Macroeconomics Issues Influencing Management’s Planning

Description: This paper is a broad qualitative and quantitative analysis of a publicly traded company. The student should approach the project as a financial analyst, looking at all aspects of the company, but focusing especially on past and plausible future financial performance as well as the role of the HR manager in the financial health of the organization. Process: Select a public company to analyze, and please do not choose the company where you are employed, but you may select a company in the same industry. Gather relevant information and data from a variety of available sources, including annual reports with financial statements, news and press releases, newspaper, magazine, and journal articles, and other analysts’ opinions. Sources of information should be cited in the final paper using correct APA documentation. The product of the student’s research is a 9-page paper, not including the title page or reference page.

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Finance for HR Leaders
Student Name
2/18/2020

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Contents
Background of the company............................................................................................................3
Mission, Goals and Objective..........................................................................................................3
Organizational Structure..................................................................................................................4
Product and Services Analysis.........................................................................................................4
Position of the Company.................................................................................................................5
Macroeconomics issues influencing management’s planning and decision making.......................5
Other Relevant issues......................................................................................................................6
Financial Analysis...........................................................................................................................6
Comparison of Financial Performance............................................................................................7
HR Connection................................................................................................................................7
Conclusion.....................................................................................................................................10
References......................................................................................................................................11
Appendix........................................................................................................................................14

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Background of the company
Amazon founded in July 1994 by Jeff Bezo’s in Bellevue in Washington. At initial it
began as an online marketplace for books. In the year 1995, it went to public. After some time it
expanded business to sell everything such as, electronics, furniture, food, clothes, toys, jewelry
and games. To grow and reach at top it started its services internationally in the UK and
Germany. In the year 2006, Amazon introduced its Amazon Web Services (AWS). Now, it is a
leading online retailer and manufacture of some products. The success of Amazon is due to their
efforts and Mr. Bezo’s confidence(Althafairi et al., 2019)
Mission, Goals and Objective
Mission of Amazon is very clear and definite that they want to be the Earth’s largest
customer centric company, as people can search out and determine everything they might want
to purchase online and endeavours to offer its consumers the lowest likely prices(Cusumano,
2017)
There are two types of goals, one is for which the company comes into existence and the
other is for fixed period of time. Therefore, the goal of Amazon from establishment was to ‘uplift
the worldwide standards for customer service and customer centricity’(Voigt, Buliga, & Michl,
2017)

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The objectives of Amazon are: to satisfy both existing and new customers, connecting
business with international markets and innovating new things(Nowicka-Skowron, 2017)
Organizational Structure
It is a system that shows and guides to carry certain activities in order to achieve the
targeted goals of the company. It aids is determining the way how information flows from one
level to another. In Amazon the structure used is hierarchical due to its vast size of business. As
it is the biggest retailer in the globe with 560,000 employees and above 300 million users across
the globe. In this the structure is segregated into many small teams. For each department and
level there are officers in-charge who adjudge all the matters related to that level or department
such as, for any finance related there is a chief finance officer. Also, for different work and
functions there is functional structure used(Singh, & Singh, 2019)
Product and Services Analysis

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It means study of products features, quality, quantity, cost, materials and design. It is
conducted to know about a particular product of a company. Amazon provides wide variety of
products to its customers and therefore, there is need of product analysis. The products and
services of Amazon are one of the leading one. The competitors of Amazon are recognized due
to its techniques or other factors whereas Amazon is known for knowledgeable products. They
are introducing more new products to make their customers lives easy such as, ECHO, Fire Stick
and ALEXA(Zhao, & Jin, 2016)
Position of the Company
In the market Amazon is a leading online retailer across the globe. And in United States it
has 280.5 billion U.S. dollars net sales in the year 2019. Amazon left its competitors behind and
becomes a leading online retailer in the world. The growth was not simple and achievable but
Amazon made it through its structure. It market share is also high due to its total sales and
captured market. The expansion of business has made the size of Amazon at immense
level(Wadhwa, Vashisht, & Phutela, 2020)
Macroeconomics issues influencing management’s planning and decision making
The macroeconomic issues affect a lot in planning and decision making of every
company. Some of the issues explain under:
 Inflation: it arises when prices are high and spending or earning of customers is less. This
influence Amazon, they have to change their strategies and make new plans to attract
customers.

