ABS207 Big Data: Examining Amazon's Data-Driven Business Value

This report provides an overview of Amazon's big data strategy, highlighting how the company leverages data for decision-making and value creation. It begins by describing Amazon's business model, key products, and target segments, followed by an analysis of the company's current data state, including revenue, employee numbers, and data collection methods. The report identifies key problems and decisions that Amazon addresses through data-driven approaches, such as predicting market trends and ensuring consistent results. It also discusses unanswered questions, such as optimizing pricing strategies and improving delivery times. Furthermore, the report examines Amazon's focus on customer satisfaction, long-term goals, and corporate culture, and it details the types and sources of data used by the company, including customer data, IT data, and internal financial data. The report concludes by emphasizing the value of data in identifying market opportunities and driving business performance. Desklib offers more solved assignments and resources for students.

BIG DATA AND VALUE
SUPPORT

Organisation Description
Big data refers to the large volume and set of complex of data which may be structured or
unstructured both that overwhelm the business on a day to day basis. It doesn’t matter how much
amount of data do business have but what matters is how businesses make use of it in terms of
effectively analysis in order to gain useful insights which results in good decision making and
excellent strategic moves of the business. In the present report based on such big data collection
initiative the selected organisation is Amazon who have benefitted themselves with this
techniques of handling data of complex nature Cabrera-Sánchez & Villarejo-Ramos (2020).
Amazon is a multinational company in technological sector particularly focusing on digital
streaming, artificial intelligence, cloud computing and the most important one is e – commerce.
It among the top five largest company of USA. The founder of the company is Jeff Bezos who
founded the company is 1994 in Bellevue, Washington, United States. The major business of the
company lies in selling products online of various manufacturers around the world. The sector of
the company in which it operates is technology sector which includes cloud computing, e-
commerce and artificial intelligence. The main source of the company’s revenue is web services,
retail distribution and subscriptions and among these retail is considered to be the primary source
of the company through both online and offline channels. The largest source of operating profit
and growth potential of the company is AWS (Amazon Web Services).
The key products and services of the company includes Amazon Prime, Amazon Fresh,
Alexa, Amazon Web Services, Appstore, Amazon Drive, etc. The target segment of Amazon
comprises of multiple demographic factors such as all age group, both gender male and female,
areas include both rural and urban with a geographical reach in over more 100 countries. Almost
all classes of the society Amazon seeks to target due to having widest range of products at
competitive prices.
Current Data State of Amazon
a.
The company’s service and e-commerce sales revenue was 386.06 US billion dollars which was
rise from 280.52 US billion dollars. Out of this, the biggest segment in terms of operations is
North America which has a net sales of over 236 billion dollars Amazon - Statistics & Facts,
(2021).
The retail platform taking place online has generated an income of 21.33 Billion US dollars. The
number of employees hired by Amazon for both part and full time is 1298000. The shipping cost
of the company reported as 61.1 billion dollars and its marketing expenditure around the world
amounted to 22 billion dollars. The global brand value of this giant stood at 683.85 billion
dollars. The global visitor’s traffic from both mobile and computers amounted to 2.7 billion
dollars. Total number of Amazon prime users across the US are amounted to 153 million users.
Amazon seeks to collect data from those users who navigate through the sites which gives much
information on time spent and browsing on different pages. Many external data sets are used
such as census data in order to gather information on demographics. Product recommendation at

Amazon takes place through big data which showcases what customers has bought in the past.
Amazon has specifically established data centres in various places such as Dublin, Ireland and
Germany to store their and use data from. The data then summarized and presented with the
application of best statistical techniques which provides aids in making informed decisions.
b.
There are many theories, models and concepts that applied while collecting, storing and using
data in Amazon. Like the one is conceptual data model which facilitate colleting logical data and
presenting it in a manner that clarifies many concepts of the person or body using it. Many
problems can be identified at earlier hand and accordingly its solutions can found out through
decision making in a data driven environment Ardito & et.al., (2019). Also, the concept of
relational data models applied to the big data available which makes such a complex set of data a
very easy to understand in terms of how it relates to various periods and what possible benefits
the company has obtained in the present. Also, it aids in highlighting any problem creating areas
and accordingly resolving it through identifying it at an earlier hand.
Key Problems or decisions
a.
1. Amazon ensures a business achieves consistent results using key data within all major
decision making processes. There can be a loss of important individuals in the organisation and
there can be a shift in market trends but at the organisations which are data driven, key decisions
are not impacted Zharova & Elin (2017).
Due to the established and air tight decision making process, the person in charge of the process
doesn’t matter because of the similarity of the data they use and also following their process
which is the same as their predecessors.
2. Amazon is able to predict changing market trends and respond accordingly. This gives it the
edge over the competition. Amazon can be the first organisation to spot a new market for a new
or even an old product. Using data effectively makes it an easier for an organisation to
understand what is about to come and respond quickly Dagilienė & Klovienė (2019). This saves
an organisation from making business decisions in the dark and based on insufficient and
incomplete information.
The moment the data is acquired, it can be analysed and on their basis decisions can be made.
This makes and organisation very agile quick to adapt in a dynamic environment than the
organisations doing business as usual.
b.
In the above discussion the two main theories of decision making has been highlighted that is
prescriptive and normative decision theory. The prescriptive decision theory states that data

