Analysis: Suitability of Balanced Scorecard for Amazon Company

This report examines the suitability of the Balanced Scorecard (BSC) for Amazon, a global e-commerce giant. The analysis begins with a description of Amazon's business model, focusing on its mission, vision, and guiding pillars, including its customer-centric approach and strategic objectives. It outlines the company's organizational structure, including key departments like software development, retail product management, information technology, and customer service. A SWOT analysis is presented, highlighting Amazon's strengths (market leadership, customer focus), weaknesses (seasonality, product category focus), opportunities (e-commerce expansion), and threats (online security, market share issues). The report then delves into the BSC framework, detailing its features, including financial, customer, internal business processes, and learning & growth perspectives. It differentiates the BSC from traditional performance measurement systems, emphasizing the BSC's ability to translate strategic goals into actionable measures. The report underscores the BSC's role in aligning day-to-day activities with long-term objectives, providing a comprehensive performance evaluation tool for Amazon's continued success. Furthermore, it emphasizes the importance of BSC in the current business environment which is marked by rapid changes.

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SUITABILITY OF THE BSC FOR AMAZON COMPANY
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SUITABILITY OF THE BSC FOR AMAZON COMPANY
Description of the firm
My client firm is Amazon Company that deals with sales of various goods and services
under one venture to improve the utility of the customers. This profit-oriented organization
focuses on investing in the whole world. This company has always been at the forefront in
creating a reasonable standard of the customer by creating good reputation to its customers. They
have achieved their big goals by offering quality and efficient services to their customer. This
firm has got its guiding pillars which include the mission and the vision of the company towards
fulfilling the goals ahead of them (Data Monitor 2010).
The visualization statement of the company is to become the global most successful
online retailer where the customers can get what they need through the use of the technology.
The company has come up with very many ventures currently to enable the comfort of their
customers. Through the use of the internet, Amazon has been able to connect to the highest
population in the world and offering their services to the customer's satisfaction. The visionary
statement has pushed Amazon to become the best retailer in the world and best performing. The
employees to ensure the achievement of the company's vision has followed this objective of the
company (Data Monitor 2010).
The corporate vision has enabled the management of the firm to be one direction of
achieving the goals stipulated by the company. The mission statement of the company focuses on
making the company dominate in the future world on business matters globally. Through this
strategic formulation of the mission makes it a mammoth in the business world. The mission
statement also dwells much on articulating of sound and quality services to the customer to make
him or her love the services offered by the company (Gibbons and Kaplan 2015). By making this

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an authentic experience, the company is assured of an increased number of customers to enable
rendering of good profits that will lead to the realization of the mission imminent (Coe and Letza
2014).
Amazon has other goals that lead to making the best experience for the company in
future. As it is economically viable that consumers seek the highest quality goods and services at
the lowest price, Amazon has come strongly to enable this happens with no any compromise
since their prices are lower in comparison with other online retailers in the globe. The mission
statement has three sections focusing on how to improve the satisfaction of the customers and
make profits from them leaving a mark behind. It has focused on the lowering of the prices, the
best selection of the products they sell to the customers and providing an enabling environment
for the clients to transact. (Data Monitor 2010)
The lowest prices pillar of the mission helps the Amazon's management in the pricing
strategy, and through this, the e-commerce website of the company becomes very attractive to
the customers in the world. Amazon has also come out strongly in reducing the operational cost
to the customers thus trying to achieve the best selection strategy (Parmenter 2015). The
availability of many varieties of the products in the website allows attraction of the customers to
buy goods from the company. The convenience of the company enables the company customers
not to compromise on the quality of the services rendered by Amazon company.
Apart from the objectives, Amazon is run by a structure that comprises of various heads
who strive to make the vision and mission come true. The company is run by a hierarchical
structure which is divided into different segments to achieve the stipulated goals. It has two chief
executive officers, three senior vice presidents, and one global moderator who is accountable for
numerous aspects of the business commentary right to Amazon C E O Jeff Bezos (Matthews