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 Government Policies: to set as per the prescribed policy conditions Amazon has to study
it carefully and introduce new patterns. For example, tax rates increased on some goods
now, Amazon to deal with the change has to do proper planning and take right
decisions(Tritt, & Teschner, 2019)
Other Relevant issues
There are also some other relevant issues such as patents, government regulations, high
competition and growth rate. There are some issues faced or currently facing by Amazon is:
 The Department for Promotion of Industry and Internal Trade (DPIIT) has asked Amazon
to show details of their top five sellers due to the complaint received by brick – and –
mortar trade lobby groups. The complaint was in violation of foreign direct investment
(FDI) norms.
 In the year 2014, the courts in UK announced that Amazon had infringed trademark of
Lush Soap. The Lush had stopped its products to be available at Amazon still Amazon
advertises products via Google searches.
 And in September 2009, news pop-up that Amazon was selling MP3 music downloads
falsely. When the company withdraws their item and threatens Amazon for legal action,
the Amazon continued to sell the item on other country websites (Sudhakar, 2018)
Financial Analysis
The ratios reflect the financial position of Amazon.com. Its current ratio shows that there
is increase in percent of current assets but less than its last years and because of that the ratio of
2019 was 1.097 which is less than 1.098 that occurred in the year, 2018. Also, there is increase

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in the inventory with approximately 5% percent as compared to year 2017. The increase
inventory also increases the quick ratio of 2019 from 2018 by 0.1%. In the year 2019, there is
decrease in investment ratios such as, the return on investment decreases by .04. Another impact
was on return on assets.
Comparison of Financial Performance
 In order to analyze the sales and revenue of Amazon and EBay, it has been identified that
Amazon has earned $ 208.13 billion in the year 2018 that show case 30% of
improvement in their overall revenue whereas, the revenue of eBay estimated just $10.7
billion with an increase of 6.6% from 2017. Therefore, from the preceding three years
Amazon has extensively outpaced eBay (Kuksov, Prasad, & Zia, 2017).
 In order to examine the sales and returns of Amazon and Alibaba, it has been found that
Amazon posted 2018 revenue of $323 billion, more than four times $53 billion in
revenue that Alibaba achieved in the year 2018. Amazon has net margin of 4.3% and
Alibaba maintain a net margin of 17% which showcase that Alibaba is giving tough
competition to amazon (Medeiros, & Chau, 2016).
HR Connection
In order to analyze the monetary performance of Amazon, it has been found that the
financial performance of the company is Satisfactory that help the HR manager to retain its
employee in an effective manner. The financial growth of Amazon made this company know
brand in the international market. Therefore, the HR manager does not require focusing over the
advertisement of campus recruitment and also reduces time to search the candidate. Furthermore,
such financial growth also eases out the HR of the business to the certain extent. The HR can

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able to motivate its new and existing employee by focusing over their growth activities (Beck,
2012).
The role of finance in the life of HR manager is complex. It begins with deciding how as
well as which position to recruit. The time as well as energy spent on recruitment can be
expensive. Therefore, having a clear understanding of the position which has the greatest
financial impact on the organization, if they ate not filled is essential. On the daily basis, the HR
is required to analyze the advertisement cost for recruiting an employee for the company.
Therefore, the HR manager of Amazon, are given some budget that is required for them to
manage its financial activities in such budgeted amount. Furthermore, the company is growing in
the international market, so it creates easy for the HR manager of Amazon to attract new
employees towards its business in an effective manner (Joy, 2018).
Such financial information help in analyzing that is their change in management is
required or not. If the financial performance of the company is going down, then it have a
probability that employee are not satisfied to the certain extent. Therefore, HR manager of the
company need to focus over the issues that is faced by the employee that can help the employee
to make participation in growing business to the certain extent. Furthermore, when HR manager
want to introduce any kind of policy, service or program, then he would need an approval from
higher authority. It is required to analyze the cost of the proposal and that must be justified.
Therefore, HR manager of Amazon, can able to create a new program in an effective manner due
to the healthy financial position of the company. It helps the company to develop in the
competitive market in a valuable and competent way (Schiff & Schiff, 2016).

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Conclusion
The report can be summarized here that Amazon is popular and top online retailer all
over the world. From its initial years they have goal to be the largest customer centric company.
Amazon is expanding its business to comfort customers and provide everything at one store only.
The size of business is enormous and it requires a perfect structure to maintain it. Therefore,
functional structure is used. To compete and become priority Amazon is introducing new variety
of products and services. The business of e-commerce is increasing day-by-day and to survive in
it needs effective styles and proper management. Amazon is one of the primary online stores
across the globe. It is strong in its services and financial activities.

