Digital Business Report: Amazon, External Forces & Growth

This report provides a comprehensive analysis of Amazon's digital business operations. It begins with an introduction to digital business and contrasts it with traditional business models, using Amazon as a case study. The main body of the report describes Amazon's business, its modes of operation, and its various market segments. It then delves into the key factors responsible for the company's growth, including loyalty programs, customer service, and diversified product offerings. Furthermore, the report identifies the external forces impacting Amazon, such as economic factors, competitors, political and government policies, and customers and suppliers, discussing their effects on the organization. The report concludes by summarizing the key findings and providing references to support the analysis. This report offers valuable insights into the strategies and challenges faced by a leading digital business in the e-commerce sector.

Digital Business

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................2
Description of business, mode of operation and market segments.............................................2
Key factors responsible for growth of digital busines................................................................4
Identification of external forces and impact of forces on business organization........................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9
Books and Journals.....................................................................................................................9

INTRODUCTION
Digital business is a initiation of new business by using new technologies to enhance the
customer experience, add on new values in business. It use technology to create internal abilities
that influence its core group operations. This report is based on Amazon; it is multinational
technology company based in Seattle, Washington founded in 1994 and the founder of company
is Jeff Bezos. They provide products and services in world wide. Initially organisation started as
on online marketplace only for books after they expand their services and products such as;
electronics, clothes, furniture, games, food, toys, jewellery and software. ( Chaffey, Edmundson-
Bird and Hemphill, 2019)
Difference between digital business and traditional business; In digital business company can
reach out maximum number of customers from different area. Company can provide services and
products on digital platform and enhance customers experience. In Amazon context digital
business is very helpful for company to provide services and their products in different cities and
location. It increasing productivity and profitability and also build relationship with new
customers on regular basis. In current scenario company provide many facilities such as home
delivery, payment option, feedback option. In traditional business companies could not reach
customers in different locations and customers has to visit store for products. In Amazon context.
They promote their services and products through traditional marketing such as on radio,
television, newspapers. Both the businesses has advantages and disadvantages like digital
business helps in provide better services and products in various locations and customers can
share their experience through feedback but many times customers received defect products and
face issues that's the reason customers lose trust and company lose loyal customers. Traditional
businesses helps in provide better services and products in limited areas but could not explore
more market and areas. In current scenario every one use technologies, people don't have time
because of busy schedule so customers could not read newspapers and many more traditional
marketing promotion activities, customers only check digital platform for product now days.
Factors that encourage digital business in current scenario;

 Orientation: Create new position to actuation meaningful modification. In Amazon
context, this company is based on internal and external models organized around
functions and process. They focus on customers needs and expectations.(Sousa and
Rocha, 2019)
 People: Company understand that value and expectations of customers. It is helps in
encourage the digital business services. In Amazon context , they focus on customer
services and product quality, it helps in enhance the digital business in better manner.
 Process: In Amazon context, they adopt different technologies and techniques so the
company process also changed and employees roles and responsibility also changed and
digital business helps in managing work in easy manner.
 Technology: In current scenario technologies is must for every organisation to improve
services quality and provide better experience . In Amazon context, initially they didn't
has facilities so they could not reach maximum customers but in present they use various
technologies such as they provide home delivery option, payment option and they launch
own payment option also such as UPI method. This helps in growth of business in
different areas and increase profitability.(Wirtz, 2019)
MAIN BODY
Description of business, mode of operation and market segments.
Amazon is the multinational technology company which deals in many products like
clothes for both men and women, mobiles, laptops,watches and so on. It was founded on 5th july,
1994 by Jeff bezos. The company has to face with many competitors like Flipkart, Myntra,
Netflix and so on. Amazon has became the largest e-commerce company across the world.
Earlier it used to deal only in books and focused on selling books but enhanced its business as
the great online retailer by dealing in thousands of products. (Wirtz, 2019) It is also involved in
other physical stores too like Amazon go, Amazon 4-star, Amazon Books and Amazon Pop Up.
The organization also gives opportunity to third party marketers so that they reach to wider
consumers and grow their businesses but they charge commission fees as well as shipping
charges from them. The most famous service of company is Amazon Prime which is used by
billions of customers as it provides lots of benefits and has attracted all consumers. Accordin to a

