Analyzing Amazon's Use of Digital Technology: A Strategic Case Study

This case study delves into Amazon's strategic use of digital technology to enhance its business operations, customer engagement, and overall value proposition. It examines the alignment between Amazon's organizational, business, and information strategies, highlighting key technologies such as AmazonFresh, Prime Air, Fire TV, and Fire Phone. The study analyzes how these technologies contribute to improved customer service, simplified checkout processes, enhanced shopping experiences, and value-added services. Furthermore, it explores Amazon's strategies for maintaining customer connectivity through various digital channels, including social media and personalized experiences. The report also investigates how Amazon leverages digital technology to gather and process knowledge about its customers, competitors, and its own operations through data analytics and cloud computing. Ultimately, the study provides recommendations for future digital strategies to further strengthen Amazon's market position and customer loyalty, with resources and similar documents available on Desklib for students.

Running head: CASE STUDY-AMAZON
Case Study- Amazon
Name of the Student
Name of the University
Authors note

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Table of Contents
Introduction......................................................................................................................................3
Discussion........................................................................................................................................3
Use of digital technology and information systems....................................................................3
Alignment between organization, business and information strategies.......................................4
Values added through the use of digital technology in Amazon.............................................5
Use of digital technology to keep consumers connected.............................................................6
Use of digital technology to process knowledge about...............................................................9
Customers................................................................................................................................9
Competitors............................................................................................................................10
Amazon’s own operations.....................................................................................................11
Conclusion and Recommendations................................................................................................12
References......................................................................................................................................15

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Introduction
Amazon is leading ecommerce company that also provides cloud computing. Amazon is
based in Seattle, Washington in 1994. Amazon has grown from online book store to a retail
company including electronic products. It is also the largest provider of cloud services that is
PaaS and IaaS (Barrett et al. 2015). In this report, the analysis of digital technology and
information use in Amazon is done to evaluate their digital strategies for future. The digital
technology is the primary and an integral part of Amazon in shaping up its business strategy to
reach large number of people. The digital technology in this report is focused mainly on its
ability to provide value to Amazon’s products and services. The report will be further used for
providing steps to be taken for Amazon digital strategies. The purpose of this report is to analyze
the use of digital technology to add benefits and values to the services and products provided by
Amazon.
The report is structured to describe use of digital technology for business strategy,
changing of organizational strategy and ensuring continuous customer connection in Amazon.
The analysis of details of customers, competitors or Amazon itself is provided to get an
understanding of digital technology use in Amazon.
Discussion
Use of digital technology and information systems
The digital technology is rising very rapidly and it has taken center stage in every
organization from past few years. The immense growth of digital technology is driving every
sector and is expected to grow. Amazon is the leading organization that has been utilizing digital
technology and has shown growth due to the technology (Booth 2015). The further sections will
describe how digital technology has provided alignment between organizational, information and

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business strategies. The use of digital technology to keep consumers connected. The other
sections describe the use of digital technology in Amazon to collect and process understanding
about its consumers, Amazon’s operations and competitors.
Alignment between organization, business and information strategies
The development in digital technologies that are used by Amazon to strengthen its
organizational and business processes are the given as follows.
AmazonFresh- AmazonFresh is used for ordering grocery and delivering it to the customer
within one or two days at their location. This technology is used for customers residing within
the serviceable areas of Amazon where they can provide the delivery of grocery (Collins and
Halverson 2018). The delivery fresh food to customer’s location is delivered through this
service. This service was launched in 2007 and has expanded from its initial place, Seattle, to
other places, SanFransico, SanDiago, New York, Philadelphia and other places.
Amazon Prime Air- Amazon Prime Air is the coming age technology introduced by Amazon.
Amazon is going to introduce Amazon Prime Air which is known as delivery drones, unmanned
aerial vehicles in near future. This technology is going to be the major boost for Amazon’s
business strategies as it will provide quick and effective delivery of orders within 30 minutes and
without human interference (De Jong and van Dijk 2015). This technology will not involve
setting up of multiple distribution centers in each and every neighborhood. The delivery drone,
as claimed by Amazon, will provide delivery of orders to the customers without any human
interference and within 30 minutes (Montag 2017). However, delivery drones are surrounded by
controversies but Amazon assures that it will be viewed as more valuable and effective drones.
Amazon Fire TV- Amazon Fire TV is used for streaming live TV, customers can watch large
number of movies and shows that are queued and it is a well-appreciated gaming device. This

