Report on Amazon's E-Business Operations and AI in Australia

This report analyzes Amazon's e-business operations in the Australian market, focusing on its utilization of Artificial Intelligence. It provides an overview of Amazon's expansion, emphasizing its adoption of AI technologies like Alexa and Amazon Echo to enhance customer experience and streamline operations. The report delves into key operational aspects, including supply chain management, location strategy, inventory management, product and service design, quality management, and scheduling. Furthermore, it explores the significance of AI in e-commerce, discussing its role in improving search results, personalizing customer experiences, and generating leads through predictive marketing. The report highlights Amazon's 'flywheel' approach to AI innovation, where advancements in one area drive improvements across the entire business, leading to increased efficiency and enhanced customer satisfaction. The report is a great resource for students and researchers alike.

Running head: E-BUSINESS
Amazon
E-Business
9/18/2019

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Executive Summary
The aim of this report is to discuss about the current operations of Amazon Australia and how
it make use of Artificial Intelligence into its operations. From the analysis, it has been
identified that, Amazon is with time expanding its business in the Australian market by
designing innovative and advanced products for its customers. The company is making use of
artificial intelligence to design different advanced products such as Alexa, Amazon Echo, etc.
The artificial intelligence is supporting e-commerce businesses in speeding up their
operations and providing better experience to the customers. The report has also discussed
about the key current operations of Amazon which highlights that supply chain management,
location strategy, inventory management, designing of products and services, quality
management, and scheduling are some of the most important operations that are handled by
the operations management department of the company to offer best services to the
customers.

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Table of Contents
Executive Summary...................................................................................................................1
Introduction................................................................................................................................3
Overview of Amazon.............................................................................................................3
Current Operations of Amazon..............................................................................................4
Artificial Intelligence.............................................................................................................6
Use of Artificial Intelligence by Amazon..............................................................................7
Conclusion..................................................................................................................................9
References................................................................................................................................11

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Introduction
E-business is also called as e-commerce, is the avenue businesses that is used to sell services
and goods through internet. The last several years have seen an eruption in the business
technology world. Businesses execute technologies for attaining competitive advantage in the
environment of business (Bordonaba-Juste, Lucia-Palacios and Polo-Redondo, 2012). E-
business enables firms to gain increased number of consumers in the wider economic market.
Businesses can vend services and goods to international and national markets by the use of a
website. In addition to this, the business can sell its services and products 24/7 because there
are number of businesses that do not close their website. This e-business feature is also used
by the companies in order to reduce the cost of the business (Oliveira and Martins, 2010).
The aim of this report is to discuss about one of the well-known online or e-business
companies that are Amazon and its current operations in the Australian market. The report is
also highlighting the importance of artificial intelligence for the company to survive in the
market. In the end, it is representing the way Amazon uses Artificial Intelligence in order to
succeed in the industry.
Overview of Amazon
Amazon is the online retailer which is based in United States and commenced its operations
in the year 1994 by selling books online. The company has been involved in huge expansion
from last several years and now it is selling all types of products from its own brand tablets to
garden tools, washing powder and many more to the diverse audience at global level. The
people of Australia are involved in the shopping with Amazon.com, but 2017 year has been
considered as the major expansion for the company in the Australian market. In addition to e-
commerce, the company also focuses on the digital streaming, artificial intelligence, and
cloud computing (Neate, 2019). The company is included in the Big Four companies of

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technology along with Google, Apple, and Facebook. Amazon is famous across the world for
its disruption of deep-rooted industries by the technological innovation and huge scale. The
company is called to be the largest e-commerce business across the world in terms of market
capitalization and revenue by offering cloud computing platform and to become the Al
assistance provider (Kantor and Streitfeld, 2015).
Current Operations of Amazon
Designing of Services and Goods – The designing of the output of the organization is
comprised in this section of the company’s operation management. Amazon is involved in
addressing this matter majorly through technology. For example, the business make use of
advanced ICT that is information and communication technologies in order to provide
ensured and convenient online retailing services as well as efficient services for the target
audience (Zhu and Furr, 2016). These types of technologies are also utilized by the business
to increase the efficiency of the e-commerce processes of Amazon.
Quality Management – The goal of the operation management of the company is to increase
the output quality for satisfying the customer’s anticipations. The approach of operations
management of the Amazon Company is comprised of constant enhancement in the efforts of
the e-commerce processes. The businesses make use of its effective organizational culture for
getting the support in making innovative idea from the personnel. For instance, Amazon
boosts the moral of the workforces to be inventive and bold in designing new business ideas
for resolving the issues and enhancing the business.
Capacity and Process Designing – The aim of the operation manager of the company is to
enhance the capacity as well as procedure of production. Under this strategic segment,
Amazon is involved in applying extensive automation to rationalize its procedures of the
business. For instance, in consideration to the online retail services of the company as the

