Globalization of Amazon: Challenges, Strategies, and IT Trends

This essay examines Amazon's globalization strategy, focusing on the challenges and strategies it has employed to become a global leader. It delves into Amazon's approach to innovation, diversification (product and business), human resources, acquisitions, and joint ventures. The essay also explores the crucial role of technology and IT companies in facilitating Amazon's global expansion, including cloud computing, AI, and machine learning. Furthermore, it highlights how Amazon utilizes its technological innovations, such as the flywheel approach, SLAM procedure, and Amazon Robotics, to enhance efficiency and customer experience. The analysis covers the company's research and development efforts and its future plans, such as drone delivery, to maintain a competitive edge in the global market.

RUNNING HEAD: GLOBALISATION
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Introduction:
The company has a global reach and is serving many other companies that also have a global
reach, as it is a cloud based system and has facial recognition system it can be used from
anywhere. The company has its branches throughout the world and has to follow the rules of all
the countries regarding their facial recognition software.
Globalization of the business has been a sheer necessity for any organization that aims at
the growth of the business. This not only helps a company to profit financially but also helps in
gaining a strong brand image. the following article draws relation with the conflict and
challenges that the company of Amazon has faced in making their cloud based project a global
one. Drawing reference from the news, the company will analyse the globalization strategy of
Amazon and how what are the trends of the IT companies for their growths. In the light of these
discussion, the essay will seek to find a solution for the US issue.
Globalization technique of Amazon:
In the modern world, E-commerce is a dynamic market where cut-throat competition is the norm.
Firms operating in this market are always adapting to new challenges. Customer satisfaction and
service are the two most important factors driving this competition.
The online book selling service was inaugurated by Amazon. The Economist in 2000 stated that
the Amazon brand name was becoming identical with e-commerce and was one of the few

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internet based companies who were recognised around the world. One of the main reasons
behind Amazon’s success is their exceptional customer service. The Amazon model states that
warehouses and pricy inventories are quickly becoming obsolete. All that is needed by a modern
day retailer is a website capable greeting and handling the customer orders. Other third parties
are tasked with stocking up the inventory.
Globalization Strategy:
Formulating and successfully implementing a business strategy is one of the most important
factors behind gaining competitive advantages over competitors. But Jeff Bezos, the founder of
Amazon realised that those are not the only factors, but the process through which competitive
positions are maintained or created are also essential behind improving business performance.
Innovation:
Innovation focused on the needs of the customer was the main strategy implemented by Amazon.
According to the arguments provided by Pearson and Robinson (2000) “some firms find it
profitable to make innovation their grand strategy”. Bezos by striving towards introducing new
technologies, in order to improve customer satisfaction and experience, put stress on continuous
innovation. The reason behind such action was the expectation of customers to receive new
products and continuous changes for good. To Bezos, innovation was the key ingredient to
achieve success against competitors. Pearson and Robinson argued that “most growth oriented
firms appreciate the need to be innovative”. Bob de Wit and Ronley stated “innovation requires
brooding, tinkering, experimentation, testing and patience, as new ideas grow and take shape”

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Diversification:
Diversification was another strategic part behind the success story of Amazon. Diversification
was implemented in both fronts, namely product diversification and business diversification.
Customers are always in the need of new products, Bezos understood this and intermittently
introduced new products in the platform. This helped Amazon gather a loyal customer base,
which has now spread in the millions across the globe. Pearson and Robinson (2000) said “firms
seeks balance in their portfolios between current business with cyclical sales and acquired
business with counter cyclical sales between high-cash/ low opportunity and low-cash/high
opportunity businesses or between debt-free and highly leveraged business”. Bezos’ business
strategy, finding growth and opportunity in new sectors like games, jewelry, toys, beauty and
health was in agreement with Pearson and Robinson’s argument. The popularity he has seen is
evidence towards his successful business diversification. According to Johnson and Scholes
“firms which diversify by building on their core business do better than those who diversify in an
unrelated way”.
Human Resource Strategy:
Human resource plays a very important role in the success of a business. According to Pearson
and Robinson (2000) “a firm’s ability to attract and hold capable employees is essential to its
success”. Over the years, Bezos focused more and more on increasing the strength of the
management team by appointing senior directors and managers. A firm’s performance has a
significant relationship business and HR strategies. Amazon has found the perfect blend among
the two, which helps in achieving high performance and thereby helping in the success of the e-
commerce site.

