Amazon case study
Amazon.com is one of the biggest online retailers in the world. Jeff Bezos, the founder and the current CEO of Amazon.com, is the talent leader with many experiences in various kinds of fields as computer programming, finance, and international markets. Its products are diversified categories can meet the customers’ needs such as books, music, toys, apparel, electronics. Besides, it also supplies some services including partnerships, shops, online auctions, and web services.
Customers’ services of the Amazon.com are relatively good. For instance, the A to Z guarantee is considered as a program which protects the customer rights and helps the buyers feel safe. There are many payment methods that customers can choose for their transactions with fast and effective distribution. To do transaction more easily, Amazon.com has invested in technology that plays a significant role in every company to create more competitive advantages than the other competitors. With the attractive marketing strategies through multimedia as internet, television, print, and radio, Amazon.com draws a large number of customers and users. Company has two main segments including domestic and international market. The domestic market focuses on North America. International market focuses on Canada, Japan, France, Germany, and United Kingdom.
In management strategy, Bezos has cooperated with
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The Amazon’s strategic policies emphasize the management strategy, marketing strategy, and policies of customer services and payment methods. Among these policies, the strengths of Amazon.com are something that focused significantly on customer services, especially payment practices and so many creative ways to supply what its customers need. Amazon.com has become an online shopping mall that is worth reliable. Besides, the success of the company has also based on partnership and affiliation agreements to broaden its goods and introduce its brand name to browsers. Taking online market share is difficult, but keeping the customers is much more different.
Jeff Bezos, the founder and current CEO of the Amazon.com, focuses on a management style called “no delegation of power”. It means that he does not delegate powers to another one at a high level. Instead, he participates in almost management processes. Bezos checks all press releases with his quotation carefully. If he does not receive the answer from a subordinate, he will make an appointment and converse with him/her directly. However, this strategy increases the resignation rate of top management of the Amazon.com. It is higher than one of other companies. Within 2 years, there were 20 among 50 top managers left company.
Amazon.com introduced the new way for purchasing and shopping through the Internet if possible. This marketing way did not spend advertising expenses. However, in order to increase the concern of customers and expand its brand in the new market. Amazon.com had spent a very large of number of money on advertising by Television, Radio, and Print. Unfortunately, these ways were suspended because it took a lot of money while Amazon.com sold products with low prices and free shipping. Amazon decided to reduce expenses in particularly advertising.
Amazon has the strong investments in the technologies. This company creates and uses the patent technologies to run its business. This company uses the encryption technology with the Secure Sockets Layer software or SSL software that is the best software to ensure the security of the online transactions at this time. However, with the rapid development of the Internet and technologies today, there are some potential risks and mistakes that can take place.
Some specialists find out that the users can take the cookies for their private purposes through some web sites have the use of SSL software but in the unsecured condition. For example, when customers want to buy items on Amazon, they will have to use the credit card. Maybe it will be the opportunity for the information thieves to steal the records of credit card holders. Michael Zusman, a senior consultant, said that “The way we use SSL today is flawed” (Greene, 2008).
Online purchasing is becoming the popular shopping way because of its usefulness such as convenience, and saving time. However, like many other online retail web sites, Amazon.com has some limitations that may cause the reduction of customer’s beliefs. The items as high technology products can become old- fashioned after some days if they are shipped lately. The Amazon.com fixes the price of a product that customers are equivocal and hard to check. The customer’s complaints are seldom resolved. The design, color, features and quality of online products are often received the reactions of consumers when it is quite different from its image on the internet.
Amazon’s competitors are both offline and online. It includes the largest online competitor, eBay, Google, Yahoo, and multi-channel retailers such as Wal- Mart, Sear. Amazon.com and eBay are the largest online retailers in the world. eBay has become a competitor of Amazon when it decides to sell the products which have fix prices instead of online auction. To enter the international market not only in the United State but also in the other developed countries as Japan, Germany, Amazon has a problem in competition when it enters the France market. The France government considers that free shipment strategy of Amazon has violated the law of this country about dumping because of its free shipment project. Amazon’s products are sold in the price that is lower than other both offline and online retailers by five percents.
On the other hand, physical offline stores are also the competitors that Amazon.com and the others can not be uncaring because many people still consider that they would rather pay more money for the product that they want to buy to get the satisfaction about the product without waiting shipment than buy through the internet. Furthermore, in the areas that have no information technology, Amazon.com-online retail website indirectly creates the blank in the market and it’s also advantages for offline merchandisers.
The last competitive issue of Amazon.com is when Google creates the largest e- bookstore in the world. With this project, readers can have more convenient conditions to approach the value materials that they do not have to pay money for their reading. This makes Amazon.com to face the big threat because it is one of the biggest online retail website selling books through the internet.
Jeff Bezos shows that his strategic vision about founding Amazon.com is judicious. His style is also the specific style of Amazon.com: the flexibility. With the decentralization method, giving a preferential treatment for the talents, and using technology in business, Bezos makes the Amazon legend and create new business model in technological and scientific economy. Amazon.com establishes a prize named “Just do it” for it employees. The winners are the employees who have considerable achievement in contributing wholeheartedly to the company without the CEO’s approval. The purpose of Bezos is that he wants every employee can take the initiative in all work.
Building a storage system is not an easy decision of Amazon.com. With 50 million dollars per one, the building and operating a warehouse is very expensive. However, when visiting a warehouse of Amazon.com, you can realize that it is quite different from tradition warehouses. Its warehouses are applied high technology and require enciphered codes to operate. In fact, when Internet became easier to use in 1995, Amazon used Java, a programming language released by Sun Microsystems, to run interactive web pages, web sites. Nowadays, one of the biggest advantages of the Amazon.com is the possibility of inventory management. Besides, it undertakes all e-commerce businesses of the other retailers such as Toys R Us and Target as a subcontractor.
Unlike traditional retailers, Bezos expands his corporation with competitors instead of finding a way to win them. Amazon.com is now selling many products of other retailers on its own web site. At the first time, it met the objections from many sides. However, after implementing, the success of the Amazon.com is unbelievable. The reason is that it has a very effective storage system. When selling products and paying commission to other retailers, the percentage of profit of Amazon.com is as high as the percentage of profit is when selling directly to consumers. In addition, the Amazon.com does not pay for advertising expenses. It helps to not only save money but also create the loyalty and belief of customers.