Effects of information system and information technology on Amazon.com - Essay Example

EEFECTS OF INFORMATION SYSTEM AND INFORMATION TECKNOLOGY ON AMAZON.COM By Location Introduction There are many ways that Amazon as a company uses information systems and information technology to perpetuate its success. First, an information system is the system that uses information technology in order to manipulate, retrieve, capture or even display data. Information systems serve several purposes which fairly lead to achieving success by a company or a business. Such roles that the information system and information technology play in a business include attaining excellence in the operation of the business, business models, offering services, and also invention of new products, the information system and the information technology has also been a tool to attaining intimacy between the customer and the supplier, for the company to attain competitive advantage and finally so that the business can survive in the business environment. Therefore, Amazon Company seeks to achieve all these advantages through the use of the information system and technology (Mora, Forgionne & Gupta 2003, p. 91). There are other factors resulting from the use of information system and information technology. Such factors include transformation of business enterprises, the fact that the digital firms have emerged, industrial economies have transformed, and a global economy has emerged and thus giving room for a lot of competition. Information systems and information technology enable the where many businesses and companies are competing (Nilsson & Rapp 2005, p. 33). Amazon Company uses information systems and information technology to attain operational excellence and thus its success. The managers of the Amazon use information systems as a tool to achieve efficiency in their operations whereby they achieve a high level of efficiency which lead to the production of quality services and thus leading to high profits in the firm. Amazon tracks all the purchases made and ensures that the products sold are replaced with immediate effect so that not to run out of the products. This has enabled the Amazon to attain success in its business. Amazon, besides using the information systems in advertisement of the goods and selling its goods, especially software, it also looks for better ways to improve their operation in the company (McGee, Prusak & Pyburn 2003, p. 112). In the manufacturing of the new products, business models, and services, Amazon uses information systems. The new products are manufactured and also new services are also offered in the firms. The firm also uses it to create completely new business models. Business models describe the way the company makes its products, what it deals with, how and the methods of supplying or even any service that the firm does in order to create more profits into the firm. In addition, business models are also used to classify a business in terms of the setting of the entrepreneurship and managers use the business models in order to predict the possible traces of development of the firm in the future. Sometimes, business models are also defined in terms of keeping the records of accounting for the purposes of reporting the trend in the firm. Amazon Company has experienced success because of its business model whereby it adopted the web 2.0 versions which incorporated both the networks and the effect of technology (McGrath 2013, p. 43). As a result, the firm got huge amounts of profits in every year just because of developing a platform which was full and blown open which gave support to as many companies demand and also the use of the commerce services on Amazon (Betz 2011, p. 38). The intimacy between the customers and the suppliers enable the company to achieve success in the business. Once the relationship between the customers and the suppliers is good, the company is able to make more revenue and profit. Once the supplier relates well to their customer, the customer will be able to return and make another transaction because of the friendly environment. Therefore, Amazon has acquired its success through the use of the information system and information technology by mending their intimacy with their customers whereby they attend to their customers in a friendly way. Amazon is the leading firm in the online retailing. For a company to attain success in their business they have to poses ability to hold and retain their customers, while denying the customers the access to their competitors (Gelinas, Dull & Wheeler 2012, p. 105). The company should also be able to hike their prices reasonably and the customers should be able to buy their products comfortably. This is what exactly the Amazon does and thus its success. Student customers find several suppliers of text books used in the firms. Therefore the online marketers have an added advantage for students will go to the online textbooks where they find all the categories of textbooks used in college. Therefore, Amazon has an added advantage for the customers and thus promoting its products and services (Bidgoli 2011, p. 78). Amazon uses information system in making decisions that are at par with the market. In the recent past where the information system and information technology was not available, many firms could rely on outdated information which would incur costs on them since the products they made were not according to the demands of the customers. With the use of information system and information technology, the firms, especially the Amazon, improved its decision making plans (Pfeffer 1998, p. 132). The information system and the information technology provided the company with ready facts that is happening in the market and thus it could improve their products to the levels of the demands of the customers and thus it has been able incur many profits hence the success of the company. The managers are thus able to work with real time data from the marketplace. The company, uses a digital dashboard that is web-based which provides complains from the customers, the performance of the products and the information channeled to the managers. The managers are then able to act immediately, proving a precise solution concerning the complaint. Information system and information technology have also enabled Amazon to achieve competitive advantage over the rest of the company. Once the company achieves all of the above advantages brought by the information system and technology, which are the intimacy between the customer and the supplier, the decision making of the firm, the manufacturing of new products, services and the business model that is profitable, the company would have achieved the competitive advantage. Amazon charges the customers, charging less money on superior products such as the online books which sometimes go at free, it also makes very huge sales and huge profits and also it responds to the needs of the customers adequately. It also ensures that its products are based on the demands of the customers. Therefore, Amazon has acquired competitive advantage over the other business firms which has largely contributed to its success. The most significant aspect of the Amazon firm is the shopping system which has been considered to have acquired a good reputation for the company. This service has been very superior to the customers and thus it has achieved a