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Acquisitions:
Intelligent acquisitions form another piece in the puzzle of business strategy followed by Bezos.
As Pearson and Robinson (2000) said “the acquisitions of one or more similar firms eliminate
competitors and provide the acquiring firm with access to new markets”.
In accordance with Pearson and Robinson’s statement, Bezos expanded his operations in the
European markets through acquisitions of various European firms. Various web based
companies, which offered variety of services to its customer base, were acquired by Amazon.
Arguably this strategic thinking led Bezos to win in competitive situations and establish Amazon
as the top most e-commerce site in the world.
Joint Ventures:
Bezos also incorporated joint ventures in his business strategy. Bartlett et al. (2004) said
“multinationals used joint ventures extensively as a way not only to navigate through
bureaucratic processes but also to learn about new markets”. Joint ventures with already
established e-commerce and other web based services helped expand Amazon to new markets
and provided the site with unexplored customer bases. In this matter Bartlett et al. (2004) said the
executives mainly targets for growth in the markets and “they tend quite naturally to focus on the
size of the opportunity and the challenges that lie ahead”. Arguably an opportunity for growing
his business pushed Bezos towards undertaking joint ventures.
Globalization and the Role of technology and Network in growth of IT
companies:

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Globalisation has boosted the opportunity for the business organisation. With a proper strategic
plan and technology, a business organisation can grab the benefits of globalisation. The concept
of international trade has changed due to globalisation. In the globalised world, any business
organisation with adequate capital can enter virtually in any market. The authority of a business
organisation can take advantage of the emerging market, low labour cost, and other
opportunities. According to the UN Secretary-General’s 2017 report, the nature of production,
outsourcing, and mechanisation are changing and creating income inequality. For sustainable
development, the use of AI and information system can be used (UN DESA 2017).
Globalisation has created several opportunities for the IT industry. With the use of
technology, IT companies are not only ruling the international market but also supporting
international trade. To support the global business, the way the officials of the IT companies are
exploiting the technology will be discussed. IT companies are developing technologies to ensure
smooth communication throughout the world. For example, the employees and client of a
multination company can belong from throughout the world. An appropriate communication
system developed by the IT Company can help a business organisation to ensure smooth
business operation. Besides that, cloud computing is essential in the 21st century.Cloud
Computing is storing data and accessing data and programs by the internet instead of the hard
drive. It is the use of Software and Hardware to deliver a service through the internet. Cloud
Computing allows users to access data and programs by the internet throughout the world. For
example, Gmail of Google is a cloud computing service provider. The use of cloud computing
has changed the business operation style of business organisation. It can be said that IT
companies are developing this type of technological innovations to manage globalisation.
Improving cloud computing and managing the data is important for the IT Company.To deal

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with globalisation IT companies are researching in machine learning big data and Open Stack
architecture. To maintain these systems, software, IT companies have to conduct in-depth
research. So that they can offer the most beneficial product to the business organisation. It will
help the business organisation to achieve competitive advantage. To ensure smooth business
operation, the authority of business organisations are taking support from the IT companies. So it
can be said that in the 21st century, the relevance and significance of IT companies are
flourishing.
Researchers of IT companies are developing new technologies, software to ensure
smooth business operation. It will not only help the IT Company to enhance its market share but
also help other business organisation to control their business efficiently. Software innovation is
the procedure of developing useful software systems to enhance efficiency (Roseand
Furneaux2016). The aim of the IT companies is to innovate new software which can be useful to
boost efficiency. The innovation of software relies on users and experts. Software development
companies have different innovation styles. To fulfil the future need, software development
companies develop new software, technologies. So it can see that to ensure its relevance in
global market IT companies are developing and offering new software, system and technologies
like big data, cloud computing and others. It can help a business organisation to monitor closely
the business operation, ensure smooth business operation. The improvement of AI can be
beneficial for the business organisation. It will help a company to rely on the machine rather than
human beings. It can help a company to boost production, reduce production cost and other
disruptions. So it is proved that the IT companies are emphasising on the diverse area to produce
relevant software, system and technologies.

