Alexa Case Study: Exploring Issues, PEST Analysis & Solutions

This case study report delves into Amazon's Alexa, examining its rise, associated issues, and potential solutions. It begins with a synopsis of Alexa's impact on AI adoption and convenience in daily life. The report identifies data sharing and potential AI overreach as key concerns. A PEST analysis is conducted, highlighting privacy violations and governmental regulation concerns. The analysis explores customer bargaining power, environmental considerations, and the ethical implications of data collection on user privacy and child development. Solutions proposed include enhanced data protection measures, consumer education on security settings, parental controls, and platform legitimization through stakeholder engagement. The report concludes that data protection is paramount, emphasizing the importance of responsible data handling for Alexa's continued success, and recommends prioritizing security and addressing privacy concerns.

Alexa: A Case Study Report

Contents
1.0. Introduction...........................................................................................................................3
2.0. Case Synopsis.......................................................................................................................3
3.0. Issues.....................................................................................................................................4
4.0. Analysis of Issues.................................................................................................................4
5.0. Solution.................................................................................................................................6
5.1. Discussion.....................................................................................................................7
6.0. Conclusion............................................................................................................................8
References......................................................................................................................................10
Appendix........................................................................................................................................11
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1.0. Introduction
An overall smart speakers device was launched leading to technology growth and one was
launched by Amazon that was named Alexa. Amazon's many offers have influenced modern
living. The purpose of the report is to study about the case study on Alexa to understand the
issues and solutions concerning Alexa. The concept that has been used in the report is like PEST
analysis is said to be a tactic for promoting and growing a corporation that will help to know
about political, environmental, social and technological viewpoints. In this report, a case
synopsis will be discussed then issues. Further analysis will be done concerning PEST and then
discussion will be done on analysis that came out where strategic management concept that is
PEST will be examined. With the help of the PEST technique and an assessment of Amazon's
strengths and weaknesses, the case's concerns will be strategically identified and analysed, and
recommendations for mitigating measures will be made.
2.0. Case Synopsis
Considering the given case study says the introduction of Amazon's Alexa in 2014 led to a rise in
the use of voice assistants named Alexa and other artificial intelligence-based technology which
on the words of a person started working. A wide range of third-party features is now available
to users using voice command technologies. Amazon is a significant factor in making online
purchasing a habit among consumers all over the world. Online shopping has been a common
practice among consumers worldwide, as mentioned by Amazon (David 2020, p. 1). Due to the
convenience offered by service offers like musical entertainment, control of smart homes, and
daily productivity from Alexa's capacity to create reminders, millions of people worldwide are
becoming more dependent on AI, which has led to an increase in Alexa's industry penetration.
Although Alexa has proven successful, data security and cybersecurity problems persist. The
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system might be used for data collection and analytics to help store owners calibrate their offers
and make them more in line with consumer needs before those customers make purchases, which
has the potential to expand the market (Walker 2019, p. 2). While it's not accurate to discuss
Alexa primarily in terms of security concerns, it does have a good side in that it speeds up and
simplifies processes. Overall, it can be concluded that Alexa increased the adoption of artificial
intelligence to simplify daily life and the workplace.
3.0. Issues
The strategic analysis reveals problems and areas of concern that had not yet been identified, in
some situations, future occurrences must be predicted to make decisions with efficiency as one
of the major issues was data sharing which leads to sharing of personal information by Amazon. .
Operational issues limit the attainment of goals and business objectives as it is directly linked
with data sharing which affects the overall trust of the people, which stunts growth. In addition to
giving brands like Google Home and Siri a competitive advantage, the emergence of Alexa has
raised concerns about artificial intelligence (AI) eventually outpacing and superseding the human
population. considering the PEST analysis as shown in (appendix Table 1) Alexa has privacy
issues regarding data sharing which ultimately violates the government regulations and corporate
social responsibility, that is towards the public as they trust the company for the same.
4.0. Analysis of Issues
Customer bargaining power affects the adoption of speech technology, with AI-related
technologies seeing the highest consumption. As it incorporates all of the judging criteria,
strategic analysis is the idea that is seen to be crucial for evaluating the existing study on Alexa
(Miller and Cardinal 1994, p. 1650). The market competition is no longer just about maximising
profits; rather, product offerings must be accepted by consumers, with a focus on the societal
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integration of Alexa. In the modern situation in terms of Alexa, environmental considerations
must be taken into account. Quickly evolving markets, such as those in information technology
and communication, call for regular revisions to planning processes, with earlier adjustments
assuring the achievement of organisational objectives. Data collection mechanisms have a place
in the world of voice recognition and AI.
