Information Systems for Amazon Australia

This report analyzes the overall business of Amazon Australia, including its organizational form, value chain, and competitive strategy. It also explores the existing human activity system and proposes a new information system to enhance customer experience.

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Information Systems for Amazon Australia
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Executive Summary
Amazon.com is an e-commerce company selling a wide range of the products online. The
company was established in 1994 by Jeff Bezos. Amazon has a different retail website for all
the countries where it operates. It also sells services like and cloud computing, AWS.
The company has an integrated information system which is used to align activities related to
the operations of the business. The information system is also integrated with the supply
chain of the Amazon which assists in controlling the value chain. This report describes the
views and issues of the stakeholders along with the recommendation of a new information
system. The new information system helps to enhance the experience of the customers.
Additionally, the various concepts of the Human Activity System have been explained which
are adopted by the Amazon Australia.

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Contents
Executive Summary...............................................................................................................................1
1. Introduction.......................................................................................................................................2
2. Analysis of the overall business of Amazon Australia.......................................................................3
2.1 Information..................................................................................................................................3
2.2 Organizational form by using Mintzberg’s classification............................................................4
2.3 Value chain..................................................................................................................................4
2.4 Competitive strategy....................................................................................................................6
3. Aspects of an existing human activity system...................................................................................7
3.1 Identification of an existing human activity system.....................................................................7
3.2 Rich picture representing issues and concerns of the stakeholders..............................................8
3.3 Process model using BPMn notation...........................................................................................8
3.4 Unsuccessful and existing human activity system.......................................................................9
3.5 Measures of success for the existing human activity system......................................................11
4. New information system..................................................................................................................11
4.1 Identification of new information system..................................................................................11
4.2 The data and information used by the new system.....................................................................11
4.3 Process model using BPMn notation.........................................................................................12
4.4 Classification of the new information system............................................................................12
4.5 Dimensions of the impact of a proposed information system....................................................12
4.6 Measures of success...................................................................................................................13
5. Recommendations...........................................................................................................................13
5.1 Outcome of parts.......................................................................................................................13
5.2 Formulate recommendations......................................................................................................13
6. Conclusion.......................................................................................................................................13
7. References and Citations.................................................................................................................14
1. Introduction
Amazon is a U.S based online retailer established in 1994. It has expanded immensely over
the years and sells everything from washing powder to books. The Australians have been able
to shop on Amazon.com, but in 2017 the company has expanded it’s presence. The company

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has officially opened it’s center in Melbourne. Amazon is able to achieve it’s strategic goal of
diversification and expansion by growing continuously.
The Human Activity System (HAS) helps Amazon in gaining vision and mission
successfully. The HAS is a system which is just theoretical and expresses some useful human
activities. It is a conceptual model of the human activity and does not integrate with the real
world activity. The people in the HAS are affected because of being in the system. The
system is also affected because of their participation in the system. The HAS has a role in
serving the purpose of members and communal entity. The system serves it’s environment in
which it is entrenched.
The information system of Amazon has a significant role in the operations of the business.
The information system is helpful in providing better services to the consumers. The
implementation of HAS in the information system of the Amazon can result in gaining a
competitive advantage. It helps to attract more customers. This report includes the overall
analysis of the business of Amazon Australia. The analysis is made possible with the help of
value chain, competitive strategy, and the information system. A new information system is
suggested to add value to the Amazon Australia.
2. Analysis of the overall business of Amazon Australia
2.1 Information
Australia is a fastest growing marketplace which represents the fastest growth of the Amazon
in Australia. Amazon had an Australian site before it’s recent launch. The company was
already popular in Australia before it’s launch. As Australians have been buying from the U.S
site for many years. But the launch of amazon.com.au brings a lot to the Australian
customers. Amazon offers products at a lower price with free shipping along with the quick
delivery.
Amazon provides twenty-three categories of products at Australia. The product category
includes a computer, books, accessories, beauty products, baby care products, home, and
kitchen appliances. Amazon has announced it’s entry into the Australian retail market and
valued at USD 300 billion. The company also intended to launch ‘Amazon marketplace’ for
the third-party retailers in the country. The Prime subscription service has been launched in
Australia. Amazon focuses on the customer’s experience. It is the job of the company to