competitive advantage (Schniederjans, Hamaker & schniederjans 2010, p. 38). Amazon has also used the information systems and the information technology to improve its day to day survival. Many firms depend on the information system and information technology to keep their day to day records, to run their daily transactions, to attend to customers and to determine their levels of improvements (Khosrowpour 1999, p. 88). These also drives the firms into the levels of success. The changes should be made to favour the demand of the customers in the market. The firm has also ensured other strategies to ensure its survival in the market. The strategies include the advertisements. This is whereby the company has to ensure that the products the firm deals with is advertised, the company itself is advertised in order to make the company familiar and known to the people. Amazon will be getting about $ 75 billion this year from the book, Bloomberg Businessweek Brad Stone as stated in a report done by JeffBezzos and during his research on Amazon is when he discovered the factors that led to the success of Amazon. Amazon.com has an email which is very active and this email only receives mails from angry customers who give their complaints to Jeff Bezos, the executive founder of the company. The email is jeff@amazon.com. After Jeff Bezos receives the emails, he forwards them to the employees of the relevant fields of Amazon.com and only adds a question mark to the complaints he receives (Boxwell 1999, 89). When the relevant employees receive the emails, they are very triggered and frightened that they only have very little time to attend to the question, availing the answers and making explanations as to why such happened. The answer has to go through a panel of managers so that it is scrutinized and forwarded to the CEO. This is one of the reasons behind the success of the Amazon.com. The CEO ensures that the needs of the customers are critically and fairly dealt with (Porter 2003, p. 146). There was a memorable incident that occurred in 2010 in the department of marketing whereby the CEO noticed an email from customers browsing about the wellness of sexuality considering the lubricating gels and other facilitators of sexuality. The department received the email and decided to offer a promotion to some sites that the customers had logged in and had not made any purchases. The manager of the specific department did not follow the required steps through the promotion made the company rich since they got hundreds of dollars. The CEO had to demand that he should see the manager in person. The fact that the CEO is strict on the employees, efficiency of the services offered and on the way the issues and complaints of the customers has enabled the Amazon.com to acquire competitive advantage (Poirier 2001, p. 98). The CEO of Amazo.com believes that truth is the key to success since it outlines true perspectives and many good ideas. The tradition of the Amazon is quite notorious since they always have to hold meetings whereby they have to argue and to come up with solutions to their arguments which enable them to work in unity and to achieve success. According to Bezos, lubricants were very embarrassing and that the email advertising the use of lubricants should be stopped. On the other hand, the managers fronted by Wilke posed arguments which proposed the advertisements of the lubricants. They argued that lubricants were found everywhere, including in the supermarkets and in stores and therefore it was not quite as embarrassing to send out emails concerning the sexual lubricants and other sexual facilitators and besides, the emails had brought a lot of profits to the company. Eventually, the CEO did not agree with the managers because he could not compromise the trust of the customers (Lewis 2007, p. 121). The issue about the sending out of emails was terminated finally for some of the categories which affected human life adversely. Such categories include personal care and health issues. A central tool was built to examine and filter all the products in promotion. Sensitive products could no longer be promoted. Mangers of various departments could take their products to pass through the central filtering tool to ensure that they do not make promotions on sensitive products. Email marking thus was not done in the marketing of books and the electronics that the Amazon.com sold. The members of the Amazon have to research concerning the views of their customers since they value their views so much. The views of the customers enable the company to realize about the processes they undertake, it is just like making an audit of the work they do. The customers are treated very preciously since they are very essential sources of information to the company (Jackson, Hitt & Denisi, 2003, p. 11). Therefore, the employees at Amazon.com have to be drilled so that they provide efficient services. Conclusion In summation, Amazon is a very successful company that competes with companies such as Wal-Mart store, IBM, and Apple which specializes in making devices. The management of Amazon has also contributed much to its success since all its undertakings are based on the information systems and information technology. Therefore, information system and information technology have elevated the standards of many business firms. For a business to acquire its strategic position in the business and to acquire competitive advantage, it has to ensure that it uses information system and information technology since most if not all companies are using digital technology. The foundation of conducting business today is the information system. Information technology has made it convenient for marketing online, advertising the products of the company and many other advantages that in has made in the field of business. Customers are also able to communicate their complaints to the suppliers and the suppliers are also able to address the issues posed by the customers. Bibliography Betz, F, 2011, Managing technological innovation competitive advantage from change. Hoboken, N.J., Wiley. http://site.ebrary.com/id/10447788. Bidgoli, H, 2011, MIS 2010. Mason, Ohio, South-Western. Boxwell, R. 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G, 2013, The end of competitive advantage: how to keep your strategy moving as fast as your business. Boston, Massachusetts, Harvard Business Review Press. Mora, M., Forgionne, G. A., & Gupta, J. N. D, 2003, Decision-making support systems: achievements, trends and challenges for the new decade. Hershey, PA, Idea Group Pub. Nilsson, F., & Rapp, B,2005, Understanding competitive advantage the importance of strategic congruence and integrated control. Berlin, Springer. http://public.eblib.com/EBLPublic/PublicView.do?ptiID=304658. Pfeffer, J,1998, Competitive advantage through people: unleashing the power of the work force. Boston, Mass, Harvard Business School Press. Poirier, C. C,2001, Advanced supply chain management how to build a sustained competitive advantage. San Francisco, Berrett-Kochler Publishers. http://www.lib.sfu.ca/cgi-bin/validate/books24x7.cgi?isbn=1576750523. Porter, M. E, 2003, Competitive advantage: creating and sustaining superior performance. New York, Free Press. Schniederjans, M. J., Hamaker, J. L., & schniederjans, A. M, 2010, Information technology investment: decision-making methodology. Singapore, World Scientific. Read More