driven decision making is helpful for the decision makers in the events of uncertain decision
making framework. Like if the topline or experts in the field with abundant knowledge if left the
organisation, then the data so collected and stored by the company like Amazon can be used
directly by the new comers as it facilitates with the data which provide good deal of knowledge
regarding the company’s operations Lee (2018). According to normative theory of decision
making which states that with a given set of values, there will be good decisions that can be
made with the guidance so provided by the data. So, information related to market demand and
forecasting can be done through data driven environment created by Amazon.
Unanswered questions
a.
There are many problems which acts as question mark on Amazon that has not yet been resolved
with the use of big data technology, such as the following:
1. There is a wide data available through big data regarding the pricing of competitors which
indicates that there is a price wars in the market, but the problem of what price should Amazon
choose for its wide range of product remain unanswered and on this the company has to work
upon in order to retain existing and attract new customers Witkowski (2017). It requires high end
analytic and business intelligence applications to overcome the issue of setting right and highly
competitive price.
2. The another question mark on the company is the time taken for making products available in
the hands of the customers, as in the modern and technology driven era, the customer expects
urgent delivery in terms of as they order the next moment they need the product in their hands.
This question has not yet been answered by the company but requires an immediate actions and
the same has not been resolved through big data technique.
b.
Amazon focuses on customer satisfaction rather than competitors:
Amazon gives very high importance to customer satisfaction and try their best to narrow in on
eliminating the risk of unsatisfied customers. Amazon is always one step ahead of others when it
comes to maintaining customer satisfaction.
Amazon stresses on long term rather than short term:
The best example of long term focus we can see these days is Amazon Web Services (AWS),
how it was once started with startups and now has expanded to millions Urbinati & et.al., (2019).
Many high as well as low profile companies uses AWS such as Pinterest, Johnson and Johnson,
McDonald's and so on.
Focusing on corporate culture for value based offering:
Amazon focuses on building better culture within the whole organisation which in turn helpful
for the company in value based offering. Therefore, the company can be able to attract more

customers through the retention of talent and skilful workforce which is the outcome of better
corporate culture.
Value of Data
a.
With the help of big data collection and analysis only it has been identified that there is a price
wars prevailing in the market in which Amazon is operating. The collection of data on
competitors allows for getting information on competitor’s pricing and moves. The priorities set
so set by Amazon such as being customer-driven, focusing on long term goal, and corporate
culture for higher value to the customers is considered as the best way to identify opportunities in
the market in terms of what actually customers are desiring rather than wasting efforts on any
other less important things Raguseo (2018). Data collected by the Amazon established data
centres collect information from of customers when these customers browse company’s website
and then present them in an understandable way which in turn allows company to become
customer oriented by offering them higher value through their offerings.
Big data facilitates organisation like Amazon to know more about the business and thus this
knowledge helps in effective decision making and higher or improved performance within the
organisation. Data created value for the company and in turn this leads to value creation for the
customers.
Data types and sources
a.
The data that Amazon will be using for better future and success in the market can be
categorized into three types, such as the following:
Customer data: Amazon undertakes to collect the data of its customer when they are browsing
through their site. The company collects data such as, what their customers are buying, what
customers are looking at, the shipping address that the company obtain of their customers
provide data about where they live and what their income level could be. The main source of
customer data is their reviews and feedback Lee, (2018).
IT data: Data warehouse of Amazon is highly technical known as Amazon EMR which
undertakes to perform data transformation which involves loading and processing of data into
Amazon Redshift which is an analytic and business intelligence application of the company.
Internal financial data: Financial data provides for many meaningful information that aids in
decision making pertaining to financial performance and position of a concern like Amazon. This
data can be used for identifying future financial needs and accordingly selecting optimal sources
of finance. A new business initiative always requires additional investment and this can be done
in the best way by keeping financial risk under control through analyzing financial statements.

b.
Amazon gets its various data for its multiple needs from the data centres it has established for the
purpose of providing both internal and external data. For external data, sources like Amazon
QuickSight has been used where one of its segment that is, Amazon S3 undertakes to save the
manifest file information Witkowski (2017). Accordingly, descriptive statistics has been created
on the basis of attributes of data and stored it in the form of statistics of the company. This
provides for huge data and information for making decisions. The internal data source of the
company includes its sales force, marketing team, research team of Amazon and its internally
generated financial data. These sources provides for meaningful information to the company
which in turn aids in making effective decisions.

REFERENCES
Cabrera-Sánchez, J. P., & Villarejo-Ramos, A. F. (2020). Factors affecting the adoption of big
data analytics in companies. Revista de Administração de Empresas, 59, 415-429.
Ardito, L., & et.al., (2019). Big data in smart tourism: challenges, issues and opportunities.
Zharova, A. K., & Elin, V. M. (2017). The use of Big Data: A Russian perspective of personal
data security. Computer Law & security review, 33(4), 482-501.
Dagilienė, L., & Klovienė, L. (2019). Motivation to use big data and big data analytics in
external auditing. Managerial Auditing Journal.
Lee, H. L. (2018). Big data and the innovation cycle. Production and Operations
Management, 27(9), 1642-1646.
Witkowski, K. (2017). Internet of things, big data, industry 4.0–innovative solutions in logistics
and supply chains management. Procedia engineering, 182, 763-769.
Urbinati, A., & et.al., (2019). Creating and capturing value from Big Data: A multiple-case study
analysis of provider companies. Technovation, 84, 21-36.
Raguseo, E. (2018). Big data technologies: An empirical investigation on their adoption, benefits
and risks for companies. International Journal of Information Management, 38(1), 187-
195.
Online
Amazon - Statistics & Facts. 2021. [Online] Available through <
https://www.statista.com/topics/846/amazon/>