E-commerce in Global Business: Amazon Case Study Analysis

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GLOBGAL IMPACT OF E-COMMERCE: AMAZON CASE
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Table of Contents
1. Introduction..................................................................................................................................2
2. Literature review..........................................................................................................................5
3. Methodology................................................................................................................................9
4. Timeline.....................................................................................................................................11
5. Reference list.............................................................................................................................13
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1. Introduction
Title: What are the advantages and disadvantages of using e-commerce in global business
aspects in respect to the Amazon case study?
Research aim and objectives
Ain
The aim of this study is to evaluate the usage of e-commerce in the present era. In addition to
this, advantages and disadvantages of using e-commerce will also be discussed using the
customers’ feedback of Amazon.
Objectives
 To evaluate the effectiveness of e-commerce
 To analyse the customers’ perception related to e-commerce
 To provide recommendation based on the findings of this study
Rationale
According to Jung and Seock (2017), people are fond of online shopping as it assists to save their
time in an appropriate manner. In this case, they try to choose branded or eminent platform, from
where, they are able to shop their required items. However, in time of expanding business,
Amazon did not face huge competition as the concept was new at that time. In addition to this,
usage of advanced technology such as digital technology was not familiar and affordable for
every people.
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Figure 1: Rate of people using internet
(Source: ons.gov.uk, 2019)
From the above-mentioned graph, it is evident that around 49% people were able to access
internet in the year of 2004. Amazon utilised this opportunity and made their platform strong in
the market. For this reason, it became the most popular e-commerce firm (ons.gov.uk, 2019). In
2017, around 90% people preferred to purchase products or services through online and they
choose old and trusted brand Amazon in this area. Therefore, the main issue is faced by the small
business organisations, who are trying to explore this business in this genre. Most of the cases,
people do not purchase from the new website or e-commerce platform and new organisations in
this sector are not able to earn profit from the market.
Using eminent platform for running e-commerce business, organisations prefer to tie up with
Amazon or eBay. It helps to increase their profit in the competitive market. However, as
commented by Gorla et al. (2017), the main motto of organisations is not only achieving profit,
but also they want to earn reputation in the merchandise market. Small business organisations are
not able to earn reputation from the market as Amazon takes product from the company, sells
and delivers it to the customers using their own brand (vox.com, 2019). The main reason of this
incident is that new organisations do not provide delivery of products early and they take around
1-2 weeks with high delivery charge. As people do not want to wait, they cancel their orders
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when it comes at late. Using the membership of Amazon Prime, people get products within 1-2
days with the benefits of free delivery charge.
Therefore, the topic is going to highlight the benefits of using e-commerce system for purchasing
products or services. In addition to this, disadvantages of e-commerce will also be elaborated
appropriately. The practical importance of this study is that small business organisations are able
to understand the requirements of customers for running their e-commerce business in a lucrative
manner.
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2. Literature review
2.1 Concept of globalisation and e-commerce business
Globalisation helps to develop the business status of the organisations by updating their selling
or production process (Pitts and Versluys, 2015). Using this concept, ventures are able to
enhance their profit in the competitive market. On the other hand, e-commerce reflects the online
transaction process for purchasing or selling products through internet (Szolnoki et al., 2016). It
helps to save time of people and they are able to purchase their required items at any time. In
most of the cases, the main benefit of using e-commerce is that customers receive home delivery
of their products. It can be stated that e-commerce business is the example of globalisation,
which increases organisational sale in an effective manner. For example, in case of Amazon,
they are the biggest e-commerce platform in the present market.
2.2 Factors that influence to run the e-commerce business
 Customer service
 Conversion rate
 Multichannel marketing
In the opinion of Falk Hagsten (2015), effective customer service boosts the e-commerce
business as customers prefer to get attention from the sellers. It is found out that e-commerce
organisations are available for 24*7 hours in order to solve queries of consumers. On the other
hand, conversion rate helps to examine the number of customers, who completes the transaction
process. If the number is 3-5%, it indicates that customers only browse the website without
purchasing. Therefore, organisations should design website using GUI (Graphical User Interface)
system for getting fruitful outcome. For example, in case of Amazon, their conversion rate
among prime members is around 74%, which highlights their stability in business
(blog.recurly.com, 2019).
2.3 Theories related to e-ecommerce
 Adoption theory
 SCOT (Social Contraction of Technology) Theory
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Figure 2: Adoption theory and SCOT theory
(Source: created by learner)
As suggested by Kurnia et al. (2015), adoption theory highlights the concept of innovation in
business especially of e-commerce so that organisations are able to earn huge profit from market.
In e-commerce business, organisations try to design their website using GUI system so that
customers are able to easily find out their required items. On the other hand, SCOT theory
reflects the importance of conversion in e-commerce business for getting prosperity (Surry and
Baker, 2016). For example, in case of Amazon, customers get the above-mentioned benefits
properly. Moreover, Amazon tries to bring improvement in the facilities of Amazon prime so
that people can receive their order within a day.
