Evaluation of an Amazon company - Case Study Example

Table of contents Executive summary………………………………………………………………………………3 Introduction………………………………………………………………………………………4 Business strategy…………………………………………………………………………………4 Services, products and geographic expansion…………………………………………………….6 Marketing and promotion……………………………………………………………………….7 Customer service…………………………………………………………………………………8 Warehousing, Fulfillment and Distribution……………………………………………………9 Technology………………………………………………………………………………………10 Factors which are likely to affect future results…………………………………………….11 Conclusion………………………………………………………………………………………12 Recommendation………………………………………………………………………………13 Works Cited……………………………………………………………………………………..14 Appendix………………………………………………………………………………………...15 Executive summary Amazon is one of the leading online shopping destinations. To enable it remain relevant in the highly competitive market, the company explores a number of strategies to enable it withstand the market dynamics. The company explores a number of factors such as astute business strategies, marketing, technology, and fullfilement and customer service. However, the company should not be blind to potential futures risks since the online shopping interests of clients are very flexible and unpredictable. For this reason, constant market research is vital in order to be updated with new market trends and customer interests.Reccomendation given offers insight on more avenues that the company should look into in order to maintain its standing as the undisputable online shopping website trend setter. Lastly, the conclusion reviews the various strategies implemented on regular basis for effective service delivery to its clients. Introduction Amazon is one of the leading companies in the e-trading sector. Having been established in the year 1995, it has experienced an impressive growth record which can serve as a good example to newly established firms. The company aims at offering its clients a fulfilling shopping experience through offering diverse kinds of services in the online market. These include, personalized shopping services, ideal ordering systems, credit systems that are secure and global shipping services. It focuses on client satisfaction rating, business and revenue management strategies. Company vision strategy, Updates on importance of technology, sensitivity to market dynamics such as competition, marketing, experimentation and testing combined with data automation play a key role in the day to day operations of Amazon. Section one Business strategy The company’s main objective is to become a leading online destination on where to purchase, discover and find services or products available online. This is pursued as it continues to expand its brand, broaden customer base and electronic trade expertise to sustain client’s website as a one stop shop not only in the United States but globally. The company upholds the opinion that selling of music, books and other services or products offers beneficial terms to customers. These benefits entail assorted selection, ease of use, convenience, personalization and competitive pricing. A client who logs into Amazon.com is able to access additional services such as conducting targeted searches, buying gift certificates and also to participate in promotions. The key component of the website services to customers include, searching, reviews, content and browsing. Others are recommendations, one click technology and legitimate credit card payment. The firm derives satisfaction from revisits of the website by the clients (Eckerson 15). i. Browsing-First time visitors in the Amazon website are welcomed by various highlighted subject choices and special features put together in an easy to use simple fashion tailored to help in product selection and search.Similarly,the website has assorted products, topical information and services. To enhance shopping experience from clients, variety of products is featured on rotational basis in every store. ii. Searching-Amazon has searchable catalogs which enables its clients interact with their products. There are searchable catalogs for up to forty seven million books, computer games, music CD and other titles. Search is done through key word titles on whatever the customer is interested in searching. This can be used in finding diverse products. iii. Reviews and content. Diverse content are offered in order to increase the customers shopping scope. This also enhances chances of purchases. Contents such as synopses cover art, annotations and also numerous reviews done by customers, authours, editorial staff and artists. iv. Secure payment methods-The Company has put in place a server software which is secure enough to enable e-commerce transactions. The card entails client personal information, address, name and number so that the server is able to detect it through the internet. v. Availability and fulfillment-Most of the products found in Amazon are ready for shipment within 24hrs from the time of purchase. Customers always have the choice to collect their products from delivery points they prefer. Customers are normally able to track the destination of their orders through regular email notification usually by the logistics department. Reducing days of delivery is a core strategy the company uses to maintain continued trust from the customers (Eckerson 12-14). vi. Return policy-The Company gives a 30 day limit from the date of receipt.However, this applies only to those products that are original and still in the same state as they were delivered. Services, products and geographic expansion i) The online firm has been selling books since the year 1995.In 1998, it expanded its base to other products such as the music store subsequently followed by video store and later the introduction of electronic products together with toys. This enabled it become the top online video seller by the year 1998. ii) Amazon continues to broaden its client base and its business scope. The impetus behind this is to make it the number one business destination when it comes to online commerce. In 1998 in the month of August, the company merged with Junglee Corporation and sage enterprises who offers web based calendar, address book and reminder services respectively. The company still has plans continue expanding its base and service offerings. iii) Geographic expansion To expand its geographical presence, the company acquired three extra companies in Germany and the United Kingdom. The companies were then re-launched under the Amazon umbrella brand. This led to increased sales within the third quarter which made Amazon the leading online book trader globally. Section two Marketing and promotion The marketing strategy is aimed at portraying Amazon as the leading brand as an online trader. Marketing aims at increasing client influx to the Amazon website. This is achieved through the quest of building client loyalty, encouragement of repeat purchase and increase in building product access opportunities. Through creativity, the company is able to apply technology in delivering personalized services, products and flexible merchandising. The company uses a number of business development, media and promotional methods in order to make it achieve its goal of reaching out to the clients. Public relations activities also play a beneficial part in marketing the company and this applies with the print media, television and even radio. i) Association program approach The company continues to be felt in the market by its associates programs. This makes associated websites to display products available to various audiences followed by commissions from Amazon.com for orders purchased. These associate websites include Yahoo, America online, Microsoft Corporation among others. ii) Advantage for music and books The advantage program approach increases title sales and visibility from independent authors, artists, publishers and labels. This is a free program which