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make every aspect of the customers experience a little better. Amazon strives to be better
which is used as a market strategy of the company (De Guinea, Titah & Léger, 2014). In this
aspect, the company focuses on the quality and price of the products. It conducts research and
development activities for the product quality and also makes use of innovative technologies.
2.2 Organizational form by using Mintzberg’s classification
There are five basic organizational forms as per the Mintzberg’s classification such as
machine organization, entrepreneurial organization, innovative organization, divisional
organization and professional organization. Amazon makes use of the divisional structure as
it’s organizational form. It integrates the internal and external elements and redesigns for the
scope of further improvement. Amazon divides it’s business and products into the divisions
to promote management of each division. The divisions are regulated by the centralized
control. It defines more control over the operations and the business units, unlike other
structures. In the case of Amazon, it’s headquarter is located in Washington and it’s branches
are spread worldwide.
2.3 Value chain
The value chain analysis assists in identifying business activities which can create value and
competitive advantage for the business. It is also helpful to Amazon in evaluating it’s primary
and secondary activities which creates value for the products. It is also the best way to reduce
cost and increase profitability. The value chain analysis of the company can be defined by
using Porter’s value chain model:

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Primary activities
Inbound logistics: Amazon does not have any long-term contracts with the vendors; it takes
full responsibility for logistics, customer services, and the product returns. The company uses
logistics services to serve a company’s marketplace.
Operations: The operations are divided into the three categories, Australia, international and
Amazon Web Services (AWS). The company has successfully opened a fulfillment center in
Melbourne. The AWS deals with the global sales of cloud computing, online servers,
database and additional services for the start-ups.
Outbound logistics: The company has started it’s own air delivery business. This effort is
made by the Amazon in order to gain independency in logistics from the third parties. The
Amazon Prime air and Amazon Flex has been also announced by the company. the company
aims to attract more customers by differentiating it’s products and services.
Marketing and sales: The marketing expenses of the Amazon include advertising and other
promotional costs. These expenses help the company to serve customers in an efficient way.
The Amazon marketing services are used by the vendors in the country which helps them to
boost sales through performance-based advertising (Coelho & Laporte, 2014).

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Service: The company focuses on making the customer’s experience better which helps the
company in value creation. There are two variations by the company, Amazon marketplace,
and Prime. The company also offers coaching programs to the sellers which are helpful in
getting opportunities for the selling selections and the competitive pricing.
Support activities
Firm’s infrastructure: The infrastructure is one of the support activities of the Amazon which
has led to the web-scale business. It includes the customer data which comprises all the
information an records of the customers, vendors and the suppliers.
Human resource: Amazon Australia has provided training to the employees and hired
experienced employees of it’s existing chain in other countries (Whittington, 2014). The
company also hires people on a temporary basis than full-time employees so that segments
can be better targeted and costs of production can be reduced.
Technology advancement: Amazon Australia uses innovated technologies to differentiate
itself and serve customers in a better way. In this concern, the company invests in R and D
activities in order to gain a competitive advantage. The personalized recommendation is one
of the improved aspects of the company in the case of the technology (Disney, Maltz, Wang
& Warburton, 2016).
Procurement: The procurement professionals add value to the supply chain of the company
through the constant improvement. The company has restocked it’s distribution centers from
various suppliers. The suppliers acquire non inventory goods for the fulfillment centers.
2.4 Competitive strategy
The competitive strategy of Amazon can be understood by Porter’s competitive forces model.
Bargaining power of suppliers: The bargaining power of the suppliers at Amazon is low to
medium. Amazon has dominance when it comes to the supply chain. The number of the
suppliers is huge and they do business as per the rules defined by the company. The company
can easily switch between the suppliers.
Bargaining power of buyers: The bargaining power of buyers is medium to high. The
company focuses on the customer’s centric approach by maintaining the quality of the
products. The number of the competitors of the company is skyrocketing and the switching
costs for the customers is low (Urquhart & Fernandez, 2016).

