Am Mazon
Am Mazon
Am Mazon
A. Case Abstract
AMAZON ,(Amazon.com) was created by Jeffrey Preston "Jeff" Bezos and incorporated on May
28, 1996 as an e-commerce company. As most people know, the company,Amazon.com, offers
a very large variety of products and services online through their websites. Amazon’s products
not only include merchandise, but they also manufacture and sell electronic devices, such as
the Kindle e-readers, Fire tablets, Fire TVs, and Echo and Fire phones. However, most people
do not realize that Amazon was also the first company to really divulge in cloud computing. The
company serves many different developers and enterprises of various sizes through their
Amazon Web Services (AWS).AWS offers other companies a set of global compute, storage,
database, analytics, applications, and deployment services (Reuters, 2015).This is only the tip
of the iceberg for Amazon though.The company also works with authors and independent
publishers by offering them 70% in royalties for using Amazon Publishing
To be Earth’s most customer-centric company, where customers can find and discover anything
they might want to buy online, and endeavors to offer its customers the lowest possible prices.
1. Customers
2. Products or services
3. Markets
4. Technology
5. Concern for survival, growth, and profitability
6. Philosophy
7. Self-concept
8. Concern for public image
9. Concern for employees
D. External Audit
8. Personalized Shopper Service Hits Big – Amazon recently launched its incredible
personal shopper service exclusively for Prime members. So, if you have an Amazon
Prime subscription, you can opt for the personal shopper experience giving you access to
the company’s team of professional stylists and fashionistas.
They’re going to help you select the best clothing items, accessories, shoes, bags, wallets,
etc., that suit your taste. Remember, there are millions of product options available, having
a personal team of shoppers is going to be big-time help.
9. Plans to Enter the Crypto Stratosphere: There are a lot of speculations and rumors
floating around the crypto ecosystem. However, there have been reports by mainstream
media outlets that Amazon does indeed plan to make a move into cryptocurrency, stating
that the company has developed a big appetite for digital currencies and blockchain.
If the retail giant does step into crypto-space and accepts virtual currencies as a payment
option, there will be massive opportunities for small businesses in the future.
3. Links to exploitative labor – Amazon is one of three retail giants facing scrutiny
from the US State Department for maintaining supply chains and labor sources
associated with human rights abuses. This exposes the ecommerce giant to
reputational, economic, and legal risks.
EFE Matrix
5. Cost Leadership – Amazon doesn’t incur costs in maintaining physical retail stores
by selling everything online. With economies of scale, Amazon efficiently controls its
costs and lowers its inventory replenishment time. The company has formed
numerous strategic alliances with many companies like Evi Technologies, Thalmic
Labs, Shoefitr, The Orange Chef etc. It has a strong value chain system which also
helps in maintaining a low-cost structure.
7. Large number of third-party sellers – Due to the high traffic volume on Amazon’s
sites, a large number of third-party sellers have joined the platform of Amazon to sell
their own merchandises. The data from Fulfillment by Amazon (FBA) reveals that there
are more than 2 billion items available from third-party sellers.
8. Go Global and Act Local strategy – This strategy has benefitted Amazon the most.
Amazon develops partnerships with local supply chain companies that help it in
competing against domestic e-commerce rivals. It understands the local needs and
launches its services as per the country’s culture.
In India, for example, it has launched a market campaign “Aur Dikhao” to encourage
users to search more of its products.
12. Superior logistics and distribution systems – Amazon uses highly efficient
logistics and distribution systems. It even has fixed rates for different delivery time
periods. Thus, it executes reliable, secure, and fast delivery of goods and products to
the customers.
13. Minimum pay raise to $15 per hour – Amazon is among the first companies in
retail to raise its minimum hourly pay to $15. In comparison, Target pays $12 per
hour, Walmart pays $11 per hour, and Costco pays $14 per hour.
Image source: Statista
2. Losing Margins in Few Areas – In few areas such as India, Amazon has faced
losses. It’s free shipping to customers can be one of the reasons that expose the risks
of losing margins in some markets.
3. Product Flops and Failures – Its Fire Phone’s launch in the US was a big failure
while its Kindle fire device didn’t even grow well.
8. Unfair use of third party data – Engaging in unfair trade practices undermines trust
and increases legal risks. Amazon is facing antitrust charges in the European Union
for collecting and using data from third-party to compete against them. If found in
violation, Amazon can be fined up to 10% ($28 Billion) of its 2019 annual revenue
($280 Billion).
12. Amazon Drivers Allege Inhumane Work Conditions – Amazon delivery drivers allege
that they’re forced to urinate in bottles because of the strict delivery time schedules and
constraints. While the company has denied that they don’t force their drivers to pee in
bottles, some drivers have come forth with complaints.
While the online retail giant denies the allegations, it’s also true that the company does
impose very strict company policies – which can come with bad consequences for Amazon
workers.