2.4 Pros and Cons of e-commerce business
Pros
 24*7 potential income
 Low financial cost for running business
 Sell internationally
 Increasing number of customers by providing the images of trendy items in an affordable
price rate (Jimenez et al., 2019)
Cons
 Site crashing issue
 Customers are not able to try it before purchasing
 They believe only eminent and trusted platform instead of using new websites for
shopping (Jimenez et al., 2019)
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Concept of E-commerce: Online
transaction for selling or purchasing
products
Concept of globalisation: Developing
business operation and sale using
advanced technology
Factors: Customer service,
Conversion rate, Multichannel
marketing
Cons: Small business does get
scope in market, Site crashing
issue
Pros of e-commerce: 24*7
potential incomes, sell
internationally, Low financial cost
Theories: Adoption theory, SCOT
(Social Contraction of Technology)
Theory
Positive impact: Increasing profit from global market
Negative impact: Huge competition
2.6 Impact in global aspect
In order to use services from e-commerce business, people prefer to use eminent platform such
as Amazon, eBay and many others. Using this service, people are able to save their time easily.
In addition to this, they are able to purchase their desired items. These help to bring positive
outcome for the business by increasing organisational profit from the global market.
On the other hand, small or new organisations in this sector are not able to establish their
business in competitive market. In this case, they need to tie up with eminent brands such as
Amazon for selling their products (Laudon and Traver, 2016). Though small business
organisations are able to enhance their profit, they cannot establish their brand in the market. It
leaves negative outcome for them.
2.7 Conceptual framework
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Figure 3: Conceptual framework
(Source: created by learner)
2.8 Gap of literature
The entire study is only focused on the e-commerce business and the benefits of the members,
who use Amazon prime. In this context, discussion has been conducted specific to the
organisation. Apart from that, all theories related to e-commerce such as system theory, all
aspects of pros and cons of suing e-commerce are not negotiated. These are the gap of the
literature.
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3. Methodology
3.1 Research approach
In order to conduct this study, qualitative and quantitative both methods will be followed. In case
of quantitative method, data are collected from the practical scenario for getting appropriate
result. On the other hand, qualitative approach helps to get view on the existing literature on the
similar concepts (Bernard, 2017). As the aim of this study is to evaluate the drawbacks and
advantages of e-commerce considering the feedback of customers, data related to the view of
customers needs to be gathered. Therefore, quantitative approach will be able to provide proper
outcome of this research. Along with analysing the theoretical concept on e-commerce and blogs
of Amazon, it is necessary to collect information of the managers of Amazon prime. This will
help to conduct the research in a prominent way.
Thus, the population will be the Amazon prime members of last three months and sample size
will 87 for following quantitative research approach. Moreover, 2 managers of Amazon prime
will be selected for conducting qualitative research.
3.2 Effective research
Various research techniques are there such as case studies, questionnaire, interviews and
modelling in order to finish this study. In context of case study techniques, a specific scenario
have been considered based on which analysis is conducted (Yin, 2017). On the other hand,
survey can be followed, where a questionnaire is developed and distributed to the participants. It
helps to collect information related to the research topic (Saunders, 2012). Interview assists the
participants to explain their view properly.
3.3 Data collection process
In this research, interview and survey method will be followed so that proper result can be found
out related to the research topic. In case of understanding the pros and cons of e-commerce in
respect to the Amazon case study, customers’ feedback is the most essential source. Therefore,
Amazon prime’s customers/members of last 3 months will be the focused group. Survey will be
conducted among them through email and it will help to know the reason for not using the
services of new organisations in this sector. In addition to this, using positivism philosophy, it
will ensure that data will be collected from present phenomenon.
Interview will be taken of 2 managers of Amazon prime for understanding their view related to
the business. In the interview process, open-ended questions are there and participants express
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and explain their view clearly (Bryman, 2017). Using this process, it can be understood their
concern for the new organisations, who not only want to develop profit with Amazon, but also
establish their brand name.
The common difficulty for collecting data through survey is that participants do not response
properly. For this reason, all members of Amazon prime will not be the sample size. On the
contrary, few times, managers do not want to cooperate with the interviewer. In addition to this,
they do not want to provide actual information for security issue.
In order to remove this issue, Data protection Act 2018 will be followed for getting proper result
(Legislation.gov.uk, 1998).
3.4 Analytical techniques
In order to analyse the data, MS Excel will be used for calculating the average of the responses.
It will help to draw the effective conclusion for this research.
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4. Timeline
Activities start date duration end date
Determining the discussion topic 09-03-19 2 11-03-19
Evaluating the business problems related to globalisation 11-03-19 2 13-03-19
Determining the main area of concern: overtake small business 13-03-19 1 14-03-19
Initiating the project by focusing on the main objectives 14-03-19 5 19-03-19
Development of WBS 19-03-19 2 21-03-19
Analysing the possible scope, risk, approach and specification
of project 21-03-19 2 23-03-19
Documenting the collected information 23-03-19 8 31-03-19
Resource analysis 31-03-19 20 20-04-19
Determining material resources 20-04-19 7 27-04-19
Submission of proposal 27-04-19 8 05-05-19
Conducting primary research 05-05-19 15 20-05-19
Preparing questionnaire 20-05-19 5 25-05-19
Delivering questionnaire to respondents 25-05-19 3 28-05-19
Conducting interview 28-05-19 8 05-06-19
Documenting gathered information 05-06-19 8 13-06-19
Information analysis 13-06-19 10 23-06-19
Implementation and evaluation 23-06-19 10 03-07-19
Evaluating whole process using performance measurement
parameter 03-07-19 5 08-07-19
Final submission of project 08-07-19 2 10-07-19
Table 1: Timeline
(Source: Created by Learner)
The activities are elaborated in the Gantt chart so that project can be completed within deadline.
It will help the researcher to keep track about the development of the project.
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