Amazon: An Overview of the E-commerce Giant

This report provides an overview of Amazon's organizational structure, business model, website, and recommendations for future growth. It also discusses the company's unique culture of experimentation and innovation.

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Bachelors of information technology

Amazon
Executive Summary
E-commerce sites have attained a special status in the market owing to the benefit it provides.
There has been glaring examples of e-commerce sites that has attained a paramount success.
The presence of website is not a luxury rather it is associated with the necessity. The present
report is based on the operation of e-commerce site and going by the operations and
popularity of Amazon, the same has been taken into consideration. The report initiates with
the introduction followed by the organizational overview of Amazon. The report further
stresses upon the business model and put emphasis on various other points such as hardware
and software. Lastly, it comes to the forefront that Amazon has innovated and established
effective solutions that enable several businesses including the websites throughout the world
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Contents
Introduction...........................................................................................................................................3
Organization overview...........................................................................................................................4
Business model......................................................................................................................................4
Website.................................................................................................................................................5
Discussion/recommendation.................................................................................................................8
References.............................................................................................................................................9
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Introduction
Amazon is an ecommerce company of America that has become a significant symbol of
online business. The company was founded in 1995 by Jeff Bezos when he started selling
books online and until now, it has become the leading online e-commerce site for its books
and other items as well. With the assistance of Amazon.com, customers can discover new
items they wish to purchase at affordable and reasonable prices. Further, the strategy used by
Jeff allowed him to become a powerful leader in online business. The primary strategy
utilized was to orient the e-commerce business towards consumers and to be innovative with
regular improvement in online-shopping strategies (Brandt, 2011). Initially, Amazon used to
be just sale of books but with the use of effective strategies and innovative measures, the site
expanded its boundary with the introduction of other items like DVD’s, apparels, furniture’s,
electronics, etc. Besides, a huge selection of books and other products provided by the site
makes the company distinct from its competitors. This is the reason why such ecommerce site
has become the biggest and topmost online business store that is scattered throughout the
world.
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Organization overview
Amazon has a unique structure that focuses on innovation and fresh ideas so that a huge base
of customers can be created. Further, the culture of Amazon is based totally from
experimentation. This is the reason Bezos knows to experiment, failures must be effectively
accepted. Nevertheless, at Amazon, experimentation has always been occurring throughout
and ideas are regularly being presented to Jeff, and for such purpose, a small executive
committee has been established to decide which projects must be pursued (Brandt, 2011).
The entire team working in the company is entirely independent of each other that is a
positive indicator. The reason is because Jeff believes such independence can assist the teams
to utilize whatever resources or technology they require to make the projects successful and
do not have to depend on other team’s technology to assist them (Brad, 2013). The
convenience of Amazon.com and the introduction of hot new products that the site has been
providing has skyrocketed it to the topmost list of most innovative and successful ecommerce
businesses (Barnat, 2014). The ecommerce site operates through three segments namely
International, North America, and Amazon Web Services. Further, the products include
content and merchandise that it buys for resale from sellers and third-party sellers. Amazon
also sells and manufactures electronic devices and through its subsidiary (Whole Foods
Market Inc.) provides organic, healthy, and staples throughout the stores. The North America
Segment comprises of retail sales of products and subscriptions from websites like
www.amazon.com, www.amazon,com.mx, etc. There are many other websites that fall under
the international segments so that people all around can get involved with the website. Apart
from this, services like offering of publishing, databases, digital content, etc has also been
done. The websites are designed in a way that enables sale of hundred million products. For
such purpose, mobile websites and applications have also been designed to enhance the
convenience (Cohn et. al, 2005). Further, electronic device like Kindle e-readers, Amazon
Echo, Fire Tablets, etc are also designed to attract many consumers. In addition, amazon
prime facility (annual membership) is also present to provide accessibility for infinite
streaming of hundreds of television series and movies (Brad, 2013).
Business model
Ecommerce business models comprises of components like market opportunity, value
proposition, competitive environment, revenue model, market strategy, competitive
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advantage, management team, and organizational development. In order to attract customers,
Amazon has been doing a lot and for such purpose, it has enlisted pop-store and mom-store
owners as partners within its delivery platforms (Rothwell & Kazanas, 2004). Besides, in
remote areas wherein few people have internet access, residents can go to the domestic stores
and utilize owner’s internet facilities to go through all online goods (Shayndi, 2011).