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2015). Amazon being a considerable retail shop has various segments that lead to the articulation
of issues according to a particular department. Enables the efficiency of the firm since every
section has the degree of evaluation of the results at the end of the day. The articles include the
software development (deals with the derivation of soft wares that are trending in the current
technological world). Allows Amazon to remain an updated e-commerce website despite the
rapid growth of the computer world. Retail product management and merchandising is another
segment that deals with sales of the individual products in the company. Information technology
helps the website control the activities taking place in the company since it is an online shop thus
relying entirely on technology. (Data Monitor 2010)
Operations and customer service is another segment of the company that deals with
attending to all services and problems affecting the customers. When a customer has issues to do
with services offered or encounters a problem with the goods sold to him/her the approach to this
segment provides the best experience. Finance and administration is a segment that deals with
the funds entering the company (Lawrie, Kalff and Andersen 2015). This segment is also meant
to make decisions for the company to strive ahead. Upon the other sections, human resource is
presented as a vital department to enable maximum use of the resources of the company.
Amazon has the last segment being the legal operations that are concerned with the code of
ethics to the customers by the employees while working and the overall conduct of the company.
Finally, on discussing Amazon as my firms' client, the SWOT analysis of the company is
very important since the strengths, weaknesses, opportunities, and threats are stipulated right.
Starting with the power of Amazon Company the following are specified as being in the market
leadership in the global scale, experiencing a large scale use of the mover advantage, effective
administration by the founder member and the current CEO Jeff Bezos (Martello, Watson and

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Fischer 2016). Cost management due to a successful and customer friendly cost structure of the
company and the most exceptional customer bond organization.
Consequently, Amazon has one of its weakness being the seasonality of the business
since there are peak seasons and relatively low seasons leading to low-profit margins. Lack of
focus on the product category since it deals with varieties of products and services under one
venture. The delicate modest situation of the Amazon’s fire phone to others and final weakness
being spoilt trademark image due to tax humiliation in the UK (Hoque 2014).
Among the opportunities in Amazon company include the divergence of the of the e-
commerce business segment increase on own trademark, development of more local suites to
enable reaching of as many customers as possible in future. Engagement in collaboration with
other e-commerce companies to improve the profit margin of the company. Jeff Bezos period
Amazon has threats as well which include problems with online security, recent market share
post by the C E O, loss of profitability due to low-profit margin. (Harrison 2017)
According to the SWOT analysis above Amazon company requires a balanced scorecard
that will enable the management system of the company to perceive big picture imminence. The
balanced scorecard allows the company to reach the goals stipulated in the objectives to the
latter. Traditionally many companies have practiced their health only to the income they get after
being involved in the business world and focusing on the short-term profit making. The balanced
scorecard enables the organization to the addition of the traditional ideas of strategic planning to
a more advanced performance. It focuses on both the high and low level to create a good check
up on the performance of the company (Shen, Chen and Wang 2016).
BSC and its features

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The balances scorecard takes a big organization and aligns it small broken down
actionable steps that are made on day to day basis to enhance full performance. The balanced
scorecard has features that inarticulate the functioning of the company at large. The features
include financial, customer, internal business processes, learning, and growth of the firm. The
above function is discussed singly to exhaust all the potential (Busco and Quattrone 2015).
Learning and growth perceive the tradition and culture in the area of production of the
sales. Culture and tradition tell more whether the increase is substantial or not. The learning and
growth try to answer the following questions; are people aware of the current trend of the
country, is every employee in the company skilled enough to carry out tasks assigned, the
technology available in the company and what the company is trying to do to conquer the current
stiff competition (Keyes 2016).
Internal business processes are another feature of the balanced scorecard that ensures the
company is running smoothly. Helps the management in a significant way since it provides that
the employees are doing the best and utilizing the available resources to avoid wastage. Also aids
in speeding up the activities thus increasing units of output (Hansen and Schaltegger 2016).
The other important perspective focuses on the customer who is the primary market for
every business. This perspective answers various questions which include winning the firm,
viewing what competitors are doing, keeping the existing customers and attracting more
customers to the firm. Satisfaction of the customer is the critical thing in preserving a profit-
making future (Keyes 2016).
The financial aspect is a significant focus of the balanced scorecard thus take for much
concern. It tries to answer the vital questions like is the company making money, are the equity
holders happy, how is the financial health of the company. The balanced scorecard is essential to