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The threat of the substitute products: The threat of the substitute products is high in the case
of Amazon. It is because a number of brands have entered into the online retail. The
advantage which differentiates company is it’s excellent customer service. The customers can
effortlessly switch to other brands.
The threat of new entrants: The threat of the new entrants is low for the Amazon. The
explosion of the digital technology has introduced several changes in the retail industry.
There are various new brands which have entered into the e-retail. There are various
companies which are giving major competition to the Amazon such as Alibaba, Flipkart, e-
bay and more.
Rivalry: The level of rivalry is high in the Australian retail industry. The company faces
immense competition from the competitors like Coles and Woolworths. The rivalries are also
struggling for the market share and causing competitive pressure.
3. Aspects of an existing human activity system
3.1 Identification of an existing human activity system
The major problem faced by the Amazon is the insufficiency of the stock. The inaccurate
stock level can destroy the image of the company. For instance, when the consumers made a
purchase online, they check for the approximate time of the delivery. The company checks
the stock levels and make use of a delivery calculator in order to analyze the time required for
the delivery (Trung & Lee, 2016). If the stock level is not appropriately maintained by the
company then it’s trust can be destroyed. In this case, Amazon is required to maintain an
accurate level of stock. The company should not reflect the stock which is currently not
available.
The consumers and the retailers who sell products are the primary stakeholders in the
business to consumer electronic commerce. The secondary stakeholders are the executives
who manage the whole process of procuring products for the delivery. It has been observed
that consumers face the situation of the insufficient stock (Cippitelli, Gasparrini, Gambi &
Spinsante, 2016). The retailers are also not able to update stocks on time.

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Other stakeholders identified are the persons who are involved in the branding promotions of
the Amazon in it’s marketing department. The sales department is responsible for managing
sales which is offered to the customers. The IT personnel has an important role in
incorporating the e-commerce system with the ERP systems. It is linked to the inventory
management, execution, and management of the Amazon (Sölvell, 2015). The operation team
has involvement in ensuring that e-commerce facilitates efficiency for the business.
The departments in the company face the issue of poor feedbacks also the ineffective
management results in the deteriorating goodwill of the Amazon. The issue is also faced
regarding the distraction of the interest of the consumers towards other companies (E. Dobbs,
2014).
3.2 Rich picture representing issues and concerns of the stakeholders

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3.3 Process model using BPMn notation
3.4 Unsuccessful and existing human activity system
The information success model which is DeLone- McLean Model was developed by William
H. DeLone and Ephraim R. McLean in 1992. It is an information system (IS) which offers a
complete understanding of the information systems by recognition and explaining the

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relationship among the 6 most significant magnitudes of the success along with the
evaluation of the information systems (Popovič, Hackney, Coelho & Jaklič, 2014). The IS
model can be combined with the issue in HAS to assess the problem of the insufficient
inventory in Amazon. It can be explained by the following aspects:
 The information quality states to the pre-eminence of the information, upon which the
structure is stored, produced and supplied. It has an impact on the satisfaction of the
consumers and the purpose of the users to utilize the mechanism. The problem of
inaccurate inventory is faced due to the incapability of the system to gather and
deliver accurate information concerning the availability of the stock. It affects the
customers as they are not capable of getting desired products. The system is also
insufficient to generate benefits for the company (Engeström, 2018).
 The usage intentions refer to influencing the use through information, quality of
service and systems. The usage is of a system is placed to impact the satisfaction of
users which as a result impacts to the usage intentions. The usage also affects the net
benefits.
The problem of the inaccurate inventory is linked to the usage of the systems in the
proper way. The systems are not updated regarding requirements of the inventory
(Herbon, Levner & Cheng, 2014). Hence, it affects the satisfaction of users and the
benefits which the system is capable of providing.
 The system quality is evaluated and it influences the degree to which the mechanism
is capable of generating benefits through the conciliation relationships. The system is
analyzed with allusion to user satisfaction and usage intentions (Feng, Li, McVay &
Skaife, 2014). The issues of inaccurate inventory put an impact on the satisfaction of
consumers. It also represents that the quality of the system unsatisfactory.
 The information systems are assessed on the basis of the dominance of service
capable of distributing. The IS at Amazon was not able to deliver the best quality
services to the consumers.
 The net system benefits provide the ability to deliver by making use of IS. It describes
the overall value to the users and the organizations. The net system benefit is affected
by the use of systems.
 The user satisfaction directly impacts the net benefits available by the IS. The
stakeholders are not pleased with the system as it is not generating the net benefits to
them (Parra-Arnau, Rebollo-Monedero & Forné, 2014).

