Operations Management and Decision-Making Models

This article discusses the journey of Amazon from an online book retailer to an everything store, aspects of Amazon's operations management on the increased globalization of world trade, Amazon's journey of e-commerce replacing in-person shopping experience, and real long-term implications of the increased presence of Amazon to the Australian retail industry.

Running head: OPERATIONS MANAGEMENT AND DECISION-MAKING MODELS
OPERATIONS MANAGEMENT AND DECISION-MAKING MODELS
Student’s name
Name of the university
Author’s note

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OPERATIONS MANAGEMENT AND DECISION-MAKING MODELS
Table of Contents
1. Amazon's journey from the online book retailer to ‘everything store'........................................2
2. Aspects of Amazon's operations management on the increased globalization of world trade....3
3. Amazon’s journey of e-commerce replaces the in-person shopping experience.........................4
4. Real long-term implications of the increased presence of Amazon to the Australian Retail
Industry............................................................................................................................................6
References........................................................................................................................................9

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1. Amazon's journey from the online book retailer to ‘everything store'
The journey of Amazon is a kind of single-minded focus that help Jeff Bezos to
consolidate the business. The market cap of the company is over $260 billion (Amazon.com
2018). This is the most valuable retailer in the world and they have started their business with
books (Klaus 2013). Now the company has the worldwide reputation and they have changed
their entire lifestyle of the people. The company initially choose the name as Amazon is the
world' largest river and it has the specialties like exotic and different. The company started in
1994 and it has the revenue generation of US$ 177.85 billion in 2017 and the equity is around
US$ 27. 700 billion in 2017, all these are quite high for Amazon as well (www.amazon.com
2018). The retail online website mechanism and formulated this as the suitable form is the key
deliverance that company provide to their customers.
The company launched an online bookselling site and delivered a chain of the bookstore
for their customers at the initial time. In 1995, the company started their journey as ‘Earth's
Biggest Bookstore' and they distributed books (Pinch 2012). The company went public in 1997
and market capitalization was approximately $430 million (Amazon.com 2018). The market
value of the company increases so as the product advancement. The process of everything store
is under process for Amazon and they have tried to accumulate all those material that a human
needs. Though this is a tough process that people can find everything in their portal the process
has started the allocation of groceries and all is the major aspect in that case (Amazon.com
2018). In 1999, the online supermarket has started and Amazon rolls back the thing for the
development of their business. Amazon Prime membership is the major aspect in that case and
customers will get extra benefit for that reason (Youtube.com 2016). In 1998, the company
expand their business into CD and DVDs. After that, they include toys and electronics in 1999

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(Amazon.com 2018). The company introduced the new logo and have the third party seller
business in 2000. In 2002, the company launched Web services and cloud platform process and
in 2003 they have expanded their business in jewellery. In 2004 they started to sell shoes and in
2005 the membership packages of Amazon prime has started. In 2006, the fresh food delivery
business of Amazon has started and it launched in Seattle. E-reader and games launched in 2007
and 2008 respectively (Youtube.com 2016). In 2010 the company launched original television
content. In 2011 and 2012 they introduced Kindle fire and Acquires Kiva respectively. The drone
delivery process has started in 2013 with the name of ‘Prime Air'. The voice-activated
information launched in 2014 and in 2017 Amazon acquire whole food market and increase their
revenue amount for $13.4 billion (Youtube.com 2016).
2. Aspects of Amazon's operations management on the increased globalization of world
trade
The management process of Amazon is quite interesting and it has a quality statement
that channelizes the operation process in case of decision-making areas. There are some
operational changes that Amazon has made in this recent years and this is the reason they are
improving their work culture and operational process for the development of the business.
The good and service design changes are the key concern that strengthen strategic
decision-making areas are based on the technology. Such technological support is important for
the company. As opined by Crane and Matten (2016), the advancement of e-commerce
management is the key understanding that helps people to have what they demand from the
online process. On the contrary Peng (2016), stated that online processes are not always
convenient for the wholesalers even for the customers, Amazon change the perception in that
case. The convenient target customers are there and they also habituated with this technology.

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Quality management is another process that penetrates the decision-making areas and
Amazon’s operational management has the power structure to evaluate this in the proper manner.
Organizational culture is very innovative for Amazon and that encourage employees as well as
customers to get involved with the process and to create new ideas for the company.
Location strategy is a kind of place emphasizing the Amazon has done and the impact of
CSR is also important in that case. The location of the warehouse and the distance of stores, in
that case, is important and that also showcases their largest possible number of customers
through their business (Laudon and Laudon 2015).
Job design for posts and the human resource process is also important in that matter. As
mentioned by Caganova et al. (2012), employees are dealing with the innovative process and the
process of hiring is also important in that case. The company's sustainability is another major
concern in that case and growth in business and resource management is another streamline
process that helps for the progressive nature of the business.
The maintenance is also important in that case as the technological asset maintenance is
the key administrative process that Amazon has started long back and those strategic
implications help the company to make some efficient decision at the crucial time. As opined by
Ungson and Wong (2014), the advancement of technology also helps in operational process and
regular direction in business helps the initial process to maintain this.
3. Amazon’s journey of e-commerce replaces the in-person shopping experience
E-commerce businesses are growing faster and it provides an opportunity for the brick-
and-mortar businesses to provide a different value proposition to the customers. Amazon is an e-
commerce giant and it aligns the business with the needs, expectations and wants of the