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References
Althafairi, B., Alhoumaida, N., Saxena, M. and Almsri, Z., (2019). Case study-
AMAZON. Journal of the community development in Asia, 2(2).
Arnett, J., Goldfinch, B., & Chinta, R. (2018). Multi-dimensional nature of innovation at
Amazon. International Journal of Business Innovation and Research, 15(1), 1-13.
Beck, T. (2012). The role of finance in economic development–benefits, risks, and
politics. Oxford Handbook of Capitalism, 161-203.
Blythe, A. (2016). Initial interest confusion: attempting to define its current status within
European trade mark law. European Intellectual Property Review, 38(11), 201-207.
Cusumano, M. A. (2017). Amazon and whole foods: follow the strategy (and the
money). Communications of the ACM, 60(10), 24-26.
Emerson, K. Y. (2019). From Amazon's Domination of E-Commerce to Its Foray into Patent
Litigation: Will Amazon Succeed as the District of Amazon Federal Court. NCJL &
Tech., 21, 71.
Gahlot, A., Singhal, R. K., & Kendre, R. (2019). A Study on Multi-Variate Financial Statement
Analysis of Amazon and eBay. NOLEGEIN-Journal of Financial Planning and
Management, 11-24.
Jia, K., Kenney, M., & Zysman, J. (2018). Global competitors? Mapping the internationalization
strategies of Chinese digital platform firms. International Business in the Information and
Digital Age, 187-216.

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Joy, J. (2018). Defining the Deal Timeline: Balancing Legal, HR, IT, and Finance.
In Divestitures and Spin-Offs (pp. 39-46). Boston: Springer,
Kuksov, D., Prasad, A., & Zia, M. (2017). In-store advertising by competitors. Marketing
Science, 36(3), 402-425.
Medeiros, M., & Chau, B. (2016). Fintech-Stake a Patent Claim?. Intellectual Property
Journal, 28(3), 303.
Moore, M., & Tambini, D. (Eds.). (2018). Digital dominance: the power of Google, Amazon,
Facebook, and Apple. UK: Oxford University Press.
Nowicka-Skowron, M. (2017). Functional-Decision Making Dimension of Logistics Systems
and Networks. Przegląd Organizacji, 2017(9), 52-62.
Onyusheva, I., & Seenalasataporn, T. (2018). STRATEGIC ANALYSIS OF GLOBAL E-
COMMERCE AND DIVERSIFICATION TECHNOLOGY: THE CASE OF AMAZON.
COM INC. The EUrASEANs: journal on global socio-economic dynamics, (1 (8)), 48-63.
Schiff, J., & Schiff, A. (2016). Get in gear! Team up with HR and IT to transform the future of
finance. Strategic Finance, 97(10), 24-32.
Singh, A. P., & Singh, G. (2019). Analysis of Amazon Product Reviews Using Big Data-Apache
Pig Tool. International Journal of Information Engineering and Electronic
Business, 11(1), 11.
Sudhakar, K. (2018). Amazon Web Services. International Journal of Management, IT and
Engineering, 8(6), 192-198.

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Tritt, L. F., & Teschner, R. S. (2019). Amazon Delivers Diversity: Geographical & Social
Influences on Corporate Embeddedness. Berkeley Bus. LJ, 16, 1.
Voigt, K. I., Buliga, O., & Michl, K. (2017). Creating the global shopping mall: The case of
Amazon. In Business Model Pioneers (pp. 67-77). Springer, Cham.
Wadhwa, B., Vashisht, A., & Phutela, N. (2020). Business model of amazon India-A case
study. South Asian Journal of Marketing & Management Research, 10(1), 32-40.
Zhao, L., & Jin, S. (2016, December). China's Dilemma of Cross-border E-commerce Company-
Take Amazon China as an Example. In 2016 International Seminar on Education
Innovation and Economic Management (SEIEM 2016). China: Atlantis Press.

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Appendix
Computation of Ratios
Description Formula Amazon.com
Financial year 2019 2018
Liquidity
Current ratio
Current
assets/current
liabilities
1.09
7
1.09
8
Quick Ratio
Current assets-
Inventory/current
liabilities
0.8
6
0.8
5
Efficiency
Inventory turnover ratio
Sales/ Average
Inventory
14.8
9
9.2
4
Trade receivable
collection period
trade receivables\
credit sales*365
0.1
0
0.1
0
Investment
Ratios
Return on investment
Net profit/ Total
investment
0.1
2
0.1
6
Return on Assets
Net Income/Total
Assets
0.0
5
0.0
6