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3.5 Measures of success for the existing human activity system
The process of managerial decision making is dependent upon the accuracy of the IS to
gather and process data as per the IS. The efficiency signifies the method by which inputs are
being used in the system. In the case of inaccurate inventory, the IS adopted by the company
should accurately process data in order to convey the message of mismanagement inventory
system. The IS should be managed at the time so that consumers can enjoy the best
experience during shop at Amazon. The system is evaluated by it’s efficiency to know the
desired output. The system is required to produce accurate results as preferred by the
consumers (Jouini, Rabai & Aissa, 2014).
4. New information system
4.1 Identification of new information system
The new information system will assist Amazon to track inventory and effectively fulfill
orders and restructure the management of the consumer's segment. The information system
will have a master file for the management of the stock (Hashem, et. al. 2015). It will act as a
central source for managing the inventory data. It will affect both primary and support
activities of Amazon as it comprises the sales department. This department offers updated
data of the consumers and the order history. The other stakeholders and staff will be able to
synchronize to the ERP system of the company (Mason, 2017).
The marketing department of the Amazon will also have the option to get connected to the
retailers and it will assist them in communicating directly to the retail consumers. The IT
team should execute a manageable sales order system to enhance sales and for driving the
business forward (Galliers & Leidner, 2014).
4.2 The data and information used by the new system
The information system includes the sufficient data and the information in order to track the
levels of inventory, sales, orders, and deliveries. The software exhibits the information related
to product identification, service management, reordering point, and stock tracking. The
inventory management software generates knowledge related to tracking and identification of
products and report of restocking (Chatterjee, Sarker & Valacich, 2015). It can incorporate
inventory management to the site of Amazon through the centralized accessing of the
inventory.

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4.3 Process model using BPMn notation
4.4 Classification of the new information system
The components of the new information system can be classified as:
The call center and consumer service can be categorized into the front end which includes
functions such as payment card industry compliance. It helps the industry in enhancing their
customer base by resolving queries of the customers (Giri, Maitra, Amin & Srivastava, 2015).
The back end application manages order and makes sure that all the orders are fulfilled on
time. On the other hand, real-time inventory management plays a significant role in making
customers happy. Such customers can be helpful to the company in staying loyal to it.
4.5 Dimensions of the impact of a proposed information system
It is vital for the Amazon to have an adequate stock of core products. It can be made possible
by installing a new inventory management system. It will help in managing inventory as per
just in time inventory management. It is helpful to the stockholders in managing supply and
demand of the stock so that consumers can have a memorable experience. The installation of
the new inventory management system will have effects on the overall business functions
such as finance, marketing, operations and accounting (Liu, 2015).

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4.6 Measures of success
There are various measures for the evaluation of the aspects like efficiency and efficacy of
the new information system. To estimate the task completion time, the invested time should
be evaluated in completing a task (Homburg, Jozić & Kuehnl, 2017). Another concern is the
satisfaction of the staff. The capability of the staff in completing a task is the landmark of the
inventory management program. The satisfaction of the vendors is also a concern which
should be consistently observed.
5. Recommendations
5.1 Outcome of parts
The recommendations are given concerning the better management of the demand and supply
of stock with the scheduled listings, product catalog building and consumer feedback
management (Lowry, D’Arcy, Hammer & Moody, 2016). There should be a digital
marketing channel to get the products posted over the internet.
5.2 Formulate recommendations
The IS is useful in providing enhanced services to the consumers. It avoids the mistakes like
overselling single product to two consumers. It occurs when the levels of the inventory are
not updated constantly. It results in updating stocks in the real-time (Hanseth & Lyytinen,
2016).
6. Conclusion
From the above report, it can be concluded that it is not an easy task to lead as an e-
commerce company. The company is required to improve it’s every aspect in order to gain a
competitive advantage. The implementation of the new information system ensures that
Amazon will have a cost advantage in it’s various stages and the experience of the customers
also going to be better. In order to maintain the adequate inventory, the company is required
to effectively integrate IS with the supply chain. It will help management as well as getting
real-time information.