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technology is introduced by Amazon to enter into the market where its competitors such as
Apple’s TV and Google’s Roku, are booming (Deegan and Sutherland 2016). Amazon Fire TV
has garnered quick market share and it is rapidly growing.
Amazon Fire Phone- Amazon Fire Phone is a Smartphone introduced by Amazon to enter into
the market of Smartphone. The operating system of Amazon Fire Phone is Fire OS that provides
Dynamic Perspective that creates 3-D appearance and customer service for 24 hours (Dempsey
2015).
The above technologies are introduced and implemented by Amazon to achieve its goals
and objectives. Amazon has improved a lot from its initial periods and it is recognized as one of
the leading company across the world.
Values added through the use of digital technology in Amazon
The values added through use of digital technology in Amazon are done through
following ways.
Enhanced customer service- The customers are the important factors in the business growth of
Amazon. The focus of Amazon is always been to improve customer satisfaction. The customer
satisfaction helps to understand the business more briefly. The digital technology has benefitted
Amazon in various ways. The first one is improved experience of in-store and returns are free
and effortless (Dodgson et al. 2015). The second one is digital channels use has been improved
leading to higher expectation and standards for customers and retailers respectively. This shows
that technological advancement has provided growth in the business of Amazon through
improving customer services.
Easy and simplified checkout- The digital technology has disrupted the working process of
Amazon in several ways. The digital way to purchase is the most important disruption in

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Amazon. The other digital strategies that are implemented in Amazon are convenient services
like direct purchasing (print circulars), order in one click and storage of billing information is
secured (Hanelt et al. 2015). The point of purchase is improved in Amazon where new and
advanced experiences have taken place that is impacting return on investment and improved
checkouts. The checkout is the most important factor in any industry. This is because the
checkpoint helps to interact with customers and make decisions.
Improved shopping experience- The shopping experience has been improved in Amazon due to
the implementation of digital technology. The improved experiences such as interactive display
of products, dynamic personalization and rotating have driven the organization to satisfy the
demand of customers (Iansiti and Lakhani 2017). The online shopping on Amazon with
personalized store experience has contributed to provide customers satisfaction.
Value added services- The value added services offered by Amazon have improved its
organizational business. The value added services are helping Amazon to develop strong
consumer loyalty contributing sustenance in the competitive world (Irani 2015). Amazon has
utilized digital technology to provide value added services however there are still opportunities
for these services.
Use of digital technology to keep consumers connected
The use of digital technology to keep consumers connected to the organization, Amazon
has implemented various strategies. Amazon has focused primarily on customer retention at its
top priority. These strategies are described in the following points.
Digital technology serving different customer segments- The implementation of digital
technology to cater the different needs of different people has been offered by Amazon. Amazon
has not only focused on a particular segment, but it has entered into the market to cater the need

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of large customer segments (Kane et al. 2015). The customers’ demands are changing with the
growing trends and thus to satisfy their need Amazon has introduced different technologies. This
helps to interact with people and understand their choices.
Appropriate Digital channels- The appropriate digital channels have been adopted by Amazon
to connect with the customers such as social media strategy. They are keen to adopt more new
and advanced technologies however they are still the top player in the current market with digital
strategies (Kenney and Zysman 2015). They are using social media strategy to connect with the
customers directly and understand their demand and options. Amazon now wants to extend its
digital strategies to reach large section of people.
Adding value to the customer- The customer’s view and opinion are kept first on mind when
the products are launched or a digital technology are implemented. This helps to ensure that the
products and services are according to the customers demand (Donnelly 2017). The decisions are
made from the retailer side such as selling which product at what price or whether to include any
offer. Amazon is using its digital technology to match the customer’s need (Kenney and Zysman
2016). The hassle free return and replacement are also the aspects taken into account by
Amazon. However, Amazon still has opportunities to improve its customer retention by
providing more transparent business strategy to the consumers.
Measuring the trends- The trends are periodically changing and thus Amazon uses cloud
computing and big data analytics to improve its data collection to analyze the latest trend. This is
done through analyzing various platforms such a social media platforms to gather latest trends
(Keyes 2016). This will help to analyze the data and helps to sort the data that are important for
the organization to implement in its working process. This helps Amazon to understand how to
drive its business by getting an insight into the latest trends.

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Space for new technologies- Amazon has so far introduced digital technology to grow its
business and it is currently trying to adopt the coming age technologies. Amazon has entered in
the cloud computing market that is Amazon Web Services, and it has become popular in the
current market (Schor 2016). Amazon has been the most popular and widely used retail company
and it has been growing since its foundation. Amazon has introduced various digital technologies
and strategies and it also making space for new technologies to be introduced.
Online conversation- The online conversation is the implementation in Amazon that has helped
its business to grow to satisfy the need of consumers. The online conversation has helped
Amazon to listen to the customers query and provide solutions to them. This helps to understand
the customer’s requirements and opinions to make better working process (Schüll 2016). The
conversations on social media also help to make the business to reach maximum people. The
most disrupted digital technology in Amazon is social media strategies. This strategy is helping
to grow the organizations productivity and its outreaching to maximum people.
Working with third party retailers- The third party retailers’ involvement has proved a great
benefit to Amazon. This has helped to cater the needs of customers. Amazon has allowed third
party vendors to make selling on the website. This allows making its business reach to every
customer at different locations including remote areas. Amazon supports legal and authorized
third party retailers to sell on Amazon and thus customers feel more secure in buying products
from Amazon (Turkle 2017). However, there are some issues with third party retailers selling on
Amazon which should be taken into account. Thus, improving these issues through digital
strategies are also the next step for Amazon.

