Introduction to Amazon

Contents
Introduction to Amazon...............................................................................................................................2
Analysis........................................................................................................................................................3
Recommended strategies for Amazon......................................................................................................22
Conclusion.................................................................................................................................................24
References-................................................................................................................................................25

Introduction to Amazon
Amazon is a much known E- commerce business that has a very strong brand image because of the
customer relations. It has already set a benchmark in becoming market- leading technological
infrastructure. It provides different type of products that satisfy the needs of the customers. Amazon
has entered into e- commerce trading area in 1995 and started by Jeff Bezos. Amazon has expanded
its operations afterwards in different countries like Europe, Asia and US. Products have been
displayed with amazon “advertising publish under the press release, and many producers display the
products on the website to make money. Amazon always keeps the prices low so that it can be
affordable to everyone. There are many competitive websites that give a strong competition to
Amazon but still due to the loyal customers and brand image, it sustain in highly competitive
advantage. According to Amazon, customer satisfaction is on priority and they always take care
about customer’s concern. It is one of the leading online sellers and sells a big variety of
heterogeneous product line. It is having headquarters in Seattle and has customers in approximately
50 states of USA and 160 different countries. It offers products like books, clothing, hardware,
software, home based products and electronics to its customers through its website and application.
It believes in applying innovation to sustain in the market and to attract the customers. Amazon has a
very customer friendly website and applications by which customer’s avail online shopping in an
easy way.

Analysis
Globalization
Globalization has been prevailed everywhere in each and every part of the world. It refers to a
process in which there is an interaction and integration among the people, culture, organizations and
countries. Globalization impacts different part of the business process and is considered a broad
topic. There are different brands like McDonald’s that possess a very strong brand image. Every
single person knows this brand because it operates in almost every country (Walsh,
Bhagavatheeswaran and Roma, 2019).
The Factors of Globalization
There are many factors that are directly related to the concept of Globalization like market,
environment, cost and competition. Globalization keeps on moving whether in positive or a negative
way. All the factors help in driving the globalization.
1. Cost
Cost is a very important factor that helps in motivating different companies all over the world. It also
helps an organization becoming a global brand. It helps companies to operate in more than one
country and expand its operations by selling product and services on a global basis. Every company
wants to expand its operations and become a global brand and reduce the cost of the company as
much as possible. Low cost production means operating production activities in countries where
there are low tariffs and taxes.
Amazon is a very good example that considered cost factor in globalization. There are many sellers
that are very happy to sell their products on Amazon with good margin even after deducting
Amazon’s share. There is a very minimum cost that is levied in selling the products of different
sellers. Amazon has also controlled cost by charging shipping cost on orders of small amount and
therefore when people place bulk order then only shipping cost is free for them (Huang and
Benyoucef, 2013).
2. Market

There are different countries all over the world and people reside in the same possess different
lifestyle so it becomes really difficult to satisfy different type of needs. Companies always try to sell
the products at a particular location as per the customer’s choices and requirements. If an
organization sells high price products in low income areas then no one will be going to purchase it
and there will be so sales as those costly products are not easily affordable by everyone. So,
companies have to choose whether the products are good for a particular location or not. Amazon is
operating in many countries as it is easily reachable to everyone because of its online presence. It
does not own physical stores and only provides online products to the customers. Amazon has tied up
with many sellers and sells their products online in affordable prices. In order to get a hassle free life,
people nowadays prefer online order websites so that they can easily get the product on their choice
at doorsteps. There is no segmentation because it is already present everywhere (Tourne et al., 2016).
3. Environment
Every large organization comes at a price and the whole world has a watch over them. Every
organization has to follow some rules and regulations and they have to make sure that they will not
provide any kind of harm to the environment. If they do so then it directly harms the reputation of the
company. It will result in the loss of customers because of polluting the environment. Every country
has its own regulations related to the environment and companies are not going to break the laws
because of huge fines implacable on that. Amazon also support pollution- free environment and do
every possible effort to make environment pollution free. Amazon has provided many offers to the
customers like exchange of old phones while purchasing new ones. It helps in protecting the
environment.
4. Competition
Even after a company is doing well in the market and is a world famous organization, it doesn’t mean
they can take it easy. There are many strong competitors in the market and have the capability to take
over the position of top players in a particular industry. For sustaining in the competition, every
organization needs to adopt some development techniques to attract the customers like advertising
and conduct research to know the market demand (Deniz and Atışman, 2017).
Amazon is a very big brand and has capability to face strong competition in the market. It has many
competitors like Flipkart and Snap deal. These organizations are of similar nature like Amazon and
provide online services to the customers (Jukić, 2019).