Thereafter, such store owners record the orders, alert the customers, collect the payment, and
pass the same to the ecommerce site.
The site has been targeting the upper and middle-class people who have experience in
technologies but do not possess ample time to go shopping from physical stores. Considering
this, the company has effectively positioned itself as a Go Global Act Local wherein one can
purchase anything and get it delivered to distant locations (Alter, 2013). Furthermore, the site
has procured several ecommerce start-ups like audible.com, junglee.com, woot, imdb.com,
etc for offering high and effective value for the consumers through utilization of present
technology of the procured partners at lesser cost (Shayndi, 2011). In relation to revenue
model, the company focuses on transaction fees, advertising, sales, subscription charges, etc
that allows it to generate maximized return on profits and investments. Furthermore, when it
comes to market opportunities, the site always aligns with the trends and thereafter, offers
various products and services to the consumers (Alter, 2013). Its strategy includes low prices,
discounts, and a broad range of items sold online or through marketplace. In relation to
United States, the site sells and holds its own stock of books, toys, and more together with
selling of goods from the third-party sellers (Block, 2011).
Lastly, the site also strikes a balance betwixt all the required skills and functions to perform
every job. Besides, management team consists of employees at the highest level who
ascertains expansion and growth, and the site has the same business model accounting for
these key components (Deckers, 2010).
Website
The website of amazon (amazon.com) started as an online bookstore but thereafter, expanded
to sell video streaming, mp3 downloads, software, audiobooks, apparel, videogames,
electronics, jewellery, etc. The company has separate retail sites for different countries and it
also permits international shipping of few of its items to other countries. The company has
also invested huge resources for server capacity for the websites specially to handle the
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additional traffic during festive occasions (Wells et. al, 2015). Besides, the outcomes
generated by the search engine are partly ascertained by promotional fees.
Website Content- The site accommodates a search inside the box tool that allows customers
to search for the keywords to find their desired item. The site contains details of the seller
selling the item with their attained reviews for the products already purchased by consumers.
Besides, there are options to filter the products as per the requirements like customer reviews,
brand, price, etc so that the customers do not face complications while finding their desired
items. The required details of every product are also present in the website so that if a
customer is not aware of any item, they become so (Levine & Prietula, 2013). Moreover, the
return policies and replacement policies are also prevalent that allows customers to return or
replace any item based on their needs.
Hardware infrastructure- Unlike other ecommerce sites, Amazon establishes its hardware
infrastructure from commodity parts. Moreover, commodity implies usage of equipment from
lesser known manufacturers who do not charge more than their brand name competitors.
Besides, for parts wherein commodity provision is not available, the site attains rock-bottom
prices (Cokins, 2013). The offering of AWS hardware makes the site’s approach clearer by
depicting that brand-name providers of hardware believe that one advantage of paying high
prices is that consumers can attain high-quality gear.
Software- The ecommerce site has its software named amazon that is available and accessible
in all kinds of devices ranging from smartphones to personal computers to laptop to Mac.
Such applications only require registration or signing up of a user and thereafter, they get
registered with the site to purchase a wide array of items at lesser prices. Besides, the site has
hired the best minds in professionalism and technology to build, innovate, and advertise
amazon softwares so that users are guaranteed maximum effectiveness in choosing their
products. Moreover, downloading of such software is also free of charge for every individual
and one can easily sign up only with the requirement of an internet connection. Nevertheless,
if there are bugs or issues in the present software, the site also ensures release of regular
updates for the same so that all issues or complications associated to the software gets
terminated.
Security issues- At amazon, the team takes privacy and security issues very seriously and
customers who have signed up or logged on the website or software can attain the following
benefits. Firstly, customers can contact customer service when there are suspicious,
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unknown, or fraudulent buying of goods, orders, or transactions from credit cards (Barney &
Ray, 2015). Further, customers can do the same in case of suspicious change in passwords,
potential fraud, etc. Secondly, customers can report security issues by clicking on a separate
link that diverts the website in another section wherein AWS (amazon web services) security
issues are discussed. Lastly, the customers can also report copyright infringement by clicking
on a link provided to report a security issue. Therefore, customers can easily control
enhanced access to their data and with the usage of cryptographic techniques, the site can
authenticate anyone intending to access the same (Wells et. al, 2015). Overall, the
ecommerce site always intends to spend a good time trying to fix and trace all the known
security issues so that the vulnerabilities are effectively terminated.