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improve and monitor the activities taking place in the company and should be for a great
experience.
Differences between BSC and traditional systems
In the hasty variation in business environment, organizations face a lot of competitive
pressure in making things work more comfortable, faster and in a cheaper way. Markets are self-
motivated, and with a lot of changes to the business growth regarding technology and principles
of business management and performance, this causes complexity and increased uncertainties.
The corporate performance measure fixed of countable metrics engaged from numerous
foundations that wrinkle with a suitable investigative procedure, that consents the administration
of a firm to the trail and calculate the present position of a particular industry, venture or
practice. Measurement of performance enables the organization to allocate its resources wisely
and ensure maximum output is according to the business goals and targets. (Bourne 2007)
This measurement also provides the management on information based on the past
performance, present performance, upcoming guidelines, and the wrong thing that has already
happened in business and finally when the company has achieved its objectives and missions.
The measures also give the workers a feeling of what victory is and what the administration line
up. Hence these measures are in between the firm's strategies for future and the daily operations
of the firm.
The traditional performance measurement system and the balanced scorecard are but a
few of the tools of business performance measures. Stable scorecard tool is the latest tool
brought up by the change in environment and the rapid competition in the market industry. It is a
highest downcast administration tool aimed to transfigure planned goals into executable

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enactment measures and action procedures (Freeman 2014). The balanced scorecard classifies
corporate enactment by commercial, consumer, inside methods and erudition and progress.
Consequently, the traditional performance measurement system is on the data available
and methods existing in commercial accounting, budget accounting, and administration-
accounting. Commercial accounting is the precipitate scrutiny and report of the financial
dealings attentive to the business this is done to for the tenacity of providing the company
lenders with information for them to assess the value of a company by themselves (Kerai and
Saleh 2017). Budget accounting is where all the expenses sustained by the firm in carrying out
an action or undertaking a resolution are composed, categorized and documented; this data is
then summarized to come up with the selling prices or either to determine the profits possible for
the company. Administrative accounting is the progression of formulating executive information
and financial records that deliver precise and well-timed financial and arithmetical data
prerequisite by directors to make routine and interim resolutions. Traditional performance system
focuses on the past financial performance and not process hence not reliable as a balanced
scorecard (BSC) (Kerai and Saleh 2017).
The traditional approach has the following characteristics as its measures, current and
upcoming. The three categories are what surround the organization prosperity, through analyzing
the past mistakes and getting solutions combining with the current statistics to apply in the future
strategies to achieve the best ().
Measurements established on the needs of the consumers and investors; it does not
measure the internal organization factors that enables the firm to run its day to day activities such
as the employees. The investors are the one who has provided for the factors of production, for
instance in Amazon online retail shop measurement will be done based on the shareholders, and

