Jeff Bezos, Amazon.com - Research Paper Example

? Jeff Bezos, Amazon.com Amazon was established Jeff Bezos in 1994. Initially, this company was a cyber-bookstore, but nowadays the company became a network of merchant sites. Amazon provided its customer with e-commerce software. Nowadays, there are many partners of Amazon and communication and technologies of Amazon have increased the limits of profits. Moreover, Amazon is positioned as a modern ecosystem company, providing the customers and the partners with numerous opportunities. It is relevant to take into account strategic, management and leadership models of the Company is order to analyze a sky-rocket movement to the Company’s success. Key words: e-commerce, e-books, customers, online business world. Introduction There are a lot of opportunities in the modern business world. The global society blurs different limits and it is very interesting for the modern businessmen, managers and leaders to function in this challenging modern context. Internet is a perfect medium for the modern transactions and it can be a new and a fascinating horizon for implementation of the innovative ideas of talented leaders. Jeff Bezos has gone through thick and thin before he became a successful businessman and a leader. Furthermore, his leadership lesson and management practices are taken into account by the contemporaries as the examples to be followed by the modern businessmen. First challenge In the middle of 2000, Lehman Brothers predicted that Amazon Company is unable to succeed. Bezos had to struggle against negative predictions, in accordance with which his Company should have bankrupted in 2001. Amazon for Bezos is a creative field for realization of his great talent of a businessman, manager and a strong leader. Angel financing was a potential chance for Amazon in 90s. There was a great intimidating factor, which could have prevented the Company from the existence. It was really hard to find investors for the company and its founder had to put all his efforts to promote the interest of potential investors in his Company. Bezos succeeded and dealt with negative analysis of experts and reached positive results. Second challenge Jeff Bezos underlines in his interviews that he is a really happy person and he says that it is necessary to be an optimistic person otherwise no positive results are reached. Risk is a controversial issue for Bezos. He claims that to found an enterprise is rather risky activity and the largest risks should be eliminated at once. To be an entrepreneur is to have appropriate mind for it otherwise it is very difficult to solve different problems and to make different solutions. Bezos tells that he has learnt the importance of self-reliance from his early childhood. Thus, his grandfather told him that it was necessary to rely on oneself and support oneself by one’s own methods and strategies. There is no one around but you to fix a current breakage or to solve a current problem. Moreover, it is relevant to work with an open and a creative mind. A constant search for new opportunities is a perfect perspective for solving potential challenges or business hazards. Jeff Bezos demonstrates his flexible management nature and his ability to adapt new strategies of leadership and management. When Amazon had to deal with financial challenges of the Company in 2002, it should have dealt with more than $3 billion operating losses. Therefore, with respect to the experienced challenges and losses of the Company it is possible to outline the key elements of the Amazon’s business model. The superiority of Amazon in the online market cannot be denied, because Internet was not captured by large book sellers till 1994. Brand establishment of the Company was dependant on advertising. Moreover, a spirit of community is evident on the Web site of Amazon (Isckia 2009, p. 334). The Company publishes different reviews of the customers and provides other interested persons with reliable reactions of other readers. Tastes of their customers are reviewed and the Company is able to process likes and dislikes of their customers. Third challenge Marketing strategies of Jeff Bezos are based on the necessity to increase sales, but he is focused not on financial gains only, but on a high-level satisfaction of his customers. His team worked out the following experiment: they wanted to provide the customers with free shipping, if the price of a product was more than $90. With a course of time free shipping would be available for the customers, who spent $49 and even $25. At the same time, the Company appealed for the customers’ interest in the markets of Minneapolis, Portland and Oregon by providing the audience with TV advertising of their products. So, they had to find out whether it is more profitable to make free shipping of a product or to appeal for the audience via TV advertising. Another strategy of Amazon can be explained in the following way: Bezos invested in different dot-com companies – Pets.com, Living.com, Kozmo.com and others. Unfortunately, these investments of Bezos were unsuccessful. Optimism of Bezos was a key determinant of success, because taking different and difficult measures is a long process. Time changes are very important and evident on the Internet, because a changing and dynamic environment of the Internet brings into numerous ideas and challenging opportunities for the modern online businessmen. Amazon is in the stream of innovative businesses, which determine dynamic nature of entrepreneurial activities. Currently, the Company has 600,000 active seller accounts and more than 900,000 associates. Nowadays the profits of the Company are much higher than it was earlier expected by Bezos. Leadership lessons of Bezos On the basis of recent conversation and interviews with Bezos, the following lessons of leadership can be positioned as the crucially important factors influencing activities of his team. A strategy should be based on service, not gadgets, which imply a constant change of technologies. There is an open road of the Company for “wider selection, lower prices and fast, reliable delivery” (Joshi & Yermish 2000, p. 18). The second relevant strategy is to obsess over the customers. Bezos is focused on long-term view of the strategies in his company. Amazon is not focused on sky-rocket charges, they conduct their moderate policies. Moreover, the customer’s needs are of the main concern for the Company. Further on, the managers of the Company are focused on relevant policies of friendly internal changes. Amazon does not discard an opportunity of failure, because a process of innovations’ implementation is always challenging and a complex one. Bezos claims: “In the old world, you devoted 30% of your time to building a great service and 70% of your time to shouting about it. In the new world, that inverts”(Kargar 2004, p. 102). Starting from 90s and until now, Bezos believes that the modern computer age is innovative and there is a need to take into account potential innovative changes and novelties. Generic strategy of the Company A long-term competitive position was chosen by Bezos in spite of near-term profitability. The Company was focused on profits’ maximization and at the same time it was interested in every individual. A large scope of products and a differentiation of product’s pricing were very important for the customers. The strategy of the company works with respect to other factors: Amazon gained visibility on the Internet; traffic improvement of goods in the Web sites; promotion of Amazon’s revenue and a market share; decrease of losses; improvement of cash flow operation; aiming at profitability; improvement of profits’ growth; positioning Amazon as a profitable business. The competitive factors of Amazon are the following ones: “price, selection, availability, convenience, information, discovery, brand recognition, personalized services, accessibility, customer service, reliability, speed of delivery, ease of use and ability to adapt to changing conditions” (Kargar 2004, p. 102). Conclusion Modern retail channels of Amazon provide the customers with music, DVDs, videos, electronics, computers, camera and photo items, software, computer and video games, cell phones and services, tools and hardware, outdoor living items, kitchen and house ware products, and magazine subscriptions (Whittaker 2004, p. 24). Thus, Amazon has extended the limits of a traditional books provider. From the primary initiatives to be the best online bookseller, Amazon became the world’s leader in trading and providing different services for the customers all over the world. Jeff Bezos became a leading global player on a diversified background of online trading. First and foremost contribution of Bezos in the global online market is his intention to satisfy the needs of every individual and a customer-centered approach, their likes and dislikes are the main concerns for Bezos. References Hershon, R. A. (2001). Telecommunications Management: Industry Structures and Planning Strategies. Mahwah, NJ: Lawrence Erlbaum Associates. Isckia, T. (2009). Amazon's Evolving Ecosystem: a Cyber-bookstore and Application Service Provider. Canadian Journal of Administrative Sciences, 26(4), 332+. Joshi, M. P., & Yermish, I. (2000). The Digital Economy: a Golden Opportunity for Entrepreneurs? New England Journal of Entrepreneurship, 3(1), 15+. Kargar, J. (2004). Amazon.com in 2003. Journal of the International Academy for Case Studies, 10(2), 99+. Whittaker, J. (2004). The Cyberspace Handbook. London: Routledge. Read More