Managing Innovation in Business: A Comprehensive Amazon Audit Report

This report provides a detailed innovation audit of Amazon, examining its evolution from an online bookstore to a global e-commerce leader. It analyzes Amazon's past innovations, including 1-Click ordering, Prime service, and the third-party seller marketplace, while also assessing its current strategies such as Amazon Cloud Drive, Prime membership, and smart home devices. The report explores the e-commerce industry trends in 2016 and assesses Amazon's innovation performance and capabilities, including its expansion into new markets and services like Amazon Go and delivery drones. The report concludes with an overview of Amazon's future innovation plans, including AI-powered home robots, providing a comprehensive view of the company's innovative journey and its impact on the industry. The report covers the executive summary, introduction, industry overview, history, and current innovation performance.

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Managing Innovation in Business
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1/11/2020
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Managing Innovation in Business 1
Executive summary
The purpose of the report is to assess and audit innovation considering historical, current and
future capability for an organisational case. Amazon is one of the popular ecommerce retail
organisations working across the globe. The company has initiated the business 1995 with
one of the innovative business idea that is online bookstore. However Jeff Bezos, the founder
has made the journey of success for the business through various innovations within the
company. The company has been serving largest number of consumer goods and electronics
across the globe under one website or application. The company has made various changes in
the organisational approach, product lines, services, and structure.
Some of the innovations that can reflect past innovations of the company are 1 click, third
party seller marketplace, Zshops, prime service, introduction to audiobook, shoe shopping
site, acquiring robotics company, social video game and Sunday delivery and various more
products and services. The current scenario for the company pertaining to innovation include
amazon cloud drive, prime membership, lightening deal of the day, cashless society, smart
home devices, amazon delivery drones, amazon robots, and home robots. Some of the
important trends identified in ecommerce industry in 2016 include multi device shopping,
personalisation and conceptual purchase, customised products, product videos, and marketing
automation.
The statistics from year 2016 reflected that 53% of the global internet users were found to
made purchase from online mode that represents 1 billion users in number. Indian market has
considered be significant market for Ecommerce Company because of largely changing
trends in 2016. Amazon prime is one of the most popular service initiated by the company
gained customer interest, provided various additional benefits include two day and one day
delivery; personalised messages and email marketing; Prime video and Prime music.

Managing Innovation in Business 2
Contents
Executive summary....................................................................................................................1
Introduction................................................................................................................................3
The Organisation & Industry Overview.....................................................................................4
The Organisation and its Innovation History.............................................................................4
The Organisations existing Innovation Performance and Capabilities......................................5
The Industry in 2016..................................................................................................................9
Conclusion................................................................................................................................12
References................................................................................................................................13

Managing Innovation in Business 3
Introduction
Innovation is generation of the new idea pertaining to product, service, or process in an
organisation. Innovation is considered to be one of the most important elements in order to
sustain in the increasing competition in the market. The purpose of the report is to audit
innovation of one of the organisational. The organisation taken for the discussion in the
report is Amazon, which has being initiated as part of innovative product range. The
company initiated with offering online bookstore, which as a completely new business idea
reflecting the interest towards selecting this organisation. The key discussion for the report
includes the innovative considered by the company previously, current innovative strategies
and the future innovation requirements (Ahlin, 2014).

Managing Innovation in Business 4
The Organisation & Industry Overview
The Organisation and its Innovation History
Amazon was started in 1995 founded by Jeff Bezos as an IPO and online bookstore. The
company today is serving almost all consumer goods and electronics through ecommerce
business, which reflect the innovation and success story of the company. As per the research,
it can be said that people claims that amazon offer everything asked by the consumers.
Amazon was the first organisation with this idea and business has expanded from year to year
and being serving more than a hundred million products that is bifurcated into around 30
categories of the product (Amazon, 2018).
Innovation has always been part of the organisation, especially with the innovative leader of
the organisation that is Bezos. The company major focus is towards customer experience
which reflects customer centric strategy of the company which included rapid improvement
and technological enhancement. The transformation and growth of the company included
within starting of bookstore in with increase in second distribution network served innovative
process and networking. The company through its product development and product
innovation strategy expand into music in 1998, which included offering to trade DVD’s and
CD’s (Bottani & Galli, 2017).
In 1999, amazon introduces 1 click that is the service through amazon portal which allows the
customer to purchase a product from online portal with a click of mouse. This technological
advancement of the company provides advantage for the customer with prompt purchasing
without wasting any time. Moreover this innovative technology has also taken as patent by
the company till 2017, which makes it one of the rare resource for the company. In

