Amazon’s Operations Management and Decision-Making Models

This report delves into Amazon's operations management and decision-making models, focusing on its growth from an online book retailer to the 'everything store'. It explores the impact of globalization on Amazon's operations and the implications for the Australian retail industry. The report also examines whether e-commerce can replace the in-person shopping experience and discusses the long-term implications of Amazon's presence in the Australian retail industry.

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Assessment - Amazon’s Operations Management and Decision-Making Models
Date:-
Name of the student and student id
Rahul Gupta 132131
Name of the School
Kaplan Business School, MELB.

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Executive Summary
The following report entails the operations management of Amazon Retailers with
a major focus on its growth from the online retail book store to “Everything Store “across
the world. The report focuses on the innovations, persistence and supply chain management of
the store in enhancing its global operations and its impacts on the Australian retail
industry. Consequently, the reports also explore the existence of in-person shopping experience
even though online shopping among the global population.
Question 1: Amazon began as an online book retailer. How has it grown to be
known as the "everything store."
Amazon begun in 1995 as an online book retailer and over decades it has grown into
‘everything store’ as a result of the innovativeness on consumers wants and likes as well as
entrepreneurship of the founder Jeff Bezos (Morrison 2018, p.787). While opening in 1995, there
were several bookstore chains such as Crown Books, Barnes & Noble and Waldenbooks that
were in the storefronts in American shopping malls thus Amazon launched itself through major
book distributors and wholesalers to fill its orders thus having a well-established supply chain.
Amazon innovativeness skills and adaptability to the technological advancement facilitated the
success of the bookstore to embrace e-commerce that enabled its expansion across borders and to
diversify its products.
Amazon’s culture of critical thinking has enabled the employees to be more creative in
everything they do. Though the founder, Amazon culture is more of idiosyncratic thus
employees always write six-page narrative laying out their points on customer’s perceived

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perceptions on new intended products before every meeting. The aim of this is always to think in
the customer’s mind to us to understand the likes and dislike of the customers. The written
narratives always read silently at the beginning of the meetings, and after that principle of’
productive-thinking’ applied. The meeting discusses every possible way out thus meeting
customers’ expectations. (Murrell 2014) As stated by Silva and Ferreira (2014, p.515) great
organizations are transformed through the unchanging core principles and flywheel culture of
continuous innovation and improvement; this has enabled Amazon to grow beyond expectations
The global technological advancement transformed both consumers’ and business’ way
of interaction; thus Amazon focused on the computer systems in early 20000 when it realized it
was a gold mine to online power shopping. The dream was practically facilitated by a partnership
with other companies such as Apple’s iPhones apps that enabled the creation of the Amazon
Web Services. The computing infrastructure has enabled Amazon to adapt to the consumer’s
behavior on the new technology, thus has launched an advertising technology on Facebook’s and
Google that allows the shop to identify potential customers based on their likes. Through this
Amazon has well understood the target market thus focuses on producing the most wanted goods
about consumers taste and preferences thus keeps on increasing its sales.
Currently, Amazon Web Services has conquered more than 60% of people’s daily lives
as the services allow consumers now to order books wherever they are, get the deliveries, make
payments and read on online platforms such as Kindle e-reader app. This has offered an
advantage to both customers, and the business as a large number of sales are made, the customers
too feel more convenient in interacting with the bookstore. The ideology has been diversified
into other consumer goods such as jewelry, entertainment assets, and groceries among many

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others thus becoming “Everything Store” since most of the consumers’ products and services are
available within the store (Raw 2015, p.194).
Question 2: What aspects of Amazon's operations management are based on the
increased globalization of world trade?
Operations management focuses on the planning, designing and controlling the
production process to have high-efficiency products and services to maximize profits as well as
the expansion and growth of an organization. Amazon operation management is founded on the
amplified globalization of global trade. Amazon’s operations are based on different forms such
as locational, exchange and informational operations styles, and all these aims at using the
available resources to offer the best service at lower cost and higher profit to the organizations
(Harvey, Heineke & Lewis 2016, p.5). Due to recent globalization due to different forces such as
trade barriers, communication, market saturation, and cheaper transportation means, Amazon’s
operations management transformed to adapt to the system thus leading to the globalization of its
operations.
Digitalization has enabled easy global transportation of goods and services. Currently,
Amazon can digitalize its transportation operation that has impacted supply chain management
of goods from store to various customers with no or reduced distribution and transportation
costs. Large numbers of consumers can choose music, books jewelry and other goods from
anywhere in the world and receive the services without any physical movement through the use
of internet of things.

