Overview of Amazon Company to Evaluate the Business Model
Origin
Jeff Bezos was a successful investment banker making a six-figure salary on Wall Street. It is said that Bezos had always dreamed about starting his own company on the electronic retailing industry. The concept of selling products on the World Wide Web was revolutionary and an uncharted territory. At 30 years old in 1994, he decided to quit his job to start his virtual bookstore company. The risk eventually paid off and Amazon has become one of the most globally known brands with a base of approximately 13 million customers. The story goes that one day while surfing the internet Bezos came across an article citing a growing 2, 300 percent of internet users. As a result, he recognized the endless opportunities of selling online and decided to invest in this new venture that we now know as Amazon, Inc.
Background
Amazon, Inc. is a Fortune 500 company headquartered in Seattle, Washington. The company came into the retail scene leveraging on the growing popularity of the World Wide Web during the early 1990s. As of now, it offers a wide variety of products with very little competition. As an e-commerce pioneer Jeff Bezos’s objective was to make Amazon a “one-top” shop where customer could find anything they might want to buy online with the lowest products possible. Amazon rapidly grew from being a book retailer to offering more than fifteen product options. Some categories include books, Auto & industrial, Movies, Sports & Outdoors, Music & Games, Health & Beauty, Digital Downloads, Shoe & Jewelry, Electronics & Computers, Apparel, Home & Garden, Grocery, Toys, Kids & Baby. In addition, the company has expanded into new areas such as Kindle reading devices, cloud service, Prime membership programs, and many other areas. Amazon strives to provide customers with the “Earth’s Biggest Selection” outlook today in the marketplace. Amazon’s digital busines strategy is continually study because of its proven results. From startups to large international business they all have learned from the benefits of a customer centric-approach, testing new market opportunities made possible by technology, and most importantly, their focus on improving results. As of today, “Common shares outstanding plus shares underlying stock-based awards totaled 506 million on June 30, 2018, compared with 502 million one year ago. ” Net sales increased 39% to $52. 9B in the second quarter.
Amazon is hailed as an innovative company who continuously reshapes the retail industry by aggressively conquering new markets and defying the status quos. In reality, Amazon is much more than just an e-commerce giant, as the company keeps creating other sources of revenue that are outside of its core busines. Currently, Amazon holds almost 50% of U. S e-commerce sales and many keep wondering whether Amazon is monopolizing the industry. On thing is clear though, because of its enormous influence, the company has the power to alter prices and control various aspects of the industry. Most importantly, the company has endless potential in terms of profitability and sustainability in growth momentum.
Industry Outlook
Amazon falls into the internet retail industry. Also known as “Electronic Rretailing – E-tailing”, internet retail is defined as “the sale of goods and services through the internet. Electronic retailing, or e-tailing, can include business-to-business (B2B) and business-to-consumer (B2C) sales of products and services, through subscriptions to website content, or through advertising”.
The e-commerce industry is growing at an exponential rate with online sales accounting for approximately one quarter of the total retail market. More and more customers have been shifting to purchasing their products online. Many traditional retailers are slowly transitioning their trade into the e-commerce industry to ensure they stay current and profitable. Online retail is attracting businesses for all types of industry thanks to its easy access to market, reduced overheads, and potential rapid growth. In terms of industry changes, mobile payment for “everything” will be the norm and almost all employee in the retail industry will be replaced by technology (except product experts and style consultants). Currently in the West 37% of customers use their mobile device purchases, that’s a 14% increase from 2017. Additionally, shopper’s personal protection from data hackers will be increased and companies such as Amazon, Alibaba, and Google will be at the forefront of innovation and change. Last, but not least, government will be a lot more involve in regulating the industry than it is today.