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main output of the organization, the business automates the procedure of ordering in order to
augment the capacity to receive many concurrent orders as possible.
Location Strategy – The availability of the resources and market is included in the strategic
decision segment of the company. In the operations of Amazon, the major priority is given in
the warehouse’s strategic location or fulfilment centres (Bhasin, 2019). For instance, the
warehouse of Amazon must be placed at the location that is near to the customers.
Supply Chain Management – The main issues of the operations management in the strategic
decision section is to rationalize the supply chain of the company for supporting the objective
of the organization (Leblanc, 2019). Amazon is involved in doing so by automation and
allowing suppliers as well as buyers to get the access of its IT assets. For instance, seller gets
involve in adjusting the supply levels depending on the demand of the data accessible from
the website of the business.
Inventory Management – Under the inventory management, the operations management
concentrates on managing the best inventory ordering and holding. Amazon consider this
decision of the business by using the just in time approach in few of the segments. For
instance, under this just in time approach, few of the products that reach to the fulfilment
centres of the company are quickly shipped to meet the demand of the customer (Lee, 2018).
Besides this, for confirming the best inventory ordering and holding, the employees at
warehouse are provided with detailed training such they can increase the speed of order
fulfilment by the use of mobile computers connected to the central database and computer.
Through this, the operations management of Amazon enhances the inventory size of its
online retailing for increasing the cost while satisfying the demand of the customer.
Scheduling – The manager of the operations department addresses short-term schedules and
intermediate schedules for confirming that the resources fulfil the need of the market. Under

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this section, Amazon Company depends on the supplier’s involvement for the online
retailing. For instance, company’s suppliers can access the website of the business for
determining the level of demand and accordingly execute their delivery and shipment
schedules. Also, the operations management of the Amazon automates the schedule of the
shipping comprising its fulfilment centres that offer services of shipping to sellers for a fee.
Artificial Intelligence
In the computer science field, artificial intelligence is also known as machine intelligence, is
a kind of intelligence that is displayed by the machines, in contracts to the human’s natural
intelligence. Most of the time, the term artificial intelligence is utilized to determine the
machines that mimic “cognitive” functions that connected to the human mind like problem
solving and learning (Russell and Norvig, 2016). Artificial Intelligence is considered to be
important for the success of e-commerce like Amazon. The influence of the artificial
intelligence can be observed in different fields of the industry domains such as AI in content
marketing, AI in web design, etc. The AI application in the industry of e-commerce is yet
need to be explored. The manner artificial intelligence has reached all the aspect of life, has
resulted in changing the life. In all the fields and aspect the touch of AT can be seen. It has
been today notices that machines are providing support in different ways that is beyond
imagination (Ng, 2016). The best aspect of the executing the AI is that it helps in speeding up
the projects or tasks in a superior manner in comparison to the way human can do. Today,
machines have been advanced that support human in finishing the task that might take longer
hours as well as more efforts if humans work on it. In the e-commerce segment, the AI works
to resolve the issues of customers as well as businesses (Chen, 2017).
The most general issue that an e-commerce business like amazon face most of the time is that
the customer leaving the search in the middle on their application or website. This mostly
takes place when the consumer is not able to search for the related product results. This

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usually results in demotivating the customer to buy the product which eventually lead them to
contempt their search for what they were using the application or website (Armstrong,
Bostrom and Shulman, 2016). With the Artificial Intelligence adoption, the e-commerce
business like Amazon get the chance to provide customer a better idea to deal with this type
of issues. Processing of the natural language is the sub-division of AI that supporting in
narrowing, contextualizing and enhancing the outcomes for the online shoppers. By making
use of the power of machine learning that is again considered as another division of artificial
intelligence, applications and websites can be showcased with the elements of the visual
search (Kumar and Trakru, 2019). This majorly supports the machines in inspecting the
elements of search just like customers. This is the way machines can develop and design the
customer-centric experiences by executing the advance video and images recognition
technologies. With the help of artificial intelligence, Amazon is able to generate leads
through timely intelligence. It is conceivable to introduce predictive marketing while making
use of the AI solution for the CRM, sales, and marketing (Shubhendu and Vijay, 2013).
Amazon is using artificial intelligence as it enables to smartly scan huge data. This supports
the company in assuming the behaviour of their customer very easily by providing relevant
recommendations for every customer (Acodez, 2019). With this customization level, the
Amazon is able to gain the increased number of sales opportunities. This also helps in
delivering the personalized experience to the customer the time they shop.
Use of Artificial Intelligence by Amazon
Amazon is involved in using number of ways to improve the experience of its customers by
breaking the barriers. Amazon is considered to be a frontrunner in the innovations that
provide best customer experience because it has been successful in taken things at next
advanced level by restructuring the business around its artificial intelligence and efforts of
machine learning. Amazon is involved in using AI which is known as flywheel. A flywheel is