Managing Innovation in Business 5
September 1999, the company initiated another innovative service that is third party seller
marketplace. The company has provided the opportunity for the retailers or the third sellers to
sell their products through amazon website. This not only provides the opportunity to the
sellers as a platform to reach out to maximum customer globally but also able to increase the
products needed by the customers. This was said to be Zshops resulted into effective strategy
for amazon to increase the volume of transactions (aboutamazon., 2018).
In November 2002, the company initiated to trade clothing and apparel as new product. For
this the company enter into partnership with clothing brands and company that is around 400
brands. This reflects the products and services of the company to go beyond books which has
included the product range with toys, electronics, and kitchenware. In 2003, major
introduction by the company included launching web hosting business. Through amazon
web services the company was able to initiate generating additional income by dominating
cloud hosting, which turns out to be the largest revenue drivers for Amazon (amazon, 2018).
In August 2004, the company enters into Chinese market that reflected a stiff competition
through some of the top electronic companies and ecommerce platforms like Alibaba. In
2005, company enters with prime service that has act as loyalty program for the customer so
as to increase the delivery speed for the customers and this turns out to be the most valuable
assets for the company. Since 2017 there have been other various innovation strategies
considered by the company like introduction to audiobook, shoe shopping site, acquiring
robotics company, social video game and Sunday delivery and various more products and
services (aboutamazon, 2018).
The Organisations existing Innovation Performance and Capabilities
The current scenario for the company pertaining to innovation and the capability of the
company to provide value creation for the customers include

Managing Innovation in Business 6
1. Amazon cloud drive
This is one of the service by company reflect current performance in innovation, this
is cloud drive by the company that has made customers able to securely store the
digital files through this service and can access wherever want using the cloud drive
on laptop or web browser. This has made increase the security for the customers to
increase the security of photo that si not to lose any memory due to physical damage
to and product like theft. Thus the customer does not have to take hard drive crash
risk (Camison & Fores, 2016).
2. Prime membership
Amazon prime is one of the most popular service initiated by the company, which has
provided various additional benefits and service to the membership. This being
increased in number of services and products associated with this program. The name
prime suggests the exclusive rewards for the prime members. Some of the most
innovative service is the fast delivery which now include two day and one day
delivery. This has gained customer interest as the customer may be looking for the
fastest delivery option. Thus the guaranteed delivery has also able the company to
target the customer who are looking to send gifts to their loved one on particular day
(amazon, 2018).
Other than this the key feature used by the company through this innovative program
is customer database. For prime members the company is being considering the data
base and likes of the customer which reflect the personalised messages and email
marketing for the company understanding the customer interest and needs (Camison
& Fores, 2016).
Prime video is another major product part of the prime membership programs to offer
exclusive videos to the customers. This may include the launched movies in various

Managing Innovation in Business 7
languages and web series that are originally created by Amazon and other series are
the ones that have been popular in various languages. This product has become
competition for Netflix (Amabile & Rigolizzo, 2015).
Prime music, this is another product that is being served by the company through
prime membership. This includes offering music in various languages and large
collection of music. Music is not being part of such applications or e commerce
business, which has been offered by Amazon prime members, making this aspect
more convenient (Bruns, 2013).
3. Lightening deal of the day – This is one of the innovative marketing strategy adopted
by amazon enhancing customer attraction and gain their attention to purchase
particular product. This includes offering particular product in lowest price for a day
or for some hours which reflect minimum period offer so as to induce customer to
make immediate purchase (Biemans, 2018).
4. Cashless society
Through innovative services and products offered by the company with not only the
online shopping mode but also through services like amazon go which include
offering the customer to go cashless for brick and mortar shopping as well. The
cashier free stores that is amazon go is one of the innovative capability that has been
reflected through this innovative store. 10 stores have been initiated by the company
that is Amazon Go around US which include staff free and cash free shopping
experience. This has been introduced with the purpose of increasing grocery shopping
experience for the customers. the coampny is looking forward to plat 3000 stores
across the globe by 2021. This reflects Omni channel trading of the company that
include using Amazon Go application prior to make shopping by linking amazon
account. The stores are structured with cameras and sensors and have been using