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Consequently, Amazon is now able to track a large number of containers that are carrying
physical products to various destinations through the use of IoT. The tracking of containers
through the IoT has improved the operations since goods move more efficiently from the ports to
various distribution warehouses and then to the specified end users. Currently, due to high
demand by customers and urgency of goods and services across the world, Amazon is
developing a drone-based ‘Amazon Prime Air’ that will speed up the supply and distribution of
goods within the weight of five pounds in various customers’ locations that are within the 10
miles of the fulfillment centers(Connelly, Ketchen & Hult 2013,p.230).
Globalization has increased the number of Amazon’s customers. Thus the company needs
better inventory management to ensure efficiency of goods and services .the inventory
management focuses on maintaining optimal inventory ordering and holding through the
application of just-in-time inventory to enable shipment of goods that arrive in the company to
various customers to fulfill the already placed orders (Chowhan 2016, p.121).
Globalization has impacted the locational strategy of Amazon. Amazon strategic plan
always entails customer’s accessibility through having warehouses near the customers. The
globalization has enabled the expansion of the business to a large number of customers, thus
forcing it to construct a warehouse that is optimally near the largest number of potential
customers of the online retail trade.
Lastly, globalization has impacted the retail design of Amazon to engage in the
production of other products such as backpacks, iPhone chargers, dog poop bags, batteries, and
Bluetooth speakers(Mofokeng & Chinomona 2019, p.1). The idea is generated by the inability of

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some third-party products to meet customers’ needs and could also be produced at much lower
cost in massive production.
Question 3: Amazon’s marketplace focuses on smaller sellers and manufacturers by
linking them with a huge customer base and fulfillment program. Can e-commerce ever
truly replace the in-person shopping experience?
Over the past years, online shopping has taken major steps across the world giving threat
to the physical stores as a result of numerous benefits gained from both customers and business
itself. Some of the advantages gained from online shopping by consumers entail convenience, a
large number of products review that help in decision making, varied products to choose from
among others. On the other hand, online retail also benefits from a large number of customers,
induced buying and high level of marketability (Abdellatif & Jenene, 2014). However, it is quite
difficult for online retail to replace the in-person shopping experience due to the following
reasons:
First, Shopping is regarded as a socializing activity that aims at bringing both the buyer
and the seller closer to have a face-to-face discussion. Though e-commerce tends to have distinct
communication and marketing aspects in this millennial generation, the physical store still
possesses a particular charm that offers customer’s best shopping experience (Handa & Gupta
2014, p.28). Large numbers of people still have that strong desire to physically interact with
goods and service they intend to purchase to have the three shopping experiences, which is not
available in e-commerce. These are verbal experience, tactile experience and display experiences
offer the customers the opportunity to rationalize all the sense to give assuredly that the product
suits their needs.

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Secondly, e-commerce purchasing is facilitated by the availability of the computer
system and the internet; however, a large number of consumers still don’t have the accessibility
of computers and the internet. A study shows that many parents tend to shop a lot online than
people who don’t have kids since they want to recapture their lost time, while young people are
still energetic tends to require full shopping experience thus visits physical stores. Statistics show
that about 44.9 do not have internet or knowledge on how to do online purchasing (Blázquez
2014, p.98). Consequently, as the generation Z grows into adulthood, the number of baby
boomers tends to reduce, thus this provides a threat to the future of e-commerce.
Customers tend to build trust in brands that offer good quality and that have been
available for quite a long time (Srivastava 2018, p.65). Shopping needs trust services after
purchase; thus store has an indispensable role in case a product turns out to be lesser perfect; thus
consumers tend to entrust the purchase with physical store than virtual stores. The physical store
offers the customers with the opportunity to register their complaints and return their substandard
products thus making the large number to consider in physical shopping has the best experience
since it reduces the chances of getting products that are less your expectations. Lastly, both the in
physical stores and e-commerce have realized that they are unable to exist without one another.
Large numbers of e-commerce are currently opening a store along the streets as the in physical
stores are adopting internet business strategies.
Question 4: What is (or could be) the real long-term implications of the increased
presence of Amazon to the Australian Retail Industry?
Over the past years, Australia Retail industry has always been protected from
globalization impacts until the recent ban lifts that provide a way for the entry of international