To use Alexa more creatively, data on client web usage patterns and human interactions,
including purchasing analytics were collected to better understand client preferences. Although
monitoring their clients could improve performance, it created a threat to privacy because
various loopholes were used to obtain data objectives (W.Grojean et al. 2004, p.226). Amazon
obtained a pure, complete view of its customers without any boundaries to guarantee privacy and
security by looking into their surfing histories, monitoring call logs, and recording private
conversations. Massive data gathering and analysis increase the possibility of hacking, which
compromises Alexa's security.
As a result of the advancement of AI speech technologies like Alexa, professional analysis has
brought up concerns regarding the learning skills of youths and adolescents. Because of the
development and widespread use of smart speakers like the Amazon Echo and Echo Dot, worries
have been raised regarding how well youngsters are learning. The argument focuses on the
abovementioned mechanisms instantly responding to queries, decreasing the amount of
conversation that would have taken place, for example, in the setting of teacher-led learning at
school. Children's cognitive abilities and level of curiosity can drop as a result of lessening
discourse (Department of Education, 2017, p. 1). Corporate accountability is necessary because
Amazon is in charge of a lot of data.
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There is a need to verify that access and protection regulations are obeyed because Amazon's
data centre gets millions of data entries. By avoiding self-centred strategies and promoting
organisational values between the company and its stakeholders, ethics codes can help to secure
data (Brown and Trevio 2006, p. 601). Theoretically, the firm's position as a market leader in
data accountability will increase as a result of such adherence to data policies, further securing
consumer privacy protection. Additionally, information ought to be kept private and shouldn't be
freely shared among businesses because doing so would violate customers' rights. Information
sharing might be essential in reducing crime and promoting social peace, however information
privacy should come first. Overall, it can be argued that while developing technologies might
make things simpler, it has also turned into a means of data collecting and concern for consumer
privacy protection.
5.0. Solution
Taking care of organisational issues will help to improve client acceptability and the brand's
reputation as an information steward. Government fines for breaking rules and unfavourable
legislation could follow if personal information is not achieved, which could be bad for
Amazon's future. Constant client monitoring has been considered a privacy hazard, although
there are more effective alternatives for data collection. Empirical study through observation is a
useful technique for tracking social interactions, but using online surveys to track consumers
purchasing choices, online behaviours, and other types of interactions that support Amazon's AI
innovations would be a better methodology. Consideration should be given to consumer safety as
a component of the Alexa problem process. Kaplan and Haenlein (2020, p. 40) assert that it is
challenging to strike a balance between data security and privacy and economic development.
Surveys will help the business, for strategic planning, understand consumer viewpoints.
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Along with making investments in privacy protection tools, Amazon needs to inform its
consumer base about the security safeguards in place. With explicit guidance on how to
implement two-factor verification as security measures, tutorials will help educate users
regarding how to implement and use Alexa's security settings, especially while using vocal style
shopping. Although authentication approaches have been investigated, passcode systems are
exceptionally effective at keeping users secure despite sophisticated encryption techniques
(Zviranand Haga 12016, p. 331). Hackers may use financial information for their purposes. As
part of their defence, adolescents should have exposure to cyber security. Parents will be able to
limit potentially dangerous materials for their children by integrating parental controls into
Alexa's framework, closing the cyber security gap.
5.1. Discussion
Due to technological challenges, the successful deployment of privacy safeguards is not a simple
undertaking. Future advancements in this field, particularly in the area of AI voice-activated
capabilities, carry a considerable danger. Platform legitimization, the approach adopted in this
example, is recommended by Gregory et al. (2021, p. 25) to reduce risk. In this manner,
businesses like Amazon are in charge of vindicating Alexa's trustworthiness to stakeholders. To
address consumer concerns regarding Amazon's data safeguards, a stakeholder perspective will
be crucial. Prioritizing stakeholders over stakeholders, the mutual advantage tradition seeks to
diversify the duties and rewards of the company (Kolstad 2007, p. 141). Additionally, as the
business grows, so does the demand for security and privacy solutions to handle the rising
volume of useful metrics within analytics. Consumer system utilisation will be made more
difficult by the two-factor verification and suggested security protocols, creating a problem for
management systems.