research, it is analysed that in UK, 90% of people use Amazon and 40% of people are active on
Amazon prime. The most popular products which are still prefered by most of the consumers are
books, video games and so on. It has increased its sales upto 21% and reached $ 87.4 billion.
There are many mode of operation that Amazon follows. It is explained as below:- Design of goods and services:- It is very important for company to design its products
efficiently. As customers gets attracted by company only if proper management is done.
In the case of Amazon, it used advanced technologies and provides proper information so
that services to consumers can be done efficiently and effectively. (Senyo, Liu and
Effah, 2019) Quality Management:- All customers have certain expectations from businesses
regarding quality of products, management system and so on. Amazon did proper
decision making and through that they are fulfilling all expectations of consumers and at
the same time proper mangemnet system is created so that employees can also give ideas
to improve organization. Capacity design:- The organization cannot ensure that people will purchase only one
product, consumers can order many products at a particular time so company should
implement proper capacity desin. As in the of Amazon, they easily accepted all orders
due to use of advanced technology. Location strategy:- The warehouses of businesses should always be located at nearest
location from consumers so that it becomes easy for businesses also. Amazon maintained
their warehouses location near from most of the customers and through this it became
very much easy for their stores.(Weill and Woerner, 2018) Job design and human resources:- The department of human resource is most important
in every organization especially for in-house as well as third-party employment. It is
managed so that recruitment and selection of employees can be properly done. The main
reason behind growth of organization is proper management of human resources and
efficient hiring being done. Inventory management:- Organizations focus is always on ordering as well as holding
stocks. Sometimes, a situation occurs in which the moment when product reaches to
centres it is immediately shipped to consumers. Amazon played this role very well, they

maintained their inventory management properly and has provided service of immediate
shipping of products.
 Maintenance:-The technological assets should be maintained properly in the
organization. In Amazon, a specialised team handles all technological assets which leads
to satisfaction of consumers needs to enhance growth of organization.(Vendrell‐Herrero
and et.al, 2018)
There are some market segments of Amazon as explained below:-
Market segmentation means dividing market into different segments which involves
geographic, demographic, psychographic and behavioural.
 Geographic segmentation:- It means dividing market according to location so
that marketers can provide better service to customers. It depends on various
factors like climate, cultural preferences and so on. In case of Amazon, they have
divided their market across the world and now around 29 million people are
purchasing products from company.
 Demographic segmentation:- It means grouping of customers by following
certain traits like age, gender, income, religion and so on. According to research it
is analysed that around 40% people do online shopping and are between the age
of 35-49 so Amazon focus on people who uses Internet. It is also seen that 55%
men and 49% women loves doing shopping from Amazon. (Lenkenhoff and
et.al,2018)
 Behavioral segmentation:- It means dividing people into certain groups
according to their behaviour pattern. In case of Amazon, it is still considered best
e-commerce site because it has segmented the groups properly and based on
customers behaviour that what they like, what are their interests and so on.
 Psychographic segmentation:- There are many psychological elements that
affects consumers behaviour in context with purchasing of products. It includes
lifestyle,opinions, interests and so on. Amazon has always maintained customer
satisfaction through building long term relationship with consumers and fulfilling
all their expectations and because of this almost all people prefers to do shopping
with amazon site.

Key factors responsible for growth of digital busines.
There are various factors that are responsible for growth of Amazon, it is explained as
below:-
 Loyalty and pricing:- Amazon has always been loyal to its customers and
provided products at affordable prices. It provided customers with Amazon prime
membership which offers various benefits and also lead to fast delivery of
products. An innovation was done by company related to discounts for customers
who are ordering products in bulk or repeat purchases. There are certain events
which are organized like Prime day and Digital day. (Boojihawon and
Ngoasong, 2018)
 Fast and convenient:- In comparison to other competitors, Amazon is considered
best as they provides fast and convenient delivery. While doing online shopping
the main drawback that customers consideres is late delivery of products but
Amazon makes sure that customers gets products as fast as possible.
 Customer service:- It is very much necessary that customers remain satisfied with
company. All consumers want that they get proper services from companies
regarding their ordered products or if they want to exchange their items and so on.
Amazon has provided a tool to all consumers through which users can easily track
information regarding their products.
 Execution:- Amazon has executed all their plans regarding business in efficient
way. They provide products according to consumers need. Users expect that they
should get good services from retailers and company has met those expectations.
The company is also making plan to initiate strategy of brick and mortar so that
customers can get immediate delivery also.(Luz Martín‐Peña, Díaz‐Garrido and
Sánchez‐López, 2018)
 Diversified products:- The main reason behind growth of Amazon is that it
provides millions of diversified products that are available to all consumers and it
became easy for them because they get their products on a single site only. If a
customers wants a bag, then they gets hundreds of designer bags and they can
select any of them very easily.

 Platform specific:- Amazon has made different platforms for each category of
product. An innovation is done by organization that is Amazon go which is new
supermarket of Amazon and provides many capabilities that is different from
other businesses.
 Innovative ideas:- Amazon is still growing in the market sector because they
come up with innovative ideas and implement it so that thay can attract customers
and they continue to purchase from that particular site only.
 Speciality items:- There are some products which only Amazon offers and it can't
be purchased from any other site. It provides Amazon surprise button and through
this many competitors are afraid from them because it is affecting their sales.
 Straightforward shopping:- Amazon has provided consumers an easy
straightforward shopping which helps them to fulfill all consumer needs and has
achieved success. (Bican and Brem, 2020)
 Consumers are the first priority:- For any business the first priority should
always be consumers and Amazon has always treated consumers as their first
priority and leads to good customer experiences. When users gets proper services
and are treated as their family then they purchase products from that particular
site and don't focus on others digital businesses.
Identification of external forces and impact of forces on business organization.
There are various external forces that impact business organization like economy,
competitors, political and government policies, customers and suppliers.
 The economy:- An organization can easily get affected by changes in the
economy. If any problems occur in the economy then even a good business cannot
survive in market. A consumer purchase products if they have money and they
can spend on items but if a situation occurs where consumers can't spend, so users
will not purchase any luxury product which creates a threat for them as it will
affcet their business. (Ballardini, Ituarte and Pei, 2018)
 Competitors:- There are mnay competitors available in market and sometimes it
becomes difficult to survive. When a company is at the early stage then they face
more problemas because there are many experienced competitors. All other
marketers who are competing can either ruin a business or enhance it. In the case