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companies in Australia. With increased internet-based competition, Amazon has found its way
into Australia posing numerous impacts on Australia’s Retail industry.
First, Australia’s retailers will be forced to strategize on their prices setting since Amazon
is planning to cut down the local prices of the product by about 30%. The price reduction will
force Australia’s retailers to look for new productions and supplying systems that will enable
them to withstand Amazon’s strategy (Portella, Rodrigues, Nakano & Melo 2018, p.4451). To
maintain the price competition with Amazon, Australia retailers will be a partner with other
companies that can provide complementary products and services at a more reduced price and
packaged deals.
Secondly, Australia’s retailers will have to reorganize their supply chain management and
adopt faster distribution and delivery systems to meet the increased customer’s expectations and
to be at the par with the Amazon sophisticated logistic framework. Amazon is better in
predicting customers’ particular needs and preferences and putting the products ready in store for
distribution and delivery immediately a customer makes an order without delay. Thus Australia’s
retailers will have to analyze and understand the major sales locations, customers purchasing
behavior and preferences ahead of time (Teichmann, & Schlippenbach 2014).
Thirdly, Australia’s Retailers will be forced to use sophisticated data analysis tools to
enhance their understanding of customer’s shopping behavior and preferences (Cheng, Wu &
Chenn 2019, p.128). The retailers will have to marry both the online and offline data so that end-
to-end customer’s experience is fully understood and made as seamless as possible and the
acquired data will be used by both the logistics and marketing team.

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Fourthly, retail professionals will have a positive impact due to the Amazon overstay in
Australia. The retail professionals will have the opportunity to expand their skill set in marketing
through by learning from the seamless end-to-end customer's experience provided by Amazon.
More importantly, there will be high demand for retail professionals that will be able to analyses
consumers purchase behavior since most of the Retail Shops will be requiring the talents to
enable them to withstand the stiff competition from Amazon retail stores.
Lastly, some of Australia’s retailer that will not up their game be forced to shift out of the
way thus leads them to collapse. However, some of the retailers might adopt the analogy of “if
you can’t beat them, then join them’ to ensure their availability in the market. Such retailers will
turn back to Amazon platforms to use as advertising place for their products and services
leveraging their wide base customer’s reach and technological capabilities.
Total Word Count - 1987

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List of References
Abdellatif, T. and Jenene, C. (2014). Modeling the Effect of the Perceived Value of E-Shopping
Experience on the Purchasing Decision Process in the Social E-Commerce. SSRN Electronic
Journal, 9(2),pp.29-78.
Blázquez, M. (2014). Fashion Shopping in Multichannel Retail: The Role of Technology in
Enhancing the Customer Experience. International Journal of Electronic Commerce, 18(4),
pp.97-116.
Chowhan, J. (2016). Unpacking the black box: understanding the relationship between strategy,
HRM practices, innovation and organizational performance. Human Resource Management
Journal, 26(2), pp.112-133.
Connelly, B., Ketchen, D. and Hult, G. (2013). Global Supply Chain Management: Toward a
Theoretically Driven Research Agenda. Global Strategy Journal, 3(3), pp.227-243.
Handa, M. and Gupta, N. (2014). A Study of the Relationship between Shopping Orientation and
Online Shopping Behavior among Indian Youth. Journal of Internet Commerce, 13(1), pp.22-44.
Harvey, J., Heineke, J. and Lewis, M. (2016). Editorial for Journal of Operations Management
special issue on “Professional Service Operations Management (PSOM)”. Journal of Operations
Management, 42-43(1), pp.4-8.

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Mofokeng, T. and Chinomona, R. (2019). Supply chain partnership, supply chain collaboration
and supply chain integration as the antecedents of supply chain performance. South African
Journal of Business Management, 50(1), pp.1-60.
Morrison, D. (2018). Into the Amazon. Journal of American History, 105(3), pp.785-788.
Murrell, M. (2014). Book Review: Brad Stone. The Everything Store: Jeff Bezos and the Age of
Amazon. The Journal of Electronic Publishing, 17(2),pp.6-35.
Raw, L. (2015). The Everything Store: Jeff Bezos and the Age of Amazon BradStone. London:
Bantam Press, 2013. The Journal of American Culture, 38(2), pp.194-194.
Silva, J. and Ferreira, J. (2014). Amazon Smartsales Ticketing System. Procedia Technology, 17,
pp.510-519.
Srivastava, M. (2018). To Study the Relationship between Service Encounter and Retail
Experience on Customer Satisfaction and Customer Loyalty with Impact of Loyalty Program
Membership. Indian Journal of Commerce & Management Studies, IX(3), p.65.
Portella, G., Rodrigues, G., Nakano, E. and Melo, A. (2018). Statistical analysis of Amazon EC2
cloud pricing models. Concurrency and Computation: Practice and Experience, p.e4451
Cheng, L., Wu, C. and Chen, C. (2019). Behavior Analysis of Customer Churn for a Customer
Relationship System. Journal of Global Information Management, 27(1), pp.111-127.
Teichmann, I. and Schlippenbach, V. (2014). Collusive Effects of a Monopolist's Use of an
Intermediary to Deliver to Retailers. SSRN Electronic Journal, 9(2),pp.19-78.

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