enhances the frequency of independent products to appear more often and prominently. The products can be accessed on a 24 hour basis by potential clients. Section three Customer service The company recognizes that the sustainability of the business depends on the services provided for the customer. For this reason, great focus is given two important aspects which are; i. Repeat visits A customer if served well and satisfied presents a 90% chance of them making repeat visits. This calls for a strong customer care and support system which Amazon posseses.It pays great attention to feedbacks, views and recommendations from its clients. The company has put in place a number of contact systems and email addresses that are active all through the 24 hours. ii. Referrals Satisfied clients are ten times likely to recommend Amazon to their friends, peers and those they interact with. Due to this Amazon strives to its capacity to ensure that every customer who interacts with them is satisfied. In the event of complaints, the customer service team looks into it as a matter of urgency and relevant solution identified within a workable time frame (Thompson 22-24). Section four Warehousing, Fulfillment and Distribution i) The sourcing of the products sold by the company is regularly obtained from a network of manufacturers, labels and publishers. Although the company has its own inventory systems, relying on a number of distributors enables it to fulfill the quest of having broad title selection. The company makes most of its purchases from companies such as Baker & Taylor, Book Group, Ingram and Valley Media. These are some of the top suppliers worldwide and ensure continuity in stock availability according to the Amazon’s records (Thompson 17-19). ii) Use of automated interfaces enables the company to sort out and organize its orders. This enhances purchase and delivery logistics. The company has arranged its operations that the orders from their distributors are shipped and delivered on time. It also has information systems that are customized run by trained aggressive staff that have great acumen in sourcing products that are hard to find and print books. iii) To enhance its distribution capacity, the company leases distribution facility that is highly mechanized. The machines aim at reducing standard shipping duration to target markets such as Western of the United States. The facility at the same time necessities increased inventory by the company which eases faster shipment to customers. Section five Technology i) Amazon has implemented a number of site management, customer interaction, search, recommendation and transaction service systems using a combination of approaches that are licensed by law. There is a continuous focus on the enhancement of development and specialized software specifically unique to its services. More commercialized application is a great area of priority for the Amazon Company. ii) A set of applications are used by the company in validating and acceptance of customer orders. The same applies in the management of tracking and placing of orders from the suppliers. The transaction and processing systems have the ability to handle millions of varying availability status and millions of items. iii) Network managers and system administrators are entrusted to operate the various websites run by the company. This enables continuity in the running of the business which enables transactions to be carried all round the clock without any interruption in the web system. The company employs the services provided by five internet firms both in the domestic realm and globally. . Figure 1.0(showing changes in technology competition coming from other companies). Section Six Factors which are likely to affect future results A number of risk factors if not carefully taken into caution are likely to affect future standings of the company. These would adversely affect business operations. i) Accumulation of deficits and anticipation of further losses Losses emerge from different quarters among different spheres of the company’s operations. Return policy sometimes results to accumulated losses if done in bulk as this reduces the company’s gains. This has previously led to an accumulated deposit amounting to 162.1 million dollars. Heavy investment in acquisitions, promotions and marketing, advancement in technology adversely affects the operation status of the company. Although growth in revenues has been reported, there is no guarantee that this will continue to be the trend as probable competition may emerge from other companies in future (Porter 14-16). Increase in operating capacity in the global market is also likely to upwardly enhance chances of loss making by the company. ii) Future revenues are unpredictable and chances of fluctuations high in the quarterly operating results. The industry is very unpredictable as new things come up on day to day basis. This makes the company only to forecast probable future revenues which may always change depending on the market dynamics. Recommendations The company in order to remain relevant in the current competitive online market should put into place a number of approaches to enable it retain its position as a top shopping destination. These approaches include; a. Adaptation to the ever changing market dynamics. The company should be flexible and ready to embrace changes that come about with time and changes in customer preferences. Market dynamics also entail creative ways to handle competition from emerging markets that may come up with more innovative approaches to challenge their market dominance. b. Market research Market research enables the company be updated on regular basis in regard to customer preferences and new emerging challenges. Market research necessitates going back to the drawing board since technology is a very dynamic and unpredictable field. Research therefore plays a centrifugal role in ensuring a companies continuity and relevance. This is because through research, potential risk factors, customer preferences and relevant technologies are able to be identified (Eckerson 19-23). c. Affiliate marketing The company should increase its involvement with affiliate marketers as this broadens its visibility on the internet platform. Marketing in social networks such as face book and tweeter plays a key role in boosting the company’s brand name. This in return translates to increased customer traffic visiting the Amazon dot.com website. In the same regard, comments emanating from affiliate marketing websites enable the company to review them with the main intention of improving its services. Conclusion Amazon being one of the leading online shopping destinations is driven by various strategies in order to remain relevant and withstand competition. These strategies include business strategies, technology strategies, marketing strategies, Customer service and fulfillment strategies. Business strategies involve how the business is enabled to dispense its services to clients. Technology involves the unique technological applications put in place to enable quality services to customers.Similarly; marketing makes it possible for customers to have constant information about the company’s products. Customer service enables the customer to be treated with decorum with the main aim of encouraging them to make return visits and refer other clients to the site. Works Cited Eckerson, Wayne. Performance Dashboards: Measuring, Monitoring, and Managing Your Business. New York: Wiley, 2010. Print. Porter, Grover. Can the Annual Report be improved? Harvard: Harvard Business Review, 2005. Print. Thompson, James. Business Reporting: Meeting Customers’ needs: An article from: The National Public Accountant. New York: Kindle Books, 2005. Print. Thompson, James. The Ten Best Annual Reports of 1995. New York: Kindle, 2005. Print. Appendix Figure 1.0 (showing changes in technology competition coming from other companies). Read More