Payments/transaction process- Amazon pay has become an online payment service provided
by the site itself wherein customers can add money from their debit cards, credit cards, etc
into such wallet and use the same for paying for the items purchased by them (Wells et. al,
2015). Furthermore, Checkout mode is another payment method issued by the site wherein
users can just add their products into the cart and thereafter, checkout from the page to select
different modes of payment available to them. If the account of users is effectively
authenticated, they can also view their payment details and address in the page and thereafter,
can use which payment mode and address to use. Besides, they also have the option of adding
a fresh address or card to their account and thereafter, authorize their account to complete the
process. When the address and mode of payment has been selected, it means that customers
have effectively ordered their products and the same will be delivered to them by the site
(Houston & Brigham, 2009).
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Discussion/recommendation
Since amazon has been known for its knowledgeable products, it has functioned on
complicated business challenges to innovate and establish effective solutions that enable
several businesses including the websites throughout the world. The ecommerce site has been
using an effective business model to widen its base of consumers and generate maximum
revenue. The model has even provided thee business a strong impetus in enhancing its reach
and availability. Overall, the site has required strengths to function its ecommerce domain but
if it can enhance its presence in developing markets, there is no looking back then.
Furthermore, there has been strict competition from sites like Walmart and Alibaba, and
therefore, if the site makes way for enhancing its popularity of brand and market reach, it can
outperform any rival. Furthermore, the site has been receiving many negative reviews in
relation to cybercrime because this threatens every online ecommerce company. However, if
amazon adopts stringent strategies to tackle these issues, it can attain heights with maximum
efficiency and income. It is well placed in the market and the only method to attain the best
outcome is to stress upon various mechanism that will assist in driving the business to a
commendable height.
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References
Alter, S. (2013) Work System Theory: Overview of Core Concepts, Extensions, and
Challenges for the Future. Journal of the Association for Information Systems. [online].
14(1), pp. 72-121. Retrieved from: https://repository.usfca.edu/cgi/viewcontent.cgi?
referer=https://www.google.co.in/&httpsredir=1&article=1034&context=at
Barnat, R. (2014) Strategic Management formulation and implementation. Available from:
http://www.strategic-control.24xls.com/en205 [Accessed 2 August 2018]
Barney, J. and Ray, G. (2015) How information technology resources can provide a
competitive advantage in customer service. Planning for Information Systems. [online]. 3(2),
pp. 444-460. Available from DOI: 10.4236/me.2015.63038
Block, P. (2011). A consultant by any other name. Flawless consulting: A guide to getting
your expertise used. San Francisco, CA: Pfeiffer.
Brad, S. (2013) The Everything Store: Jeff Bezos and the Age of Amazon. New York: Little
Brown and Co
Brandt, R. L. (2011) One Click: Jeff Bezos and the Rise of Amazon.com. New York: Portfolio
Penguin
Cohn, JM, Khurana R, and Reeves L (2005). Growing talent as if your business depended on
it. Harvard Business Review. [online]. 83 (10), 62–70. Retrieved from:
https://www.directorinstitute.com.au/sitefiles/Growing%20Talent%20as%20if%20Your
%20Business%20Depended%20on%20It.pdf
Cokins, G. (2013) Driving acceptance and adopting of business analytics. Journal of
Corporate Accounting and Finance. [online]. 24(2), 69-74. Doi:
https://doi.org/10.1002/jcaf.21831
Deckers, L. (2010). Motivation; Biological, Psychological and Environmental. Boston, MA:
Pearson
Houston, J.F. and Brigham, E.F. (2009) Fundamentals of Financial Management. Cincinnati,
Ohio.
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Levine, S. S., and Prietula, M. J. (2013) Open Collaboration for Innovation: Principles and
Performance. Organization Science, Harvard Press
Rothwell, William J., & Kazanas, H. C. (2004). The Strategic Development of Talent. Human
Resource Development Press.
Shayndi, R. (2011). Groupon Launches Anti-Amazon Promotion of Sorts. Available from:
https://blogs.wsj.com/digits/2011/12/20/groupon-launches-anti-amazon-promotion-of-sorts/
[Accessed 2 August 2018]
Wells, J.R. Danskin, W. and Ellsworth, G. (2015) Amazon.com, 2018. Available from:
https://www.hbs.edu/faculty/Pages/item.aspx?num=49324# [Accessed 2 August 2018]
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