Managing Innovation in Business: A Case Study of Amazon

This report analyzes Amazon's innovation history, existing innovation performance, and capabilities. It also discusses the e-commerce and artificial intelligence industries in 2021. Learn how innovation has helped Amazon become one of the largest companies in the world.

Managing Innovation in
Business

Executive summary
This report summarises the information of chosen organisation which is Amazon. It is a
technology-based company that offers different products and services over an e-commerce
platform. It consists of innovation history as Amazon adopt innovation from the time it started. It
is a company that is highly focused on innovation and also implements it fast in order to get the
advantage of the early mover. This report also includes the existing innovation performance of
the company as innovation provides various benefits to the firm and its performance. On basis of
it, the business has earned huge profit and it also creates a positive impact on the marketing share
of the business. there are different capabilities possessed by Amazon that will helps them to
adopt innovation in their organisation. Moreover, it summarises the adoption of the industry in
which Amazon operates in the year 2021. There are various changes occurring in this industry in
today’s time as there is increasing use of digital tools which provide them an advantage to get
growth and success in the marketplace.

Contents
Executive summary.........................................................................................................................2
Contents...........................................................................................................................................3
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
Introduction of organisation and its innovation history...............................................................1
Organisation existing Innovation Performance and Capabilities................................................2
The Industry in 2021....................................................................................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Innovation can be described as creating something new with the idea, product or method. It is
introducing something new in business that will provide progress for the business or make
improvements in the existing offering of the firm (Antysheva, Kochinev and Sviridenko, 2019).
It is essential for a business as it allows them to increase sales and profitability on basis of
differentiating their offering from those of competitors. This project report consists analysation
of Amazon which is a technology-based company based in America. It is providing its service in
different parts of the world and is considered one of the largest companies. It is earning huge
profits and also has numbers of skilled employees working for the growth of the company.
MAIN BODY
Introduction of organisation and its innovation history
Amazon is a multinational organisation that is based on technology and focuses on cloud
computing, e-commerce, artificial intelligence, digital streaming and others. It is also considered
the most influential economic as well as a cultural force all over the world. It is one of
organisation which has the most value in the whole world. It is one of the organisation that was
founded by Jeff Bezos in the year 1994. It is an e-commerce organisation that was started as a
marketplace for selling books through online platforms (Baldwin and Curley, 2018). Later, this
organisation has expanded into different categories of products. There are different subsidiaries
of this organisation like Zoox, Amazon web service, Amazon Lab 126, Kuiper Systems and
others. There are some other subsidiaries of this organisation including IMDb Ring, Whole
Foods Market and Twitch. It is an innovation and technology-based company which is getting
success in the marketplace on a continuous basis. It is also serving different services all over the
world. This organisation is employing around 1622000 employees all over the world (Amazon,
2022). The aim of this organisation is to provide different services to its customers through an
online platform and also focus on price, convenience as well as selection.
Innovation history
Amazon is a technology-based organisation which is focusing on innovation from its initial
stage. In initial stage, it was started as online company which is selling books to its customers. It
is investing huge among in technology and marketing which will helps them to compete in the
market. Amazon in order to adopt innovation also offers CDs and DVDs to its customers and
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also allows them to listen to song clips. It is also recommending songs to shoppers according to
their moods. Amazon also has patent rights for its ability to offer purchasing of a product with
one click of the mouse (Rikap, 2022). It provides an early advantage to business as it prompts
customers to purchase more products and also helps the company to collect data of customers.
Another innovation adopted by Amazon is that it allows third-party seller to sell their products
and service there (Amazon, 2022). It results in an increase in the number of transitions for their
website and helps the company to get numbers of customers over their websites. With aim of
satisfying the needs and requirements of customers, Amazon also started selling clothing the
partnership with different brands. In order to generate more income, this business also provides
licensing to different e-commerce websites which will dominate cloud hosting and also generate
revenue (Das, 2021). Offering prime services to customers also create benefits to companies as it
allows them to retain customers and also to make numbers of members of the company in
different parts of the world. For purpose of expanding business, Amazon has also acquired
different technology-based companies which helps them to take advantage of the adoption of
technology. For this Amazon acquire different companies like Audible which has different
library programs and also launch Kindly for e-books (Amazon, 2022). It also acquires the
company of a robot named Kiva System which is the maker of warehouse robots. Another
innovation introduced by Amazon is Echo which is a platform for Alexa. It is virtual personal
assistance of a person and helps firms to understand consumer data and the ways in which they
make purchasing decisions.
Organisation existing Innovation Performance and Capabilities
Innovation can be described as a process that can be considered by organisation and individuals
in order to conceptualise new products, ideas, processes and to approach existing ideas,
processes and products in new ways. It is important for businesses as it allows them the
opportunity to earn more profit (Likar, 2021). It allows businesses to introduce something new in
the market which will attract a number of customers towards products of the company and on
basis of it, a business can differentiate its products and service from others.