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7. References and Citations
Chatterjee, S., Sarker, S., & Valacich, J. S. (2015). The behavioral roots of information
systems security: Exploring key factors related to unethical IT use. Journal of
Management Information Systems, 31(4), 49-87.
Cippitelli, E., Gasparrini, S., Gambi, E., & Spinsante, S. (2016). A human activity
recognition system using skeleton data from RGBD sensors. Computational
intelligence and neuroscience, 2016, 21.
Coelho, L. C., & Laporte, G. (2014). Optimal joint replenishment, delivery and inventory
management policies for perishable products. Computers & Operations Research, 47,
42-52.
De Guinea, A. O., Titah, R., & Léger, P. M. (2014). Explicit and implicit antecedents of
users' behavioral beliefs in information systems: A neuropsychological
investigation. Journal of Management Information Systems, 30(4), 179-210.
Disney, S. M., Maltz, A., Wang, X., & Warburton, R. D. (2016). Inventory management for
stochastic lead times with order crossovers. European Journal of Operational
Research, 248(2), 473-486.
E. Dobbs, M. (2014). Guidelines for applying Porter's five forces framework: a set of
industry analysis templates. Competitiveness Review, 24(1), 32-45.
Engeström, Y. (2018). Expansive learning: Towards an activity-theoretical
reconceptualization. In Contemporary theories of learning (pp. 46-65). Routledge.
Feng, M., Li, C., McVay, S. E., & Skaife, H. (2014). Does ineffective internal control over
financial reporting affect a firm's operations? Evidence from firms' inventory
management. The Accounting Review, 90(2), 529-557.
Galliers, R. D., & Leidner, D. E. (2014). Strategic information management: challenges and
strategies in managing information systems. Routledge.
Giri, D., Maitra, T., Amin, R., & Srivastava, P. D. (2015). An efficient and robust rsa-based
remote user authentication for telecare medical information systems. Journal of
medical systems, 39(1), 145.

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Hanseth, O., & Lyytinen, K. (2016). Design theory for dynamic complexity in information
infrastructures: the case of building internet. In Enacting Research Methods in
Information Systems (pp. 104-142). Palgrave Macmillan, Cham.
Hashem, I. A. T., Yaqoob, I., Anuar, N. B., Mokhtar, S., Gani, A., & Khan, S. U. (2015). The
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Herbon, A., Levner, E., & Cheng, T. C. E. (2014). Perishable inventory management with
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devices. International Journal of Production Economics, 147, 605-613.
Homburg, C., Jozić, D., & Kuehnl, C. (2017). Customer experience management: toward
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Jouini, M., Rabai, L. B. A., & Aissa, A. B. (2014). Classification of security threats in
information systems. Procedia Computer Science, 32, 489-496.
Liu, S. (2015). Effects of control on the performance of information systems projects: the
moderating role of complexity risk. Journal of Operations Management, 36, 46-62.
Lowry, P. B., D’Arcy, J., Hammer, B., & Moody, G. D. (2016). “Cargo Cult” science in
traditional organization and information systems survey research: A case for using
nontraditional methods of data collection, including Mechanical Turk and online
panels. The Journal of Strategic Information Systems, 25(3), 232-240.
Mason, R. O. (2017). Four ethical issues of the information age. In Computer Ethics (pp. 41-
48). Routledge.
Parra-Arnau, J., Rebollo-Monedero, D., & Forné, J. (2014). Measuring the privacy of user
profiles in personalized information systems. Future Generation Computer
Systems, 33, 53-63.
Popovič, A., Hackney, R., Coelho, P. S., & Jaklič, J. (2014). How information-sharing values
influence the use of information systems: An investigation in the business intelligence
systems context. The Journal of Strategic Information Systems, 23(4), 270-283.

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Sölvell, Ö. (2015). The Competitive Advantage of Nations 25 years–opening up new
perspectives on competitiveness. Competitiveness Review, 25(5), 471-481.
Trung, T. Q., & Lee, N. E. (2016). Flexible and Stretchable Physical Sensor Integrated
Platforms for Wearable Human‐Activity Monitoringand Personal
Healthcare. Advanced materials, 28(22), 4338-4372.
Urquhart, C., & Fernandez, W. (2016). Using grounded theory method in information
systems: the researcher as blank slate and other myths. In Enacting Research Methods
in Information Systems: Volume 1 (pp. 129-156). Palgrave Macmillan, Cham.
Whittington, R. (2014). Information systems strategy and strategy-as-practice: a joint
agenda. The Journal of Strategic Information Systems, 23(1), 87-91.