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Use of digital technology to process knowledge about
Customers
Digital technology helps in improving customer service and engenders the customer
loyalty. The digital transformation of Amazon website has pushed the business to mobile
shopping. Customers are the most valuable asset for any company. The company survives and
grows only when it has customers (Westerman and Bonnet 2015). With the use of E mail
customer could receive quick respond to their requests and needs and improve the customer
services. The website of Amazon has an area where customers can put their questions and
answer to it or even could seek answers from other.
Customers are not always right as they mostly get confuse of the product they like to
purchase. Amazon has a customer relationship management software with a sophisticated data-
gathering tool through which the relationship of the customer can be manage easily.
Communication has been made unify through which the user can see the customer who has left a
voice mail and send an e-mail having the same request in their account few days back
(Westerman, Bonnet and McAfee 2014). Amazon has generated loyalty for better customer
interactions.
An annual study report of Future Retail has understood the expectation of the customer
and increases a seamless shipping, delivery and returns of the order. Today Amazon offers free
and one-day shopping for the customer. Also when customer has to return the order, it provides
free online returns and exchange of item (Pearlson, Saunders and Galletta 2016). Customer
satisfaction measurement is a leading performance indicator which provides a net profit and
return on assets. If customer is satisfied then the benefits will be more for the company. The

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better customer interaction offers a good quality services and products to customer and is
responsive to the customers.
Competitors
When looking into the Amazon’s revenue model, it performs efficiently against revenue
per visitor and it is the key measures for the Amazon website.
Figure 1: Revenue per User
(Source: Bloomberg)
The figure gives a latest business model annual report. It has a great Digital Agility.
Amazon has decided to measure their program and analytically make investment. Amazon has
explained the business models from a long-term perspective and continues to make investment

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decisions with a long-term market leadership considerations rather than considering the short-
term profitability (Collins and Halverson 2018). The latest innovation in their business model is
the launch of Amazon Go store in which no checkout is required.
The user of the Amazon Go app simply enter into the store, select the product as per their
need and go without any lines and checkout. The company had a range of business model
innovation that focuses on hardware and new services such as Echo, Smartphone, TV, Kindle e-
readers, Fire Tablet, Amazon fashion, grocery delivery and Amazon Web Services (AWS) (De
Jong and van Dijk 2015). It has an annual membership program which is very common and
knows, that is the Amazon Prime which includes unlimited free shipping. It also offers
diversification to all media service that has access to unlimited instant streaming of movies and
TV episodes (Inagaki and Lewis 2018). The company now provides e-commerce services,
website development, cloud-based infrastructure and many more services.
Amazon’s own operations
Today Amazon has started its own Air Cargo Operation and acquire up to 20 767-
freighter jets while talking and negotiating with Boeing Company, through which packages will
get deliver to customer in and around U.S domestic market (Dempsey 2015). In the present date,
most of the parcels of Amazon are ship through United States Postal Service, United Parcel
Services and FedEx (Dodgson et al. 2015). The airfreight industry would seismically change
with the change in in-house logistics venture. Through e-commerce companies majority of the
air cargo activity has come up.
In-house delivery does three things for the company of Amazon. First, Amazon needs
capacity to in-source transportation logistics for the growth of the company as third-party
carriers are not able to provide enough capacity for Amazon (Irani 2015). Secondly, Amazon has

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control over the delivery chain which gives a better customer experience. Finally, Amazon sells
excess capacity with profit to others by building an infrastructure for itself.
The simple example can be taken is the Amazon Web Service which has today proved
that it is a major source of revenue. Today Amazon has set up their own storage system to save
their money (Waters and Bullock 2018). In the year 2014, there was a net sale of $25.4 billion
with a total of $100.6 billion. According to the Amazon Company, annual sales rate was growing
to 18% (Kenney and Zysman 2015). By the end of the year, Amazon had a market capitalization
of about $316 billion. With some of the shipping services and massive logistics, Amazon has
signal the fleet of aircraft and decided to take in-house for it.
According to the report of David Vernon who is an analyst at the Bernstein Research
usually track the shipping industry. The estimation provided that USPS handled 40 % volume or
150 million items of Amazon. In the meanwhile, UPS handle Amazon shipment with an
estimation of 20% - 25 % (Schüll 2016). On the other hand, FedEx had ship 15 % to 20 %of
Amazon’s annual load. These reports are according to the equity research firm. Amazon
(AMZN) in the year 2014 itself had purchased a stake of 25 % in the French company and
presently it is buying the rest. UPS still have a good relationship with Amazon (Westerman,
Bonnet and McAfee 2014). If looking back into the past two years, ColisPrive purchase is the
latest move by Amazon and ColisPrive is a French package delivery company (Kenney and
Zysman 2016). Yodel is a U.K shipping service in which Amazon has purchased a 4.2 % of the
stake.
Conclusion and Recommendations
From the report it has concluded that Amazon.com is the world finest online retailer site. As
shown in the report the competitors like e-bay and best buy are very close but could not reach