Amazon is a technology-based organisation which is operating in different countries. It is
adopting different types of innovation in its organisation. All these innovations help businesses
for purpose of getting improve their performance in the market and allow them to be among the
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top ten technology-based companies (Amazon, 2022). It is a business that is earning proper
revenues in the market and also focusing on continuous improvement in its services.
Amazon is aiming to reach to become a trillion-dollar company in the world as it is adopting
innovation and technology in business and also focusing on providing customer services that
help them to get growth in the marketplace. Any failure does not distract Amazon as it is
emerging as a new innovation model that will increase its effectiveness (Mariev, Nagieva and
Simonova, 2020). There are different things that will help Amazon like they implement
innovation so long and also implement it in their production, process as well as business models.
On basis of this innovation, it becomes the highest-grossing e-commerce organisation which has
net sales of around $386 billion and also has around $578 billion on the estimation of physical
online gross merchandise volume in the year 2021 (Amazon, 2022). It has earned revenue of
around 80% of the total from retail and also follows different types of web services like storage,
cloud computing, offering, database and others that provide the remaining revenue.
There are different capabilities of Amazon that will help them to adopt innovation in their
organisation successfully. These capabilities of Amazon in the context of innovation and
technology are mentioned below:
Amazon drives innovation from the top: According to the survey, it is identified that there are
70% of the senior leaders consider innovation among the top three priories (Tucker, 2022). CEO
of Amazon, Jeff Bezos spends on innovation and also trusts lieutenants of idea implementation.
He is spending his time identifying new innovations for the company as on basis of it, the
company has reached to there its present situation and will also help them to get success in the
future period of time.
Amazon thinks of ideas as an asset: There are various companies there that only include plants,
machinery, equipment and people as assets but Amazon also put a value on ideas. Jeff Bezos is
focusing on unconventional concepts, enabling different technologies and also offering new
ways of operating (Mousavi, Bossink and van Vliet, 2018). He believes on a continuous stream
of ideas will provide growth to the firm for this, it is important for the business to create a culture
that aligns with values and ideas at a different level and also implement it on a speedy basis.
Move first, experiment constantly and fail fast: Amazon is one of the organisation which has
no background in hardware but still is waded into electronic devices with the Kindle e-reader in
the year 2007. There is a various problem that occurs in the path of Amazon regarding this
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innovation but still, it changes the game and also builds confidence for the firm. On basis of it,
the firm also learns new skills and also introduces Echo and Alexa which helps the firm to
increase its competitiveness in the market and provide them success (Vigliarolo, 2020). Amazon
creates values for experiments that play important roles in the success of the company. It has
hired various skilled and talented employees in its organisation which will allow the firm for the
purpose of getting success in the marketplace. It is also a company that will respect to ideas
offered by their employees and implements them in the organisation in order to get success.
Amazon practices data-driven and customer-led innovation: It is one of the organisations
which is getting success and growth in the market on basis of understanding needs and
requirements. It is using customer data in order to improve its services and also to focus more on
customer requirements (Perrini and Russo, 2019). It is also focusing on customer-led innovation
which is required by the business. Amazon listens to customers on basis of their data and also
stimulates their needs in their offering. It is important in order to increase the level of satisfaction
of customers.
The Industry in 2021
Amazon is one of the large and most successful organisation which is operating its business in
the different industries including E-commerce, artificial intelligence, entertainment, cloud
computing, electronics and others. All these industries are highly advanced and competitive in
their pace. The E-commerce industry is developing and getting advanced day by day. In the year
2019, the market size of the e-commerce industry increased and is valued at $9.09 trillion. The
increasing use of digital technologies by people and businesses has also given rise to e-
commerce websites. Also due to pandemics, people prefer to buy things from online platforms.
With the increasing threat of the covid-19 pandemic, governments of different countries put
regulations on people not going out (Si, Kavadias and Loch, 2022). Due to this people are
purchasing things from the online platform. For instance, Amazon is one of the organisations
which is providing delivery to products and services of the company even during periods of the
pandemic which will give rise to its business. The marketing share of the e-commerce industry is
also expected to grow by 14.7% in upcoming years (Coppola, 2022). Increasing use of the
internet and use of smart phoned in all over the world are also giving a push to this industry.
There are different e-commerce options are providing by companies to their customers like
digital content, financial services, travel and leisure e-tailing and others. Amazon is operating in
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this industry which creates a significant impact on the performance of the company (Stoletova,
2019). With operating in this industry. Amazon is operating even in the situation of the
pandemic. It is providing different services to its customers and also allow them to buy products
and services from their home with just one click.
Artificial intelligence is another component that is developing and growing industry. The market
size of this industry is valued at $93.5 billion in the year 2021 and is also estimated to expand in
the future period of time with 38.1% (Stamford, 2022). There is continuous research and
innovation is taking place in this industry and also consisting the use of advanced technology.