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a deviously simple tool that has been developed to professionally store rotational energy. This
AI operates in terms of storing the energy the time a machine is not in the form of operations
on continuous basis. In place of wasting energy by turning on and off, the flywheel helps in
maintaining the constant use of the energy and spreads it at all the sections of the machine
(Tang, 2017).
At Amazon, flywheel keeps AI innovation droning along and inspires knowledge and energy
to spread at different company areas. The Flywheel approach of Amazon means that the
innovation taking place around the machine learning in the single section of the business
increases the efforts and efficiency of other segment or teams of the company (Levy, 2018).
Those teams make use of technology in order to drive their services or products that influence
the innovation in entire business. Fundamentally, it could be said that the innovation that has
been created at one portion of Amazon can work as the catalyst for the AI and growth of
machine learning in other areas of the business. Amazon is not atoll a stranger to AI
(Amazon, 2019). The business is considered to be one of the first to make use of the
technology for driving its product recommendations. However, with the development of
Artificial Intelligence and machine learning, the flywheel approach has been today converted
as the basis to the expanding business of Amazon. It is also considered to be the central stone
at the company’s summit because it connects the organization together. This is mainly
exclusive at the time when number of businesses silo their artificial intelligence efforts and
do not incorporate it to the entire business operations.
Artificial Intelligence is not placed at just one office of the Amazon and transforming the data
at all the subdivisions of the company. The technology of machine learning is utilized by the
team of product recommendation in order to enhance its product predictions, and those
visions are then shared in the entire organization. The machine learning and artificial

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intelligence provide power to the Amazon’s three most famous products that are Amazon
recommendation engine, Alexa, and Amazon Go Store (Morgan, 2018).
The Echo by Amazon that is features with the AI bot Alexa is considered to be very famous
forays of the company into the machine learning. Amazon has experienced a tough battle in
the initial phase, particularly because it was the first business who tried its efforts at
designing a voice-powered virtual associate that can fit on a countertop (Ometrics, 2019).
The time the technology started coming together, the sub-divisions in the organization
understood that Alexa can be helpful for its product line. The very first skill for Alexa was
incorporations with the Prime Video, personalized product recommendations and Amazon
Music from the account of Amazon. There are number of companies that has grabbed the
skills of Alexa that has supported them in adding value to the life of the customer like Capital
one and Liberty Mutual. Liberty Mutual offers automatic insurance information and Capital
One enable consumers to make the product’s payment by their Amazon device.
The Amazon Go store that encourages cash less transaction took the help of the wealth of
data in order to track the trends of the shopping done by the customer. Information from the
smartphone of the customer, tracking of the cameras for shopping and not just support
Amazon Go, but can be shared with the team of machine learning for sustained growth.
Artificial Intelligence also performs a major role in the recommendation engine of Amazon
that works in generating 35% of the revenue of the company. With the use of data from the
individual customer purchases and preferences, surfing history and products that are
associated and frequently bought together, Amazon is capable to design the product’s
personalized list that consumer desire to purchase.

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Conclusion
The above report has provided the detailed information about Amazon Australia and its
current operations that helps it in generating sales and revenue. The report has also
highlighted the concept of AI and its importance for the survival of e-commerce business and
Amazon. From the above analysis, it has been identified that Amazon Australia is with time
expanding its business operations in the country with the new developments and including
additional products in its product portfolio. The current main operations that are managed in
the business are supply chain management, location strategy, inventory management,
designing of products and services, quality management, and scheduling. The analysis of the
operations of the company highlights that company gives priority to its customer and
accordingly design its system such that it can give best experience to its customers. The paper
has also discussed about the concept of artificial intelligence and its importance to Amazon.
The analysis has highlighted that artificial intelligence is also called as machine intelligence,
the intelligence displayed by the machines. AI is importance for the e-commerce business
like Amazon because it helps in speeding up the projects of the business by eliminating
barriers. Amazon is involved in using flywheel approach that is designed to store rotational
energy.

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References
Acodez (2019) Revolution Of Artificial Intelligence In E-Commerce [Online]. Available from
https://acodez.in/artificial-intelligence-ecommerce/ [Accessed 19 September 2019]
Amazon (2019) What is Artificial Intelligence [Online]. Available from
https://aws.amazon.com/machine-learning/what-is-ai/ [Accessed 19 September 2019]
Armstrong, S., Bostrom, N. and Shulman, C. (2016) Racing to the precipice: a model of
artificial intelligence development. AI & society, 31(2), pp.201-206.
Bhasin, H. (2019) Marketing mix of Amazon [Online]. Available from
https://www.marketing91.com/marketing-mix-amazon/ [Accessed 19 September 2019]
Bordonaba-Juste, V., Lucia-Palacios, L. and Polo-Redondo, Y. (2012) The influence of
organizational factors on e-business use: analysis of firm size. Marketing Intelligence &
Planning, 30(2), pp.212-229.
Chen, M.H. (2017) The analysis of model for electronic commerce - artificial intelligent.
Journal of Asian Business Strategy, 7(2), 39-43.
Kantor, J. and Streitfeld, D. (2015) Inside Amazon: Wrestling big ideas in a bruising
workplace. New York Times, 15(2015), pp.74-80.
Kumar, T., and Trakru, M. (2019) The Colossal Impact Of Artificial Intelligence In E-
Commerce: Statistics And Facts. International Research Journal of Engineering and
Technology, 6(5), 570-572.