The Amazon Company’s Success Reasons

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Table of Contents

Introduction
Competitive Analysis of the System
Recommendations
Conclusion
References

Introduction

The world-famous online store Amazon attracts an enormous number of customers due to its reliable reputation, an abundance of products with a wide variety of assortments, as well as numerous promotions and discounts. Amazon was the first to use the Internet’s power: the ability to manage a larger client number compared to a regular offline store, a higher number of items, and retailers. Amazon’s diversification into technologies and institutions which are somehow related or complementary became a strong point. The company is expanding its business; for example, a subsidiary of Amazon Web Services (AWS) develops and produces cloud services, and it also actively researches in the field of artificial intelligence. The success depends on the informational systems elements and continuous progress concerning customers satisfaction.

Competitive Analysis of the System

Positive Impacts

Amazon’s advantages are a large selection, reliability of transactions, transparency of spending, and a high level of trust. Amazon is an example of building customer knowledge and delivering timely, personalized recommendations. The positive impact Amazon has on the users is that the platform provides a vast selection of products and services and the opportunity for each client to evaluate and give feedback on the product. This online store has become an analog of a large shopping center containing multiple shops selling their products. The user can find the desired type of goods in the appropriate section.

Due to increased customer loyalty, the company has developed the Amazon Prime program which was launched in 2005. This has two benefits for buyers; first, the business can charge the lowest commission and set the lowest prices because of its size (Wall, 2019). Second, the company continually attracts customers with new discounts and services (Wall, 2019). Amazon has announced that customers who subscribe to Amazon Prime can receive goods overseas within five days (Wall, 2019). This makes Amazon’s delivery of small, low-cost items from other countries the fastest among its competitors. Reducing delivery times is an important step that is equally beneficial for both manufacturers, who need to sell goods more quickly, and buyers, who wish to receive them as soon as possible.

During the COVID-19 pandemic outbreak, Amazon’s services showed another significant benefit for users. For example, Whole Foods and Amazon Fresh receive large orders as many Americans stay at home due to quarantine measures and restaurant closures (Sheth, 2020). In terms of Amazon Web Services, moving to remote work and office closures prompted a shift from on-premises servers and software to different cloud services (Sheth, 2020). For many sellers and IT professionals who could not meet potential and existing customers in person, the cloud service provides the required capabilities.

Negative Impacts

Amazon is an information monopoly that dominates large platforms that attract users, sellers, advertisers, software, applications, and accessories manufacturers to their ecosystem. Consequently, it leads to overdependence, as in the case of an outage, the online store becomes unavailable to users, and there is no opportunity for customers to make a purchase. Besides, fraudsters can take advantage of a system failure; therefore, hacking can lose valuable data and compromise the store (Singh, 2021). With an exceeding influx of users, the external framework, including the website and the application, customer relationship management and warehouse management system, the call center, and other vital parts of Amazon’s infrastructure, might fail (Wall, 2019). The outage error message seen by many customers opening the site page can significantly reduce Amazon purchases. Clients are advised to stop any transactions as traffic is temporarily suspended. All this provokes an unpleasant user experience, which can negatively affect the attitude towards the brand and subsequent possible purchases. Users can redirect to other online stores or wait until the system is restored.

Server-Side Hardware Requirements

The Amazon information system is based on Linux Ubuntu connected to the Amazon Elastic Compute Cloud (EC2). Since 2005, Amazon has had the world’s three largest Linux databases; they stored 7.8 TB, 18.5 TB, and 24.7 TB data (Wall, 2019). The central repository consists of 28 HP servers running Oracle 9 (Wall, 2019). The largest part of the space is occupied by the section with the click history, which is up to 50% of the storage space (Wall, 2019). The online store’s work depends on proper functioning, which impacts the entire process of operations.

Server-Side Software Requirements

Online store software is a complex and multi-step process; its performance, the convenience of management, and promotion in search engines depend on how correctly it will be performed. The company’s website processes 3-4 million deliveries every day, so its servers store data on 400 million goods (Wall, 2019). Meanwhile, Amazon has never revealed the number of servers and the operating system EC2 runs on, but most experts believe that the company still uses its version of RedHat Linux (RHEL) (Wall, 2019). Virtual machines operate through the Xen cross-platform hypervisor – on Linux, Solaris, Windows 2003 and 2008, FreeBSD, and NetBSD (Wall, 2019). Amazon offers one of the best computer scaling mechanisms, and its data center efficiency is high.

