Contemporary Growth Challenges for Business - A Case Study of Amazon

This report discusses the challenges faced by Amazon in terms of leadership, structure, finance, strategy, and communication & positioning. It also explains how these challenges are linked to the three core goals of the company, i.e., customer-oriented approach, company's growth and success, and employee engagement. The report provides future recommendations for Amazon to overcome these challenges and achieve its goals.

CONTEMPORARY GROWTH CHALLENGES FOR
BUSINESS

EXECUTIVE SUMMARY
The present report has been based on contemporary challenge faced by Amazon related to five
growth factors like leadership, finance, strategy etc. The company has been facing such issues
and due to that there has been impact on their profitability. Thus, the study has recommended
company to deal with these challenges in effective manner.

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
Challenges faced by Amazon through five dimension ...............................................................4
Link between dimensional growth challenges with the core goals..............................................6
Future recommendations..............................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES................................................................................................................................1

INTRODUCTION
Contemporary growth challenges for business is a situation or condition that menace to
hinder a business path of success (Derun and Mysaka, 2021). These challenges include the
administration of human resources, production, finance, marketing, ethical and legal issues. The
report will describe the challenges which the businesses are facing having both positive and
negative impact in the management of business. The report will discuss the five dimensional
challenges face by Amazon and how it can be linked with the three core goals of the company.
Further, the report will demonstrate the suggestions and recommendations of how the company
can work on these five dimensional challenges to achieve the three important goal of an
organization. At the end, the report will have a conclusion based on an analysis of current and
future state of the company.
MAIN BODY
Challenges faced by Amazon through five dimension
Amazon is one of the largest firm in technological area it mainly runs it business on E-
commerce and digital streaming in order to increase the sales of the firm. Although with the
change in the environment it is important for the company to deal with the changes in order to
sustain in the competitive market. Moreover, the challenges that business face nowadays are not
related to external factor but also internal and its impact can be both positive and negative on
firm performance. Along with this, in the time of pandemic Amazon has made use of digital
marketing strategy for sustaining.
Leadership: The organization is currently following contingent leadership style in order to
guide their employees as well as it can meet up with cut-throat competition. It has been found
that organization is following leadership challenges such as suiting the profitability of business
and the profit margin is also low (Asongu and Odhiambo, 2019). Another challenge is related
with treatment of employees as they are not able to manage their work life balance and due to
that organization has been criticized for the harsh treatment. Thus, Amazon need to change their
style in order to build healthy relation with them as employees are the key source for growth of
organization. Although for dealing with issue of profitability the company is finding innovative
idea so that it can maximize the profit.
Structure: Amazon organization structure is known as hierarchical in which there are three
CEOs, vice president and other important people. Although by making use of such organization

structure the company is facing issues such as lack of leadership which leads to motivational
issues. However, everyone needs a guidance and this structure allow people to be self-
motivators. Moreover, another challenge decision is hard to make as collaborative method is
required and it can slow down the decision-making process (Nikolić, 2018). In addition to this,
there is lack of understanding among people as they work cross functional and on various project
which creates confusion of responsibility for team members. Thus, there is need of maintaining
the supervision and delegation so that proper flow of communication is made between teams.
Finance: Amazon’s stock has been slumped since the fall of 2018 as investor believes that it
will be not beneficial for inviting in IT company (Ingole, 2021). In international payment
company has accounted for weak return and due to that organization was not able to invest in the
other sector. Although, due to lot of competition in global market company has to come up with
innovative idea which involved lot of money. However, in the time of pandemic most of the
customer taste and preferences has been changed and due to that it has suffered loss in the sales.
However, company has dealt with this by coming up with the idea of membership and its
benefits that customer will have if purchased Although this method has helped in attracting large
consumer and increase the sales.
Strategy: Amazon is following growth strategy to business so that it can expand their company
in international market but there are some challenges which is faced by organization. Such as it
is not bale to reshape its consumer experience and due to that there are some delays in success.
Moreover, company has to make services and product that attracts customer and increase their
loyalty towards them (Amankwah-Amoah, Osabutey and Egbetokun,2018). For example: The
grocery service was not attractive to consumer and profitability pressure has caused organization
to increase their prime service which was also challenged for the company in upcoming future.
Along with this, company is only dealing e-commerce and there is high competition in the
market area so it has to give their customer great experience. So it is important for the company
to come up with new strategy in order to meet the customer needs as well as to enhance their
growth and meet up with challenges.
Communication and positioning: It has been found that Amazon is following hierarchical
structure with organization and in that flow of information is one way. Such as leaders give their
orders to subordinate which may sometime decrease the moral of as employees. Along with this,
due to subordinate working in cross functional unit there has been miss communication among