of Amazon, it is still larget online retailer because almost every customer prefers
digital businesses rather than traditional ones so it became an opportunity for
company to enhance their goodwill and built good image in front of consumers.
 Politics and government policy:- When any type of policy changes or legal rules
are implemented it affects organization in a major way. In the case of Amazon,
government policies affected their business and it was banned too because they
were selling products of those companies who had equity stake.
 Customers and suppliers:- A business also gets affected by customers and
suppliers. It depends on customers whether they like your products, they want to
purchase or not and so on. If a company is not able to provide efficient products
to consumers then they will easily switch to another company. So, in case of
Amazon, they provided products according to consumer needs and desires and is
the most preferable site for all users.(Ansong and Boateng, 2019)
 Social factors:- An organization can be affected by social factors in both positive
as well as negative way. In today's world everyone prefers to do online shopping
but it has made people very lazy as they don't go to physical retail stores to
purchase products, they just order all products just by sitting at home, office and
so on but at the same time it is effective also because sometimes it is not possible
to go outside for shopping especially old age people so it becomes easy for them.
(Kraus, and et.al, 2018)
 Technological factors:- Amazon is famous for the technology it uses and is
considered effective as well as efficient. Due to use of various technologies like
cloud computing they had provided full customer satisfaction as the company also
introduced facility of Amazon prime but technological factors can impact
business in a negative way too. As people makes payment through their debit or
credit cards so there lies of risk of cybercrime, personal data of people can be
hacked which will impact businesses and may ruin their image.
CONCLUSION
According to above analysis it is concluded that, digital business is most efficient way to
enhance growth of any organization. In today's world almost every individual prefers to do
online shopping because sometimes it's not possible for them to visit stores. Digital business can

affect the organization in both positive as well as negative way. It is considered positive because
people can purchase products even while sitting at home and they can order it within a minute
but at the same time customers remain in a doubt that whether they will get good quality
products or not, late delivery and so on. Almost every organization prefers to do digital business
so that their sales can increase and their growth can be enhanced. It also helps in exploring more
market areas which is not at all possible in traditional business and they can reach to more
customers in comparison to customers who are visiting stores.

REFERENCES
Books and Journals
Chaffey, D., Edmundson-Bird, D. and Hemphill, T., 2019.Digital business and e-commerce
management. Pearson UK.
Sousa, M.J. and Rocha, Á., 2019. Skills for disruptive digital business.Journal of Business
Research,94, pp.257-263.
Wirtz, B.W., 2019.Digital business models. Springer International Publishing.
Senyo, P.K., Liu, K. and Effah, J., 2019. Digital business ecosystem: Literature review and a
framework for future research.International Journal of Information Management,47, pp.52-64.
Weill, P. and Woerner, S., 2018.What's Your Digital Business Model?: Six Questions to Help
You Build the Next-Generation Enterprise. Harvard Business Press.
Vendrell‐Herrero, F., and et.al, 2018. Digital business models: Taxonomy and future research
avenues.Strategic Change,27(2), pp.87-90.
Lenkenhoff, K., and et.al,2018. Key challenges of digital business ecosystem development and
how to cope with them.Procedia Cirp,73, pp.167-172.
Boojihawon, D.K. and Ngoasong, Z.M., 2018. Emerging digital business models in developing
economies: The case of Cameroon.Strategic Change,27(2), pp.129-137.
Luz Martín‐Peña, M., Díaz‐Garrido, E. and Sánchez‐López, J.M., 2018. The digitalization and
servitization of manufacturing: A review on digital business models.Strategic Change,27(2),
pp.91-99.
Bican, P.M. and Brem, A., 2020. Digital Business Model, Digital Transformation, Digital
Entrepreneurship: Is There A Sustainable “Digital”?.Sustainability,12(13), p.5239.
Ballardini, R.M., Ituarte, I.F. and Pei, E., 2018. Printing spare parts through additive
manufacturing: legal and digital business challenges.Journal of Manufacturing Technology
Management.
Ansong, E. and Boateng, R., 2019. Surviving in the digital era–business models of digital
enterprises in a developing economy.Digital Policy, Regulation and Governance.
Kraus, S., and et.al, 2018. Digital entrepreneurship: a research agenda on new business models
for the twenty-first century.International Journal of Entrepreneurial Behavior & Research.