There are different verticals used in this industry like health care, automotive, manufacturing,
finance, retail and others. There are various businesses operating in this industry. The use of this
technology in business provides an opportunity to business to offer services to customers
according to their own interests. It understands the data of customers and also recommends to
them things that are of their interest, likes and preferences (Thøgersen, 2021). Amazon is using
this artificial intelligence in their business which provides an opportunity for business. It allows
them to recommend products to customers which are their preferences. Amazon prime is an OTT
platform where Amazon is recommending serious to viewers according to their interests and
requirement. It will enhance the experience of guests and also allow them to spend more time on
the services of the business.
Innovation audit
Innovation audit in regards with Amazon is as follows:
Serial no. Innovation type Year Introduced
1 Digital streaming channel 2005
2 Voice assistant tools 2014
3 E-commerce site 2001
4 Amazon Go stores 2018
CONCLUSION
From above mentioned project report, it can be concluded that innovation is playing
important role in the survival of the business. With time, there are different changes that occur in
the marketplace and it is important for businesses to adopt these changes. innovation is also
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important for businesses in order to offer changes to customers according to their requirements.
With the adoption of this innovation in business, a business can improve its performance in the
marketplace. The success of innovation is also dependent on the capabilities of the firm to deal
with innovation. There are different types of industries and all these adoption different
innovations which will provide growth in the marketplace.
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REFERENCES
Books and Journals
Antysheva, E.R., Kochinev, Y.Y. and Sviridenko, M.V., 2019, October. Factor scoring the total
potential of a region as a tool for strategically managing innovation in its socio-
economic development. In Proceedings of the 2019 International SPBPU Scientific
Conference on Innovations in Digital Economy (pp. 1-7).
Baldwin, E. and Curley, M., 2018. Managing Innovation in the Digital World. In Managing
Innovation in the Digital World. De Gruyter.
Das, S., 2021. Managing innovation: The three ‘Ps’ of creativity and commercialisation.
In Innovations in Magazine Publishing (pp. 80-102). Routledge.
Likar, B., 2021. Managing Innovation in Smart Industries. In Engines of Economic
Prosperity (pp. 21-36). Palgrave Macmillan, Cham.
Mariev, O.S., Nagieva, K.M. and Simonova, V.L., 2020. Managing innovation activity factors in
Russian regions through econometric modeling. Upravlenets, 11(1), pp.57-69.
Mousavi, S., Bossink, B. and van Vliet, M., 2018. Dynamic capabilities and organizational
routines for managing innovation towards sustainability. Journal of cleaner
production, 203, pp.224-239.
Perrini, F. and Russo, A., 2019. The Roots of Corporate Sustainability: the Art of Managing
Innovation and Relationships by illycaffè. In Managing Sustainable Business (pp. 363-
394). Springer, Dordrecht.
Si, H., Kavadias, S. and Loch, C.H., 2022. Managing innovation portfolios: from project
selection to portfolio design. Available at SSRN.
Stoletova, M., 2019. Managing Innovation in Higher Education: Practical Examples. In ISPIM
Conference Proceedings (pp. 1-9). The International Society for Professional
Innovation Management (ISPIM).
Thøgersen, D., 2021. Managing innovation on the public frontline: three approaches to
innovation leadership. International Journal of Public Sector Management.
Rikap, C., 2022. Amazon: A story of accumulation through intellectual rentiership and
predation. Competition & Change, 26(3-4), pp.436-466.
Online:
Amazon, 2022 [Online] Available through: < https://www.amazon.science/academic-
engagements>
Amazon, 2022. [Online] Available through: https://www.aboutamazon.com/workplace/our-
employees
Amazon, 2022. [Online]. Available through: <https://pitchbook.com/profiles/company/11919-
79#overview>
Coppola D., 2022. E-commerce in the United Kingdom (UK) - statistics & facts [Online]
Available through: <https://www.statista.com/topics/2333/e-commerce-in-the-united-
kingdom/
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Amazon. 2022 [Online] Available through: < https://www.aboutamazon.com/news/innovation-
at-amazon>\
Stamford, 2022. Market Growth Will Accelerate as Organizations Progress Their AI Maturity
[Online] Available through:
<https://www.gartner.com/en/newsroom/press-releases/2021-11-22-gartner-forecasts-
worldwide-artificial-intelligence-software-market-to-reach-62-billion-in-2022>
Tucker R., 2018. How Does Amazon Do It? Five Critical Factors That Explain Amazon's
Incredible Success. [Online] Available through:
<https://www.forbes.com/sites/robertbtucker/2018/11/01/how-does-amazon-do-it-
five-critical-factors-that-explain-amazons-incredible-success/?sh=4ee0460841b9>
Vigliarolo B., Amazon Alexa is the leading digital assistant on the market [Online] Available
through: <https://www.techrepublic.com/article/amazon-alexa-the-smart-persons-guide/>
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