members and it leads in creating negative business environment (Baneliene and Melnikas, 2020).
In addition to this, the position of Amazon is great in international market area as it known as
one of the famous brand of IT. But there is high competition faced by the company as each
business wants to position its product favourably in mind of customer so it is important for
Amazon to find difficult position of their products and services.
Although it is being recommended to Amazon that it should change their corporate
strategy from growth to customer centric approach as it will the company to keep them more
satisfy and improve their experience. Along with this, it needs to identify its core competencies
and targets them ruthlessly in order to meet up with the challenges. Moreover, I have been found
that most of the employees are not satisfied with the leadership style followed by them as there is
no one to guide workers properly (O’Cass and Wetzels, 2018). So it should adopt for democratic
style of leadership so that it can allow the subordinate to share their thoughts and ideas as well as
it will motivate them to come up with innovative aim Moreover this type of leadership will also
allow in building healthy relation with them and improve the culture within organization.
Although the current business model of the company does not allow Amazon to expand globally
as it do not fulfil the needs of international customers. Thus, it should setup portal in various
country and it should adopt for Global approach so that it can adapt with local condition. This
will contribute in covering both local and global market area.
Link between dimensional growth challenges with the core goals
The above five dimensional growth challenges are directly proportionate to the Amazon's
company goals. There is a connection between all five dimensional growth challenges i.e.
leadership, structure, finance, strategy and communication & positioning with that of the three
important goals which are consumer oriented, company's growth and employees engagement.
The link between them can be demonstrated:
1. Customer-oriented approach: This is an important goal for each and every organization
or business in the profit making industries. Customer is the king in the market and to be
in the market company's need to satisfy the king's for growth and success. Amazon's
contingent leadership approach teach the employees how to provide better experience to
the customers whether it's any platform of the Amazon. With happening experience of
customers it can help to increase more of them. Amazon's hierarchical structure facing
lack of leadership skills which indirectly affects the decision-making process and result in

the low consumer attraction (Kopalle, Kumar and Subramaniam, 2020). With Bezos
stepping down as CEO and taking participation in the board is the current issue the
company's faces. As covid-19 becomes endemic across the world, there has been a
decrease in the sales of the Amazon which witnessed a fall in the share price of the
company. It resulted in losing the company's stakeholders. Amazon is following growth-
strategy to enhance its business internationally but because of hierarchical leadership
structure and fall in the share prices the company is facing challenges dealing in the
international boundary which lead to low consumer base. The company is dealing with
the communication problem from leaders to its subordinates as it is a one way path which
result in the demotivation for an employee and affects the performance of the employees
towards to the employee with confused state of mind. With the cross functional
communication, there can be mis-communication of the information which results in the
negative business environment. The position of Amazon is always at risk due to the
competition in the market and therefore how these five dimensional can impact the
consumer-oriented goal of the organization.
2. Company's growth and success: Company's growth and success is depends on the
various aspects such as what kind of leadership approach the company follows, the
organizational structure of the working in the company, the financial position of the
company, growth-strategy, communication method between the leaders of the company
and the position of the company in the domestic and international market. Following the
contingent leadership, sometimes the leader can be an effective in one circumstance but
can be ineffective in another one which would diminish the growth and success of the
company. Hierarchical structure by Amazon reduces the efficiency of the employees as
this is the biggest challenge which the company is currently facing (Arnett, Goldfinch
and Chinta, 2018). The employees work balance life indirectly hinders the success of the
company. The financial position of the company can be directly related to the company's
success. When the company is growing then it could be analysed that the company has
been earning a huge revenue. The profit can be used in the further development of the
company's growth. Amazon is centred to the growth-strategy where they are focus to
develop in the international market but the fall in the share prices of the company
reduces the trust of the investors and customers in the company. This would indirectly

