Amazon Australia - Information System for Effective Operations

This report provides an analysis of Amazon Australia's business operations, focusing on the organizational structure, value chain, and competitive strategy. It highlights the importance of a logistics information system for enhancing productivity and effectiveness. The report examines Amazon Australia's background, issues that prompted the need for a new information system, and recommendations for improvement. It delves into Mintzberg's classification to understand Amazon's organizational form and uses Porter's value chain model to analyze primary and support activities. Furthermore, it assesses Amazon Australia's competitive strategy using Porter's competitive forces model, evaluating the bargaining power of suppliers, the threat of new entrants, the bargaining power of buyers, the threat of substitute products, and the intensity of competitive rivalry. The report concludes by emphasizing the need for operational improvements in the delivery system and suggests implementing a new logistics information system to address related issues.

Report Title
AMAZON AUSTRALIA – INFORMATION SYSTEM
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Assignment Report – 1803ICT or 7610ICT (omit one)
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Executive Summary
Conducting an analysis of the business operations for Amazon Australia there
has been the identification of the different activities and issues that are
important to be resolved by the company for better productivity and
effectiveness. The assignment focuses on discussing the organizational form
that is adopted by the company in the context of managing different areas of
the business. The value chain analysis based on porter’s value chain model is
also initiated in regards of understanding the implication of the primary as
well as support activities. The competitive strategy of the company is also
enlightened for understanding its impact on the company and its business in
the effective manner. The logistics information system has been considered
the new aspect that is to be included in the company. The use of logistic
information system has been increasing on a higher scale, leading to the
company to adapt to the system for better enhancement of their productivity
and development.
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1. Introduction
The assignment highlights the factors associated with the information system for the
stakeholders of Amazon Australia. Human activity system is considered to be an essential
factor of any organization. The focus of the assignment is to analyse the existing human
activity system within Amazon Australia. The issues that are related with the system will
determine and measures will be suggested with the purpose of improving the performance of
the company in an effective manner. The assignment focuses on analysing the areas related to
the company with the application of tools, techniques as well as models. This will be
beneficial in order to understand the aspects related to the areas and help to understand the
implications as well.
2. Part 1: analysis of the business of Amazon Australia
2.1 Overview of Amazon Australia
Amazon made its way to Australia in the month of December 2017. Amazon has launched its
operation in Melbourne. The main purpose of the company in terms of this expansion is to
globalize and gain a foothold in regards of the international marketplace. Until Amazon was
launched in Australia, the seller used to send the orders offshore for shipping as well as
packaging. This was due to the reason that AU warehouses did exist in the area to serve the
seller. Amazon after ending months of speculation launched the online retail offering in
Australia. The company offers in the current phase around 23 categories that includes
clothing, accessories, books, electronics, baby products etc. in terms of strategy Amazon is
considered tight-lipped in regards of the Australian marketplace. The company allows other
businesses to sell through their website (Babones, 2017). The strategy of the company is not
to create any kind of pressure on local online operations that includes Kogan, Ebay, Myer,
David Jones etc. the strategy of Amazon Australia is to focus o the customer experience. The
company also adopted the strategy of rewarding the sellers that provides better deal to the
consumers irrespective of the size of the firm. In regards of operations, the company is
considered to be emphasized on the factors associated with the key principles that include
long-term policies as well as focusing on customers.
1.1 New Information System and its benefits
The new information system selected for Amazon Australia is logistic information
technology. The logistic information system is considered to be part of the management
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system. Thos system is effective in the context of managing, controlling as well as measuring
the logistics activities. The logistic information system is essential in regards of achieving
logistic effectiveness and efficiency. The benefits of implementing the logistics information
system in the Amazon Australia are
 One of the benefit is that the functional operations helps in pursuing customer
satisfaction at the lowest total cost
 It will help the company to be more competitive with the help of better tactical as
well as strategic decision related to the logistic information system
 The information system helps in the context of planning and controlling the activities
of logistics
 It is beneficial for promoting the systems that are linked with the operations of the
firms that includes manufacturing and distributing the products
1.2 Amazon Australia background and issues that instigated the new information
system
The Amazon Australia was established in Australia in the year 2017. Amazon as an
organization with the aim of expanding its business started its operation in Australia on
December 2017. The organization in the current context is suffering from issues that are
related to delivery system. In that standpoint the company is planning to implement a logistic
information system.