Client-Side Hardware Requirements

Concerning the client-side hardware requirements, they are available for all users with Internet access. Various devices, including desktops, laptops, smartphones, or pads, are used in case they have the latest installed version of some commonly used web browsers. However, it is suggested to use an Intel Core Duo Processor or equal access streaming services for Amazon media content (Wall, 2019). Consequently, the Amazon website can be entered using any gadget with a stable network.

Client-Side Software Requirements

Amazon supports almost any browser; a user can visit the online store pages regardless of the operator. Various programs perform information processing and subsequent sending of requests to servers. Based on the received data, the server provides the customer with the necessary information on online pages. Amazon suggests using browsers with HTML5 support, such as the latest versions of Google Chrome, Opera, and Mozilla Firefox (Wall, 2019). The browser security level is crucial as continually improving protection minimizes the risk of compromising a computer system (Wall, 2019). For controlling this parameter, it is necessary to update the program regularly. The logical and intuitive interface will allow the user to quickly understand the intricacies of managing the browser and get a set of tools for working with the Amazon website.

Recommendations

The first recommendation is that Amazon should require sellers to provide information on where products are being shipped from. As a result, the customer can make a conscious purchase choice. The online store is obliged to offer services to deliver goods by shipping, indicating the shipment method and mode of transport and explaining the delivery conditions (Wall, 2019). Simultaneously, until the goods are carried to the buyer, Amazon takes the risks of loss and responsibility for violating the terms. The website should include information about the seller, for example, the full brand name and address of the manufacturer. Besides, the user wants to receive complete details about the delivery cost. A module that automatically calculates transportation payments should significantly save the customer’s time. In this case, the probability of orders will increase substantially as long as delivery costs are the primary factor.

The second recommendation is to implement some regulation that allows users to know whether an item is authentic or not. There is always a high likelihood that goods purchased and delivered to the buyer differ from those initially shown on the fly page. The seller is obliged to indicate the product’s main properties, such as its location address, place of manufacture, and the company’s full corporate name. In addition, one of the solutions can be a video presentation of the product.

The effectiveness of visual content needs to be checked by testing since not all users are ready to watch the video. According to Wall (2019), such an element of a fly page significantly affects the product’s perception and helps customers imagine it from the real perspective. Users must-see video content on the product card. If the video were hosted far from the image gallery, consumers would have difficulty finding it. Clients are more likely to expect all visual content, including images, videos, and 360° views on the main page. Videos and 360° reviews should be placed at the top of the card, next to the product image. Additionally, a retailer can put visual content in a block with characteristics or product descriptions.

Lastly, the implementation of a loyalty points program should also be reconsidered. As many people utilize Amazon’s service, knowing the target audience is extremely important when planning the loyalty program concept. Segmentation of the client base is required to select target segments. The share of the introduction of a loyalty program is necessary to form a portrait of the program member, taking into account the socio-demographic profile, consumption structure, needs, and preferences. The strategy should be beneficial due to developing several elements. These include determining business goals and planning a value proposition. There is a fast track option for Amazon Prime customers for additional account status such as Amazon Student or Mom (Wall, 2019). The advantage of these statuses is that customers have the opportunity to receive discounts from 5% to 20% on specific product categories (Wall, 2019). Amazon Student or Mom discounts apply to everyday household products (Wall, 2019). Since the client base is vast and grows every year, this program can be expanded to all population parts.

Conclusion

These days, Amazon is one of the largest online stores globally and one of the sales leaders in this business. Despite the seeming simplicity of the company’s development, the main factors of efficiency remain adequate functioning of its information system. Amazon is a multifaceted and extensive company that includes more operations than purchasing and delivering goods. The corporation is continually growing, expanding various businesses and services. Amazon prioritizes customers’ liability, and innovation by investing in technological inventions. The success can be examined in terms of the Amazon Prime program, grocery shipping, and devices; AWS gives investors a lot of reason to believe Amazon has the potential to grow in revenue and profits. The proper usage and functioning of the information system are crucial components in terms of the company’s success, profit gain, and customer satisfaction.

References

Sheth, J. (2020). Impact of Covid-19 on consumer behavior: Will the old habits return or die?Journal of Business Research, 117, 280-283. Web.

Singh, H. (2021). Security in Amazon Web Services. In Practical Machine Learning with AWS (pp. 45-62). Apress.

Wall, B. (2019). Amazon: Managing extraordinary success in 5-d value. Morgan James Publishing.

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