Managing Innovation in Business 8
learning algorithms that will let the users add products. This revolutionary technology
includes adding products in the virtual cart by picking them from the shelves (Chou &
Shao, 2016).
5. Smart home devices
The company has also introduced various smart home devices like echo, Fire Tv stick,
Alexa which reflect new product development by the company which reflect the
attraction of the customer that are mostly. This has included offering large range of
product to make voice controls possible in home, with high quality products. This has
largely contributed to the sales increase of the company. Alexa is found to be the
major contributor in sales which reflect the future capability of the company
increasing the investment in this product. This may include making Alexa as constant
companion of the customers (Coulson-Thomas, 2017).
6. Amazon delivery drones
The innovative capability of Amazon includes delivery drones which will decrease
the delivery time for the company by thirty minutes that will reflect fully operation by
the company. The company has introduced prime air logo which included airplane in
order to take control of delivering and reduce the dependence on other courier service
companies like Fed Ex. Thus the company innovative capability reflects taking full
control and completely removes the intermediating courier companies (Ding, 2018).
7. Amazon robots
The research reflected that the company has acquired a robotics company that is Kiva,
which include use of robots for the purpose of working in the warehouse for
operational work. For instance, lifting work was done by 6 ton yellow robot in
warehouses. The innovative capability through technological innovation include use
of robots for all the operations by the company so as to decreases the dependency on

Managing Innovation in Business 9
human resource and increase the efficiency of work and decreases the risk of mistakes
by human (Norman & Verganti, 2014).
8. Home robots
In 2018 the company reflected their future plans representing the innovative idea to
work upon artificial intelligence home robots as major project. This could be the
smart robot that will be powered by AI. This reflects the future capability of the
company pertaining to innovation and project development.
The Industry in 2016
E commerce industry in 2016 has represented various trends and boom in the industry the
online shopping trends has been identified among consumer preferences which have found to
be increase by then. Moreover it can be said that global retail sale through ecommerce
business had dramatically increase. The statistics from year 2016 reflected that fifty three
percent of the global internet users were found to made purchase from online mode that
represent 1 billion users in number. This reflects that the users using internet and any
technological device has majorly being involved in online shopping. Considering the example
of china, the ecommerce market represent 1 trillion dollar, this is found to be increase by then
(Du & Bstieler, 2016).
The emerging markets in 2016 for ecommerce industry were India, Middle East, and Poland.
Among these, the largest emerging ecommerce marketplace is India which statistically
represents US$14.5 billion when compared to revenue in 2015 that was $13 billion. The
Indian economic included the trend of consumer spending increases, which included
increases in sales. Indian economy has considered being important market for Ecommerce
Company due to largely changing trends in 2016 like increase in B2B ecommerce that is one
of the common category which include players like amazon business, Alibaba, and Moglix.

Managing Innovation in Business 10
In 2016, this market also identified internet penetration that is considered as biggest leap with
difference of 10 percent in this year. Net neutrality and Facebook free basics have found to be
dominating the Indian web market by increasing awareness regarding use of internet. Internet
penetration also included to rise due to comprehensive data plans and affordable smartphones
in market. The government regulations pertaining to ecommerce business is another cause for
this market to emerge in 2016. 100% FDI decision for ecommerce marketplaces reflect open
doors for foreign players to increase the business in Indian market. This also reflects increase
of business by amazon in this market (He, 2017).
Some of the important trends identified in ecommerce industry in 2016 include
1. Multi device shopping – with change in the interface the companies included to offer
customers to purchase through various devises with the use of internet like mobile
commerce that is through applications, and websites which could be done through use
of desktop.
2. Personalisation and conceptual purchase – another trend in this industry included use
of personalisation for increasing the purchase intention. This may include email
messages and marketing which included personalised messaged as per the customer
database (Jesus, 2015).
3. Customised products – the industry trends shifted to offering customised goods to the
customer, the reason being with increasing competition the industries initiate to target
the customers personally so as to use database in order to offer customisation to
consumers (aboutamazon, 2019).
4. Product videos – another trend that has been identified in 2016 among ecommerce
business is to provide product video at product page. This may include 360 degree
apprearance or video of model being using the products, especially in case of apparel.
This was to speed up consumer purchase decision (Huggins & Thompson, 2015).

Managing Innovation in Business 11
5. Marketing automation – another trend included automated messages to the customer.
a customer not associated with the brand is use to have offers like first time users and
the existing customers tends to receive notification for the current day deal (Chou &
Shao, 2016).