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Customers are essential to Amazon's performance as stakeholders. In general, Amazon has to
upgrade internal organisational systems before interacting with customers to boost information
and privacy management actions, which would enhance consumer information protection and
security.
The financial performance of Amazon can be improved because of stockholders so it was handed
over to them. Security concerns are crucial to and immediately impact shareholders because of
the detrimental consequences on Amazon's market dominance so security has to be improved by
Amazon. Since Amazon's records are essential to criminal investigations, the government should
look into them from a political and constitutional perspective. Amazon noted that solving
criminal cases is a consequence of data gathering. When the government views relevant data as
sources of evidence for investigations, political considerations come into play, leading
authorities to explore signal acquisition partnerships with Amazon. However, the ethical concern
is still relevant because external entities should not violate anyone's privacy. For instance, if
Amazon relies on outside parties to solve its privacy issues but instead of endeavouring to do so
internally, it may become less resilient. There is a chance that litigation against Amazon, which
constitutes a legal liability, could come from situations where customers are subjected to
incidences as an emergence of dangers realised through alliances.
6.0. Conclusion
Based on the above outcomes it can be said that data protection is a crucial concern. Security
measures have been suggested to stop third-party partners from being used data irresponsibly and
hackers from acquiring access to user information. Everyone should prioritise security because
parental controls have been implemented for kids and the number of co authentication has been
looked into as a potential privacy fix for Alexa. Due to the capacities of voice devices and
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innovative speaker systems for entertainment. It was further found that Alexa's privacy problems
are indeed a liability, and legal restrictions might be implemented. Businesses love data
applications, and Alexa will prosper if users are aware of the need of handling customer data
successfully.
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References
Brown, M. E. and Treviño, L. K. 2006, Ethical leadership: A review and future directions, The
Leadership Quarterly, Volume17, p.595–616.
David, J. 2020, PESTEL analysis of Amazon, howandwhat. Available at:
https://howandwhat.net/pestel-analysis-amazon/ (Accessed: September 9, 2022).
Department for Education 2017, Nick Gibb: the evidence in favour of teacher-led
instruction, Gov. uk. Available at: https://www.gov.uk/government/speeches/nick-gibb-the-
evidence-in-favour-of-teacher-led-instruction (Accessed: September 12, 2022).
Fosher, H. 2018, UnderstandingtheMarketingandManagementoftrailsusing PESTEL Analysis.
Master's Theses and Capstones, Issue 1183, pp.1-35.
Gregory,R., Henfridsson, O., Kaganer, E. and Kyriakou, H. 2021, The role of artificial
intelligence and data network effects for creating user value. Academy of Management Review,
Volume 46, Issue 3, pp. 534-551.
Kaplan, A. and Haenlein, M. 2020, Rulers of the world, unite! The challenges and opportunities
of artificial intelligence. Business Horizons, Volume 63 Issue 1, pp. 37-50.
Kolstad, I. 2007, Why Firms Should NotAlwaysMaximize Profits. Journal of Business Ethics,
Volume76, p.137–145.
Walker, R. 2019, Alexa: A Pandora's Box of Risks.KE1143ed.Chicago: Kellogg School of
Management. Available at: Alexa: A Pandora's Box of Risks | Emerald Insight (Accessed:
September 9, 2022).
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Appendix
PEST was used in the exploration of issues and solutions; the table below is a summary of the
findings.
Table 1: PEST analysis of Amazon's Alexa
Political Economic Social Technological
Data records as a
source of
investigative data.
Government should
make such
regulatory practices
to manage data
sharing.
As in the case of Alexa
government should
make proper
regulations to save
people from
information sharing.
 Shareholder
confidence leads to
increased market
share and economic
growth.
 Economic stability is
directly linked with
the household
income of the people
and according to
their investments, it
is also affected by
the inflation rate as a
higher inflation rate
can affect the
purchasing power of
the people.
 Alexa is used by
a diverse range
of people.
 People are
influenced by
one another, so
when they see is
using Alexa the
other person
automatically
feels that it is
good to buy and
generates a
need.
 Industry products such
as Google Home and
Siri.
 Technology is good
when used in the right
direction as Alexa is
good as it helps in
making things and works
easy and faster.
 But technology can
result in the worst if not
used in the right
direction like Alexa as
through which
information is shared,
and this can harm
people.
Fosher insights (2018)
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