1.3 Recommendations
Amazon Australia needs to emphasis on the operational activities that are related to the
delivery system. On that context the company needs to emphasis on developing a new
logistic information system that will help in dealing with the issues related to delivery
system. The organization needs to provide various delivery options that include the feature of
Prime provided by the parent company.
1.4Definition of key terms
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Human activity system – this system expresses some of the purposeful human activity. In this
system the design approach is emphasized than the system improvement approach.
Logistic automation – the logistics automation is considered to be the application of the
computer software with the aim of improving the efficiency of logistics operations in the
effective way.
2. Part 1: analysis of the business of Amazon Australia
2.2 Overview of Amazon Australia
Amazon made its way to Australia in the month of December 2017. Amazon has launched its
operation in Melbourne. The main purpose of the company in terms of this expansion is to
globalize and gain a foothold in regards of the international marketplace. Until Amazon was
launched in Australia, the seller used to send the orders offshore for shipping as well as
packaging. This was due to the reason that AU warehouses did exist in the area to serve the
seller. Amazon after ending months of speculation launched the online retail offering in
Australia. The company offers in the current phase around 23 categories that includes
clothing, accessories, books, electronics, baby products etc. in terms of strategy Amazon is
considered tight-lipped in regards of the Australian marketplace. The company allows other
businesses to sell through their website (Babones, 2017). The strategy of the company is not
to create any kind of pressure on local online operations that includes Kogan, Ebay, Myer,
David Jones etc. the strategy of Amazon Australia is to focus o the customer experience. The
company also adopted the strategy of rewarding the sellers that provides better deal to the
consumers irrespective of the size of the firm. In regards of operations, the company is
considered to be emphasized on the factors associated with the key principles that include
long-term policies as well as focusing on customers.
2.2 Organizational form of Amazon Australia using Mintzberg’s classification
According to Mintzberg’s classification, the organizational form that is adopted by Amazon
is division form. The middle line is considered the key part of the divisionalized form. The
company in this context uses the standardization of output that is related to prime
coordinating mechanism. According to Mintzberg’s classification, Amazon employs limited
decentralization. In these terms, the process of decision-making is considered to be
decentralized at the divisional level. However, the divisions are considered to be centralized
and focus to resemble the machine bureaucracy. In the context of Amazon, the techno
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structure is considered located at the corporate headquarters with the prospect of providing
services to all the division in the organizational structure. This form is determined to be
suitable for Amazon as the company has different product lines as well as business units.
This form is also considered beneficial as the divisional structure allows the management of
the company in terms of maintaining accountability and more control than it is relevant in a
machine structure (Janićijević, 2017). Another advantage that is determined through the
application of this form is that the process of the decentralization decision making in the
organization helps in the context of focusing on the bigger picture related to the strategic
plans.
2.3 Value chain of Amazon Australia using Porter’s value chain model
Value chain analysis is determined as the analytical framework that supports Amazon in
terms of identifying the business activities. The business activities help the company in the
context of creating value as well as competitive advantage to the business. The essence that is
related to the Amazon value chain analysis includes the primary activities as well as support
activities. According to Porter’s value chain model the primary activities of the Amazon
Australia are inbound logistics, operations, outbound logistics, marketing describe the
primary and support activities of Amazon Australia and sales as well as service (Albers et al.
2016). In regards of the support activities are related to the given company or firm
infrastructure, technology development, human resource as well as procurement. In context
of inbound logistics, the company is considered to have efficient logistics infrastructure that
provides competitive advantage to Amazon Australia. In terms of operations, the organization
is analysed to be divided into three segments. The three segments are North America,
International as well as Amazon Web services. Another primary activity is outbound logistics
that are fulfilment centres, co-sourced and outsourced arrangements, digital delivery and
physical stores (Koc & Bozdag, 2017). In context of Amazon marketing and sales, the market
expense for Australia is considered to be increasing. This also includes the cost that is related
to advertising as well as promotional activities of the company.
It is evaluated through the analysis that marketing and sales is the major sources of value in
Amazon Australia in terms of operations. The values that are obtained are considered to be
generated through the excessive marketing investments. Amazon Australia in regards of
generation of value considers the customer service as the major source that includes e-
commerce as well as cloud computing. The company in this context determines to be a
customer-centric organization. In terms of the support activities, the company focuses on firm
infrastructure that relates to the business strategy, marketing policy as well as market
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strategy. The company also emphasizes on human resource management and focuses on staff
recruitment and trimming (Sivula & Kantola, 2014). In regards of technological
development, the company emphasizes on database marketing, transaction process system as
well as internet sales. The emphasis on the support activities helps Amazon Australia
activities to increase the value creation.