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customers. Buying online from the e-commerce always provides control to the customers over
the payment and the customers can observe large numbers of similar products coming with same
price brackets. Consumer psychologist Mr Philip Graves opined that consumers try to purchase
branded and quality items online as they can predict the longevity of the products. When the
customers visit the in-person stores, the customers have to give different level of effort with
money and effort both must be required. As declared by Turban et al. (2017), the customers can
visit the online stores from their electronic devices as it requires low effort. The customers
choose e-commerce sites because the customers expect transparency, right choice, high
inventory levels and ability to compare prices. On the contrary Chaffey (2015), argues that
electronic device is not all are technologically correct in all the places so the identification is
very important in that case. In e-commerce sites, the customers can view the reviews of the
customers and the customers can notice the promotional offers. In-person shopping experience
provides the advantage of the customer to interact with the salesperson face-to-face and the
customers can experience brand at the time of in-store shopping and the process of Amazon Go
make more sense in customer dealing (Youtube.com 2016). The customers can have the brand
experience while visiting the stores as the customers can see the technology, communicate with
the staffs and ambience of the stores. In-person shopping helps to motivate the customers to
create larger purchase when the staffs can demonstrate the potential add-ons on the purchase
(Youtube.com 2017). Sometimes, the customers do not find the exclusive products which are just
launched in the physical stores. Physical stores have limited space and all the items may not be
available in the stores and it may reflect poorly on the brand image of the stores (Cavallo 2017).
Amazon plays the role of a medium where the sellers and buyers both meet each other.
Smaller sellers can sell their products through Amazon and Amazon gives the platform to sell the

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items to the customers. Amazon sells the products through smaller sellers and manufacturers by
linking them with the customers. Therefore, the customers can have all types of products with
abundant numbers of availability (Youtube.com 2016). Amazon launches new products by doing
flagship projects with the large and small brands. Amazon has started the ‘Prime membership'
where the customers can get the same day delivery (Amazon.com 2018). Online purchasing
through Amazon is flexible as the customers can get the EMI facility from banks and the
customers do not have any pressure as they check the products as long they needed (Chow et al.
2017). However, e-commerce may not reach the remote places from where e-commerce
Company does not have any delivery networks. Amazon online sale channels provide exciting
opportunities to have the products on right time and Amazon gives hassle-free returns. As
published in the article by Fang et al. (2016), 42% of the online buyers return their products
because of low quality and products do not match shown in the images. Therefore, supply chain,
the technology of website and app, operation management; network and distribution need to gear
up before e-commerce replaces the in-person shopping experience.
4. Real long-term implications of the increased presence of Amazon to the Australian Retail
Industry
Australia is heading towards to make a strong e-commerce and it achieved AU$ 32
billion in the year 2017 (Sutton-Bardy et al. 2017). The annual growth rate of e-commerce is
13% and e-commerce in Australia has come up with dominate shopping experience which can
overshadow the mainstream retail. The growth of online sale in Australia has been observed in
both B2B and B2C businesses. Two global e-commerce giants Amazon and Alibaba have taken
the market and these e-commerce companies have a serious posed threat to the retail operators

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like Myer, Coles and Woolworths. In Australia, Myer has experienced declining of stock and
sales. Amazon has brought up the disruptions to the logistics as Amazon's logistics vendors are
playing a very important part in increasing the demands of the e-commerce. Industries which are
associated with the e-commerce in Australia are rising, like industrial real estate, packaging,
warehousing and online advertising. According to Sohaib and Kang (2014), e-commerce
companies have brought digital disruption and e-commerce companies also altered the
consumer-business relationship. Consumers of Australia have no control over when, how and
where they purchase the products. In addition, small companies can sell their products through
Amazon and the buyers also consider new products for purchasing and the power of purchasing
has shifted towards buyers again. Bargaining power of consumers makes alarm the vendors to
provide more service, better delivery, convenient shopping and boost the competitiveness in the
market (Youtube.com 2017). The report published by ABS, it is to note that 85% of Australians
aged above 18 access to internet and Smartphone (Gregory et al. 2017). It is quite obvious that
the people will access website and apps of Amazon.
In Australia, the customers' shopping preferences have been changed and consumers are
used to shopping through online as it saves time, the products are delivered in doorstep and the
companies are trustworthy. The local shops and retail stores are in utter danger as the pricing of
the e-commerce is lower than they offer to the customers. As stated by Scarborough (2016),
Australians mainly buy appliances, home ware, recreational and personal items, fashion and
electronic products. In addition, Australians also buy computers, accessories, meals, books and
event tickets from e-commerce sites. Australians spend the most time in the variety and
departmental stores and it is 30% of their online shopping. Amazon dominates the American
market and Amazon has come with unmatched product selection in Australia. Amazon is

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gradually increasing the Prime service and Amazon is planning to start the retail offering stores
named Marketplace. Amazon’s arrival in Australia opens up for the sellers for the wider
audiences for the additional revenue. Amazon has the USP to deliver the products within three-
hours and it is difficult in Australia as it has the sparse population and vast geography (Daniel et
al. 2015). Amazon provides drone services in America and it is not lucrative for Australia as it
has large rural areas (Youtube.com 2017). Amazon has set its distribution center near
Melbourne, Sydney and other large cities. The well-established delivery network will enable
Amazon to reach large numbers of customers which will pose a competitive threat to the retail
stores. Retails, JB Hi-Fi and Harvey Norman face a hard time competing against Amazon at this
time and retail stores will be stagnant while losing against the innovative concept of Amazon.

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