impact the growth and success of the company. Communication between the leaders of
the company is not in a proper sequence as Amazon has been following hierarchical
structure. This could create confusion amongst the workers in the organization and also
leads to delay in the decision-making process as it involves collaborate working in
decision-making. It affects the success of the company and its position in the market.
Therefore, these five dimensional are directly linked with the Amazon's growth and
success.
3. Employee's engagement: There is a direct link between five dimensional and employees
engagement in the Amazon's company. Contingent leadership is having a direct impact
on the employees working strategy as it teaches the employee how to be an effective in a
competitive market. The treatment with the employees are poor as heard from various
news channels. Their basic needs were neglected during the working time. It was heard
that many of the employees had left the company because of the poor working ethics of
the company. Amazon's hierarchical structure is focused on leader being more in power
(Tirabeni and Soderquist, 2019). Sometimes, employee were given order by its
subordinate which demotivate the employee working in that organization. Under this
procedure, employee's engagement is very less. No incentives to the employee witnessed
less participation of an employee in the progress of the company. Focusing more on the
international market reduces the existing company's employee profit sharing through
bonus or any other means. With the expanding business, human resources are being
required which would put emphasis on the new working force rather than an existing
one. Due to the hierarchical structure, employees are confused because of the inaccurate
information being delegated from the upper management. These all would together
reduced the engagement of the employee in the management and administration of the
company.
Future recommendations
With the above current state of the relation between the five dimensional with that of the
three core goals, the future recommendations for the Amazon are as follows:
1. Amazon having a huge market capture of the e-commerce, payment gateway, streaming,
grocery food have to keep the customers attached to the company. They need to promote
with big-billion sales, promotions, offers without compromising with the quality of the

products. This is the only way to build the trust of the consumer towards the company
and with this approach company can earn more profitability.
2. Amazon should focus on increasing offline stores which would be feasible for the
consumers who do not have accessibility to the online shopping. The company should
bring innovative technologies for customer's better experience. For example, Tesco Ltd
checkout-free stores concept can be utilized while launching offline stores.
3. Amazon's growth and success can be improved by launching new products which are in
accordance with the customer's demand. The change in the leadership approach and
strategy structure which helps to improve the flow of the communication in a faster way
and also improves the internal working of the organization which results in the greater
achievement of the company.
4. Behind the successful growth of an organisation, its employee plays very important role.
Amazon should allow its employee's to participate in the administration and working of
the business. Employee's engagement provide opportunities for innovative ideas which
would benefit both the company and it's employees.
5. The Amazon Prime Air delivery within 30-minutes with the help of drone would help the
company's growth and success (Hahn, Kim and Youn, 2018). The open-door policy of
the Amazon would help the employees of the organization to provide feedback by the
employees in regard to any issue which helps in better communication and with unique
delivery approach helps to build the position in the market.
CONCLUSION
With the help of this above report, it is cleared that there is a link between the five growth
dimensional of the company and it's three important goals. These five dimensional growth had
impacted on the Amazon's core goals i.e. consumer-oriented approach, growth & success and
employee's engagement which could be the path of the success. The current scenario of the
company in regard to the goals is challenging. Amazon's current contingent leadership and the
hierarchical structure had badly affected the employees working environment and the falling of
share prices badly affected the international value of the company. Following the small changes
in the working strategies, Amazon could be able to achieve the success and growth in the long
run of the market.

REFERENCES
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Online references