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Jeff Bezos had the highest shares. However, the balanced scorecard uses the private firm's
progression that is how to improve critical processes in business to ensure more value delivered
to customers through fast, easy and affordable methodologies (Kerai and Saleh 2017).
In the traditional measurement of performance, calibration is in according to the target
and goals established in the analysis while in the balanced scorecard it is done according to the
vision and strategy of the company. Suppose a company has excellent plans for doing and the
way it handles its services and workers then it is a high possibility of it having a top balanced
scorecard (Gibbons and Kaplan 2015). For instance, if Amazon company could use traditional
methods it would have put a target of which when achieved it has completed its performance, but
at that time Amazon's competitors have realized their vision through using their strategy, then
this will mean Amazon has not succeeded in its performance according to balanced scorecard.
Vision and strategy are all about what the customer wants and if they consider what is being
delivered by the company if it is providing quality services or goods and of value to the
consumers (Freeman 2014).
BSC suitability
The balanced scorecard is the best way other than traditional performance measurement
since the conventional measures are all based on short-term focus. The information presented
only focuses on economic and action statistics. Furthermore, this information enables a company
to focus solely on its high outflow, revenues and profits hence the company will likely not to do
well in its transactions and finally end up failing. The long measures that are supposed to be
followed being the quality of goods and services produced by the firm, the obligation of the
public in the firm, workers gratification and finally consumer fulfillment (Gibbons and Kaplan
2015).

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Measurement in traditional performance concentrates on the price and income data,
which would finally bring confusing or inappropriate information. Lack of including process
may also lead to delay in taking counteractive actions during the incidence of a problem. It is
also hard to evaluate the value additional and non-value additional actions due excluding of
process activities in measurements.
Traditional measurement also inspires competition and discourages teamwork. The
analysis is done by comparing one company with the other and not with the firms' performance
and goals. For instance, when one company is at the top, it will need to be always there, and
hence the employees will not share on ideas that affect or will be helpful to each other thus
discouraging teamwork. Each firm will compete to become the top in position (Gibbons and
Kaplan 2015).
It is in one dimension basis in traditional measure of performance. Meaning that
performance is measured only hence managers get it difficult to weigh if they have instigated
their policies efficiently.
The balanced scorecard is suitable for Amazon as it lays a suitable structure for their
strategy. It ensures that every part of the organization by online stores, customer care, and prices
and makes way for easy understanding. This has enabled the balance of trade and increase of
sales as customers are satisfied (Freeman 2014).
There is also a good strategy for execution. It is better to have the lousy plan and execute
it well than having a decent program and execute it unwell, a horrible idea performed well will
make the organization to learn from mistakes done and will formulate the best plan. For instance,
Amazon Company developed a strategy of producing a mobile application that would make
work easier for its customers. It was generated through a good plan and due to the guidance

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through solid record it provided sustenance through the incorporation procedure and endures to
nurture and advance the context (Nelson 2018).
It also delivers the background to bring into line every affiliate in the organization around
mission and vision of the firm. Balanced scorecard has encouraged teamwork among workers
and hence ensures that each member has the responsibility of moving the firm forward in
achieving its objectives. Amazon company through foster of its workers it has made the goals of
its shareholders. Jeff Bezos has used tactics of employee's teamwork and giving motivations to
the workers to ensure they work to attain the purposes of the company.
Balanced scorecard has permitted the association to be more approachable to variations
in the competitive scenery. For example, Amazon Company can track other firms' prices and
know that there is the entrance of another competitor in the market. Through tracing balanced
scorecard measures, it has enabled Amazon Company to identify the threats as soon as possible
before they encounter huge losses (Coe and Letza 2014).
It has helped to improve on transparency issues in the company. Balanced scorecard has
showcased to the shareholders, people, and customers of Amazon that they are on a direct plan
path. For example, when they want to plan a project, the budget is delivered to the public and
will make sure it does not surpass the produced budget (Coe and Letza 2014).
Balanced scorecard has made it tranquil to lead into the plan for the tenacity of attaining
high-level professional goals. Amazon has executed this, and they have achieved to give their
workforces vibrant objectives to have inattention while in operation, aid workers recognize
essential aims, consent personnel to improved comprehending to the premeditated components
that need effort and permits workers to understand in what way ideas touch one another.

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Finally, balanced scorecard aids workers to realize in what way their specific objectives
connect to the basic strategy. It has enabled the employees to get the better understanding that
what they purpose to do is for the betterment of the team and the company as a whole.
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