Figure 1: Primary activities of value chain model
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Operations
Service
Inbound
logistics
Outbound
logistics
Sales and
marketing

Figure 2 Porter’s Value Chain
2.4 The competitive strategy of Amazon Australia using Porter’s competitive forces
The emphasis of this section of the assignment is to analyse the competitive strategy of
Amazon Australia with the incorporation of Porter’s competitive forces model. The analytical
model is considered beneficial for analysing the level of competition as well as the forces that
are affecting the competition in the industry. The following are the five forces in terms of the
porter’s competitive forces discussed below -
Bargaining power of suppliers - The bargaining power of the suppliers of Amazon
Australia is considered low to medium. This is because the organization is considered to have
upper hand when it is related to supply chain. The supplier numbers that are associated with
the organization is huge in number. The suppliers that are associated with the company are
bound to do the business in terms of the Amazon Australia (E. Dobbs, 2014). The core areas
that are focused by the organization is related to health and safety in production, rights
associated with legal wages and benefits, appropriate working hours, fair and ethical
treatment as well as prevention of child labour.
Bargaining power of buyers - the bargaining power of Amazon Australia is considered
high. This is because the organization focuses on the factors associated with customer
satisfaction as well as product quality (Dälken, 2014). Another reason is that the company
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gives importance on customer retention and this makes the bargaining poem of the customer
high.
Threat of substitute products - the threats that are related with the substitute products are
considered to be high (Dälken, 2014). This is because other brands have also entered the
online retail and the customers have the option of buying from physical retailers as well. He
customers in this context have option of switching to other online platforms as well.
Threat of new entrants - the threats related to the new entrants is determined to be low. The
growth in the technology has reduced the challenges that are associated with entry of new
companies in the e-retail industry (E. Dobbs, 2014). However, establishing a business
channel like Amazon Australia is considered difficult.
Rivalry in the industry - the level related to rivalry in the industry is analysed to be high.
This is because the market has number of players and there is intense competition. This is
because some big names of e-retail industry have entered into the market. This will increase
the level of competition for Amazon.
Figure 3: Porter’s Five Competitive Forces
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3. Answer to Part 2: Aspects of an existing human activity system within Amazon
Australia
3.1 Human activity system within Amazon Australia and identification of the issues
In the context of human activity system within Amazon Australia the stakeholders has
identified some issue that the organization is suffering. The company has potential
complication that is related with the delivery system. Amazon Australia is required to enable
fast delivery that needs fulfilment centres in two major cities of the country. In addition, two
internet issues related to it is that fitting it out as well as stocking it with products (Preece et
al. 2015). The services that involve the fast delivery are determined to be expensive in
comparison to other countries. The stakeholders associated with this issue are the customers
and their roles are considered external.
Stakeholders Roles
Internal stakeholder roles
External stakeholder roles
The role of the internal stakeholder that
includes the board of directors has the
responsibility of making decisions that are
related with acquisition, liquidation,
oversight as well as key position hiring.
The external stakeholders have the role of
reflecting the community, government or
environmental concerns as well.
3.3 Identification of the areas in which the existing human activity is not successful
using the DeLone & McLean model
3.4.1 Functionality - The areas in which the existing human system activities are not
successful are related to the delivery system as well as storing system of the products.
According to the DeLone & McLean model, the success of the information system is
considered to be based on the coherent body of knowledge.
3.4.2 Usability- This particular model analyses the human activity was not successful in
related with the delivery services (Dembla et al, 2015). In this context, the information
system is also lacking the proper aspects. In regards pg the model it is determined that system
quality is applied to measure the technical success.
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3.4.3 Utility - The implementation of the model in analysing the areas that are not obtaining
successful result is because of the failure in implementation of the proper information system
in the company.
3.4 Describing the measures of success for the existing human activity system
The measures of success that are related with the existing human activity system are
segregated into factors that are efficacy, efficiency as well as effectiveness. The efficacy is a
measure that is applied to achieve the transformation that is intended for the human activity
system. The company needs to identify the areas in which transformation is required to be
applied that is the delivery system related and the information system of the company. The
extent to which the company is able to obtain the transformation with the less use of
resources and it emphasizes on the factors associated with input and output (Hsu et al, 2014).