The Benefits & Challenges for Amazon
1. The Cost Benefits & Challenges
Because of Globalization, Amazon has taken benefits out of the costs. It has spread all its reach to
every country all around the world. It has chosen China for expanding its operation because it is a
developing country and labor cost is cheaper as compared to developed countries like UK, US and
France. Although quality of life is not that much great as salaries and wages are very limited and it
helps in reducing the cost of the company (Tracey, 2015). Amazon has acquired its resources from
all around the world because of low cost. Acquiring resources from developed countries costs higher
in compared to less expensive countries like China. Even after these attractive benefits, Amazon is
facing some more challenges. In order to expand all operations globally, there is a need of investing
high capital into the business because of increasing operating cost. Amazon has started providing
prime membership to customers by which customers can get some extra benefits like free and early
delivery. It helps in acquiring a higher market share and retains loyal customers (Boudreaux, 2008).
2. The Market Benefits & Challenges
Amazon has expanded its operations globally and now they are carrying its operations in
international market. It provides benefit to the organization and able to influence customers to
purchase the products that helps in increasing the profits. An important benefit that Amazon is
enjoying is the brand image (Sinclair and Jayawardena, 2010). By expanding refers to make the
brand familiar to people and it make it more prestigious. It also helps in making the brand image
strong and makes it more recognizable. Market refers to the customers and customer means people
(Goldenberg, 2015). There is different type of social challenge that Amazon has to face while
operating business activities like economy, age, religion, culture and life. Amazon sells different type
of products suitable for different type of population so that it can able to satisfy the needs of the
customers as per their affordability.
3. The Environment Benefits & Challenges
Almost every person thinks that Globalization is not good for the environment but it is not a true
statement. There are different benefits that organizations are enjoying because of Globalization. If an

organization acquires resources from different country then automatically it reduces the resources of
that particular country and provides harm to the environment. So it is better to acquire resources from
different parts of the words so that it can maintain a level of balance (Flanigan, 2016). It helps in
maintaining the environment cleaner and people can get oxygen to live. Globalization is a very wide
concept and by operating in different countries means to maintain the environment healthy and clean.
There are some companies that dump their waste in an illegal way in some areas and it affects the
wildlife and people living there. Countries levy heavy fines to those companies involved in illegal
activities. For maintaining safe environment, Amazon has to take care about the environment and has
to spend an extra amount of capital to recycle the old products and try not to harm the environment
(STEGER and WILSON, 2012).
4. The Competition Benefits & Challenges
Amazon was one of the first players in online business and it has created a very strong brand image
in the market. It has a very loyal group of customers that help the organization in providing
competitive advantage. Globalization also helped the organization by making it familiar with people
all around the world. Amazon has expanded its operation globally but still there are some
organizations like Flipkart and Snap deal that gives a strong competition in the market. Amazon
provides very good services to its customers like easy replacements and return to make customer’s
happy. They also make sure to deliver the product before expected time. Sometimes, they face many
challenges because of competition as there is always a need of development and technological
advancement to retain in market (Mohammad Arabzad an, 2012).
Supply chain is also very important aspect for the organization as it contains various risks like
politics, economic factors and natural disasters. It is important to choose a reliable supplier that can
provide services without any interruptions and save the time and money. Supply chain diversification
helps in minimization of risk as the organization have a diverse suppliers and problems do not impact
the same. It is beneficial to ger the suppliers pre – qualify in advance so that it can help in reducing
the time and money lost because of disruption. There must be proper strategic suppliers for managing
the risk.