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Amazon has transformed the retail industry. By developing cloud computing in 2006, this
organisation is gaining competitive advantages. The company is in the technological segment
and is serving the other companies with its cloud based service and facial recognition software.
The company is known for having one of the best facial recognition systems and that is used by
many law enforcement people throughout the world. The company is growing in these
departments and is providing their clients with the best possible solution through technology.
To get the benefits of globalisation, this organisation has utilised its technological
innovation. The R&D of this company has done a brilliant job to help this company to gain a
competitive advantage. Besides at the authority of Amazon utilizes AI and machine learning.
The approach of Amazon towards AI is known as the flywheel. This tool is developed to boost
the efficiency of the store rotational energy. Flywheel maintains the energy and distributes the
energy to other machinery areas (Morgan 2018). The flywheel approach of this organisation is a
keystone to managing the globalisation of this organisation. This approach helps Amazon to
connect the company. In this approach, the innovation of one area's machine learning to other
teams of the Amazon. Necessary information is spread worldwide departments of Amazon
through AI. To deliver a cohesive consumer experience, the authority of this organisation uses
AI (Morgan 2018). This organisation is successful to encourage Innovation and promote growth
throughout the company.
This organisation is successful to launch cutting-edge technology to assist the employees.
By taking the help of Technologies employees of this organisation to enhance productivity.
SLAM procedure is followed by this company which contains scan, label, apply and manifest
(UK About Amazon 2020). This Revolutionary innovation is beneficial for the consumer
because it boosts the pace of packing process with accurate deliveries. Besides that, this

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organisation has launched Amazon Robotics to support the logistics of the company. So it can be
said that to ensure its smooth business operations throughout the world the organisation is
successful to invent cutting-edge technology, which can assist the employees.
The technological innovation of this organisation has to certain goals which are to
differentiate this organisation from its competitors and ensure smooth business operation as
much as possible. This organisation has started a drone delivery trial in the UK. In future, it will
help this organisation to peace up the delivery system of Amazon. At present this organisation is
one of the most powerful Technology business organisation in this world who offers software,
communication system, and devices. Successful implementation of these technological
innovations will ensure customer satisfaction, the efficiency of the employee and productivity of
the company. By taking certain innovative decisions, and successfully implementing
technologies in the business operation this company is managing its global operation. It can be
said that to deal with the impact of globalisation, the authority of Amazon relies on technological
innovation.
This organisation is successful to maintain its cloud computing for the global business.
There are three top companies in the world of cloud computing which are Amazon Web
Services, Microsoft Azure and Google cloud platform. This organisation offers a Cloud
Computing platform named Amazon Web Services, which is a combination of IaaS, PaaS and
Saas offerings. To manage its online retail business, in 2006 the authority of Amazon launched
Amazon Web service. For AWS customers, this organisation offers a highly reliable
infrastructure to its cloud computing. So it can be said that the cloud computing of Amazon is
not only beneficial for the organisation but also the AWS consumers. However, this organisation

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is facing certain problems due to the decision of Donald Trump, the president of the USA. The
President of this country is not supportive of cloud computing. It can be a problem for this
organisation. The authority of this company relies on cloud computing for its global business
operation. So it can be said that the authority of Amazon has to find a solution to manage the
disruption.
Conflict and Collaboration:
Recently the company lost a deal from the US law enforcement. This deal was finally awarded to
Microsoft, a competitor of Amazon. Trump, the current US President does not have good
relations with Jeff Bezos. This bad blood between the two results in Amazon losing out on deals
with the government of USA. In some countries, the facial recognition software used by the
company has been declared illegal, due to privacy issues. This has been another pressing issue
the company has to be dealing with right now.
Conclusion:
Though Amazon is currently a world leader in e-commerce, and have a strong foothold in the
market, they are still some threats and weaknesses that pop up from time to time.
(EfthymiosConstantinides, 2014). Riolli-saltzman and Luthan said ”e-commerce companies can
be successful if they combine future orientation with organizational adaptability and flexibility”.
Following Kippenberge’s argument strategy formulation is determined by time or circumstances,

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Amazon needs to constantly update its business strategies since no best form of business strategy
exists.
A major concern for customers buying from online retailers is trust. One way Amazon can build
up customer’s trust is to provide various means of communication like post, telephones etc.
Amazon mainly focuses on providing low cost services and products and building up a loyal
customer base, something which is in stark contradiction with business strategy of WalMart, who
strives to have as many suppliers as possible.
In order to strengthen the brand name of Amazon, as well as build up a larger loyal customer
base, they need to develop and implement improved marketing strategies. Amazon could
possibly focus on building up specialized software to help in continuing innovation.

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Rose, J. and Furneaux, B., 2016. Innovation drivers and outputs for software firms: literature
review and concept development. Advances in Software Engineering, 2016.
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<https://www.aboutamazon.co.uk/innovation/technology-at-work> [Accessed 10 April 2020].
UN DESA, 2017. New Globalization Report: Three Mega-Trends Expected To Impact Our
Future | UN DESA | United Nations Department Of Economic And Social Affairs. [online] UN
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globalization-report.html> [Accessed 10 April 2020].
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