The effectiveness is considered a measure in regards of which the system contributes with the
purpose of obtaining a higher-level system in context of Amazon Australia the organization
needs to emphasis on effectiveness as major of success for dealing with issues related to
delivery system.
3. Answer to Part 3: a new information system to support the HAS, and help Amazon
Australia
The company Amazon Australia has been facing certain issue is the human activity system
that is being used by the company for better functioning of the company’s operations and the
other activists will be helping the company to reach its goal. This section is based on the
understanding of the information system that will be helping the company to mitigate the
current issue present in the company.
4. 4.1 Part 3- question a: Identify a new information system which can clearly add value
to the business of Amazon Australia
The company Amazon Australia is currently facing different issues that have been restricting
the company to gain higher productivity. It has been analysed that the company is undergoing
issue in terms of the delivery or the logistic system of the company. Considering the different
activities that are being carried out in the company, it has been noted that the productivity
that is to be achieved from the logistics operations of the company so not high (Grabara et al,
2014). The cost of operating the logistics of the company is relatively high in comparison to
the other operations carried out in the company. In order to mitigate such issues, it is
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important for the company to ensure implement information system in their logistics
department so that the company is being able to maintain the delivery system ensuring that
the products that are being dispatched to be delivered to the customers are carried out
effectively.
The logistic information system is a part of the management information system whose
application in the company Amazon Australia will help the company to maintain the activity
of carrying out the delivery of the services and the products to the customers or the respective
receivers effectively. The use of the logistics information system will involve the use of the
logistics automation system that will help the company in various ways. It will also allow the
company to maintain the different other processes in the logistic department of the company
which further will improve the delivery operation of the company (Timm et al, 2016). The
activity that will be carried out by the logistic information system is a primary activity. This
is because of the fact that the logistic department of the company ensures that the company is
being able to maintain the stocks in the warehouse of the company. This will allow the faster
packaging of the products due to the availability of the products in the company and hence
the faster delivery of the products in their original state.
The logistics information system will be requiring the different stakeholders who will be
investing on the system to be implemented in the company. The different stakeholders who
are essential to be present for the implementation of the system are the vendors who will be
providing the different software system to be implemented. The project manager who will be
responsible to take care of the entire project in terms of the monitoring of activities and
ensuring that they are being carried out effectively (Qu et al, 2016). The employees in the
company who will be using the company; the developer of the system in order to implement
the entire system in the company's existing information systems and the investors of the
company to provide the capital for the investment to make.
5. 4.2 Part 3- question b: Describe the data, information, and types of knowledge that the
new IS can produce. Describe how this knowledge can inform decision making, and by
whom within the HAS?
The new information system, which is the logistic information system, will be providing the
company Amazon Australia with different benefits, which will be helping the company to
focus on their logistic functions and ensure that the company is being able to maintain their
delivery activity without any issues in future. Understanding the benefits that will be gained
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by the use of the logistics automation or the logistic information system will provide insight
on the different knowledge, data, and the information that will be produced by the informant
system. Some of the benefits are as follows:
 There will be reduction in the error that is being caused during the recording of the
different information in terms of the address of the customer, the number of item that
are have been ordered, the amount of stock that is currently available in the
warehouse and other information will be easily available with validity in the
information that is being maintained (Bajdor & Grabara, 2014)
 The cost of the transportation that is to be given by the company to the transportation
company is will be prices accordingly and no fraud can be caused to the company.
This is because of the fact that the logistic information system will include the
transportation mode choice that will allow the company to know the current carrier
rate effectively
 The customer service will increase on a higher rate. It has been analysed that the
delivery of the product will be carried out in an effective manner, as there will
efforts given in providing the customers with the correct item at the correct
location in the correct time. This will further help the company to maintain the
reputation of the company by maintaining the delivery service of the company
(Liu et al, 2016).
Stakeholders Roles
 Developer
 Project manager
 Developing the system in the
company
 Monitoring and approving the system
6. 4.4 Part 3- question d: Classify the new
information system within Amazon
Australia as either: front-end, back-end,
customer- facing, or supplier-facing; and
explain why
The new information systems that is to be
implemented in the company Amazon
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Australia is the logistic information system. The system is entirely a back-end process model
and a customer-facing model. This is because of the fact that the activity that are carried out
in the logistic department of any organization are considered to be back-end activity as it
involves the crucial details of the company like the stocks, the raw materials required and
many others.
