forms that prohibit them from accessing and using information from the system without express authority from the management.

Conclusion

Amazon is one of the leading retailers in the world. The business model that the company uses, which is purely based on online transaction, requires a high degree of data security at all times. Cybercriminals often try to infiltrate the system to steal from the company or its clients. In this paper, the researcher has proposed an upgrade of the physical and logical topographical layout of the network system to enhance security. The new system will introduce an additional layer of security by ensuring that the firm uses a secure VPN connection. The management will also need to ensure that its employees, contractors, and any other person who has access to confidential information remain ethical at all times.

References

Ayyavaraiah, M., & Gopi, A. (2017). Database management system. Lansing, MI: Horizon Books.

Jagoda, P. (2016). Network aesthetics. London, England: The University of Chicago Press.

Sha, K. (2016). Security, privacy and reliability in computer communications and networks. Copenhagen: Denmark: River Publishers.

Vanderplas, J.T. (2016). Python data science handbook: Essential tools for working with data. Sebastopol, CA: O’Reilly Media.