Amazon Inc. ’s Vision, Mission, and Objectives
It can be agreed that Amazon Inc. ’s mission and vision statements have helped the company position itself as a megabrand on a global scale. And Amazon goes to great lengths to ensure those statements are strictly enforced. Amazon’s mission statement is “We strive to offer our customers the lowest possible prices, the best available selection, and the utmost convenience. ” Amazon’s mission statement focuses on providing their customer with the highest-quality of service. For instance, the company places high emphasis on customer’s shopping convenience and access to a varied selection of products. On the other hand, Amazon’s corporate vision is “to be Earth’s most customer-centric company, where customers can find and discover anything they might want to buy online. ”
In relation, the company’s vision statement strives for a future of global expansion in the e-commerce industry. In theory, the company wants to attain global reach, refine their customer-centric approach, and have the widest selection of products. Strategically speaking, Amazon’s mission and vision statements are very important in developing strategies to support their competitive advantages against competitors such as Google, eBay, Apple, and Walmart. In summary, Amazon mission and vision statement are aligned to unify their diverse operations in various industries. Amazon has emphasized the importance of “global reach” through the vision statement. Their purpose is to conquer the international e-commerce market. Their objectives are clearly stated as gaining leadership in the e-commerce market on a global scale through market positioning and market development.
Leadership & Leadership Style
Amazon’s Inc. ’s organizational structure provides great control on global e-commerce operations. Their corporate structure determines how managers conduct and influence operational activities in various business sectors. It is important that Amazon employs an organizational structure that permits them to sustainably expand their market reach in terms of products and business diversification. Amazon has a functional corporate structure. This structure “focuses on business functions as bases for determining the interactions among components of the organization. ”
Some of the characteristics of Amazon’s organizational structure include global function-based groups, global hierarchy, and geographical divisions. One of the most important characteristics of Amazon’s corporate organization it’s the function-based groups. Each major business sector has one assigned team, along with a senior manager. The purpose is to enable Amazon. com to facilitate successful operations activities throughout the entire company. Other teams who also report directly to Amazon CEO are legal operations, human resources, and technologies. On a much more scaler, Amazon’s chain of command can be labeled as hierarchical. Senior management team includes two CEO’s, three Senior Vice Presidents and one Worldwide Controller who report directly to Amazon’s CEO Jeff Bezos. Jeff Bezos, as the CEO has proven to be a very efficient and visionary leader. He is known as a transformational leader because he has an innate ability to “inspire confidence and secure commitment of others to his vision. ”
Transformational leaders are those who can shape individuals to align with their goals. One of the most recognizable traits about Bezos is his charisma. Since the birth of Amazon, Bezos has had the ability to attract talent and investors to believe in his vision. featured an astronaut on the moon delivering a package from Amazon. The caption read, “How far will Amazon go?” That just goes to show how Bezos has ingrained in the minds of other his vision of the potential that Amazon has. He has been a pioneer of his time challenging the status quo in many ways. He is a disruptive force inspires his team to think that the impossible is possible.
Company Product/Services
Amazon’s products and services fall into several categories such as retail goods, Amazon Prime and consumer electronics. It a multi-sided company that provides products, services and technology that link different type of consumer to each other. Retail goods includes several media, apparel, baby products, consumer electronics, health & beauty products groceries and much more. Amazon Prime is a membership that offers free two-day shipping as well as discounted one-day shipping rates. Additionally, Amazon has developed consumer electronics of their own – most notably Kindle Fire, Amazon Fire TV, Echo and Alexa. Other products and services include digital content, Amazon Art, Amazon Video, Amazon Drive, Privat labels, Amazon Studio, Amazon Web Services, Amazon Publishing, Donation, Amazon Local, Amazon Wireless, AmazonFresh, Amazon Dash, and Amazon Go.
Target Market
Amazon targets all types of costumers. Those include enterprises, content creators, final customers, and sellers. AWS offers technological infrastructure that can be used business from small to large. Currently Amazon targets customers in both urban and rural areas in more than one hundred countries. The demographics include both male and female eighteen year or older. Most of them at the bachelor stage young and single not living at home. It also includes young married couples with no children. If there are children, they are either under six, over six or older couple with dependent children. Also, older married couple with no children living at home. Additionally, solitary survivors in labor force or retired. Some of the occupations include student, employee and professionals. Finally, psychographics includes lower class, working class, middle class, and upper class.