It has been noted that the system is also a customer facing systems the outcome that will be
given by the system is towards the service for the customers (Song et al, 2017). This in turn
will help the company to gain the trust of the customers effectively by providing them with
the products and the services on time and at the right condition. The presence of the system
will ensure that the back-end activities are being carried out effectively in terms of
maintaining the records for the current availability of the company in terms of the product
range that are being served by the company to its customers.
7. 4.5 Part 3- question e: Describe dimensions of impact of your proposed new
information system within Amazon Australia for all stakeholders; identify intended and
positive effects and describe the proposed impact of the new system on the organization,
groups, and individuals
The new system that has been proposed for the company to implement in terms of reducing
the issue of the delivery activity of the products and the series in the company will be serving
the company in both positive and negative manner. It has been noted that the stakeholders
due to their inability to understand the system effectively might not approve the logistic
information system that will be implemented in the company (Christopher, 2017). This might
not allow the company to maintain the system in the company. Some of the affects are:
4.5.1 Intended Effects:
There is the need to conduct effective training of the employees in order to ensure that they
are being able to use the system. This will further increase the cost to be spent on the new
information system.
4.5.2 Positive Effects:
Despite of the different negative impact that might be caused to the company, there are
certain long-term positive impacts on the company due to the use of the logistic information
system. The company will be highly benefited, as it will ease down the work of the
employees in the logistic department of the company. There will be reduction in the time
usage. The company will be gaining correct records of data and information at any point of
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time without any further error being caused during the delivery of the services and products
to the customers.
4.5.3 Negative Effects:
There can be breakdown of the system due to low internet speed or physical system
breakdown, which might lead to ineffective recording of the different items in the logistics
department.
8. 4.6 Part 3- question f: For the proposed new information system, define success
measures for efficiency, efficacy, and effectiveness; and briefly describe each success
measure proposed
In order to understand the affectivity of the new information system that is to be implemented
in the company, which is the logistic information system, the factors that will allow the
understanding of the effectiveness of the system are the metrics that are to be used
(Schönsleben, 2016). These metrics focus on the measurement of the supply chain efficiency
in the company Amazon Australia. Some of the metrics that are important to be checked are
given as follows:
4.6.1 Efficacy:
Accurate order fulfilment: the use of the logistic system will help the company to keep a
record of the orders accurately without any manual intervention in the recording. Thus, the
accurate order being fulfilled will be a sign of affectivity of the system.
4.6.2 Efficiency:
Accurate tracking of the trailers: it is important for the customers to maintain a track of the
products that are to be shipped to them. It is also important for the company to maintain the
track of the items that has been shipped from the warehouse and know about the whereabouts
of the item while being delivered to the customers.
4.6.3 Effectiveness:
Damaged products: the use of the system will help the company to maintain a track of the
items that has arrived damage in the warehouse and are not meant to be packed for delivery
to the customers. The company will be able to take immediate action in order to ensure that
the risks of such kind are being entertained in future (Nettsträter et al, 2015).
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9. Answer to Part 4: Synthesize the outcomes
10. 5.1 Part 4- question a: Synthesize the outcome of parts 1, 2, and 3 into a report
containing a series of recommendations to Amazon Australia’s management.
Considering the discussion that has been carried out in the previous sections, it has been
analyzed that the company Amazon Australia has been implementing different strategies in
order to increase the value of production of the company in the country. However, certain
flaws of the company restricted it to carry out such process effectively. It has been analyzed
that the company needs to improve the delivery system so that the customer trust is being
maintained. The implementation of the logistic information system will be helping the
company to gain the effective results in terms of achieving the profit margin of the company,
and increasing the customer’s base of the company (Myerson, 2015).
11. 5.2 Part 4- question b: You need to devise recommendations as to how it can make use
of a new information system in order to provide better service to customers; and to
ensure success of the information system by taking steps to avoid system failure.
In order to ensure that the new information system that is to be maintained by the company,
there is the need for the company to conduct the following activities and ensure that the
services to be given to the customers are effective:
 To ensure that the employees are being trained effectively in terms of allowing them
to understand the ways of using the system
 To maintain an effective record of the orders to be shipped and packaged and the
number of orders the customers along with their details have placed
 Alignment of the logistic information system with the information system of the
organisation.
12. Conclusion
Thus, it is to be concluded that the company Amazon Australia has been able to maintain
different stages in the company, which has assured the current success of the company.
However, the company is unable to maintain the effectiveness in certain operation like the
delivery system of a company, which falls under the logistic department of the company. The
use of the logistics information system will be helping the company to gain the required
effectiveness.
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