Amazon Digital Channels, Digital Products and Use of Technology - Case Study Example

How has Amazon.com used their digital channels to achieve success? Abstract In looking into the progress that Amazon has made in relation to provision of services through the internet, this study will incorporate various management models that reflect on the basic management structures of an organisation. This will include a keen observation of how technological advances and human resource management affects or generally influences the direction an organisation takes in the process of its growth. Environmental challenges will also be put into consideration as well as the influence of competition to the whole idea of Amazon’s growth. Amazon.com is one website that can be cited to have had a relatively high overall growth rate among internet providers. This study is informed by the success of the website and will thus seek to find out they have been able to achieve their success through the available digital channels. Introduction Amazon .com has had its significant share of contribution to this evolution and revolution mostly through its marketplace websites through which digital material is transacted. One can rightly say that in spite of all the challenges that have slammed interaction through the internet, Amazon has been able to rise above several competitors. In this study, emphasis will be given to the interrogation of what could have indeed led to the successful rise of the organisation. In doing so, this study will apply various management theories and models in relation to all other factors that have to be considered in highlighting the contributors to the success of the organisation. Visualization of Amazon’s Business Model It is notable that Amazon had rightly outlined the challenges that internet marketing provide right from the beginning of its operations. By the time the organization started its operations in 1995 there was not a widespread use of internet in most parts of the world as there is today. Besides, sites that leaned towards providing social media services and like Facebook and Twitter were not available yet in today’s world, their contribution to the whole management structure of organisations’ cannot be ignored. The potential that CEO Jeff Bezos had seen in the kind of trade he was engaging in can best be seen from the outline of the company’s vision statement which is stated as to “Relentlessly focus on customer experience by offering our customers low prices, convenience, and a wide selection of merchandise.” Further the mission of the company to be the “Earth’s biggest selection and to be Earth’s most customer-centric company” can be seen to have had a forecast idea of what the company was supposed to engage in. The company has through the years endeavored to retain consumers who purchase products from their site by winning their loyalty at first interaction. It has further cited that it aims to persistently develop easy to use web models that are also reliable, fast and timely. This visualization is necessary in shaping the direction of the organisation and helps employees and the management to share the focused objectives. Amazon Digital Channels, Digital Products and Use of Technology Amazon has capitalised in the use of digital technology to boost its product base as well as uplift its sales. The records posted by the sale of products through digital channels seem to support the idea that this might have been one of the best innovations to be incorporated in its business’s model. One of the strengths that can be cited to this end is continuous update of Amazon’s technological and technical ability (Humphrey et al. 2003). The use of internet for provision of products is entirely dependent on technological advancement and this realisation may have led the company to direct a substantial amount of resources both human and financial (Kotter & Dan 2002) Kindle is one revolutionary item that has seen the company’s fortune shift greatly. The technology works in such a way that users can access most written materials such as books, newspapers and various journals. Previously, the instrument was designed to serve the U. S market alone but was later deigned to fit the international market and has since been an instrumental part of the organisations’ sales booster. The area serves the company in two ways. First, the sale realised from the sale of these gadgets is a source of revenue for the company while downloading and reading of material online further contributes to the sales that the company records. The management at Amazon realizes that the objectives of the organization could not be realised by entirely depending on the technology that has been developed from within the company alone as this may slow the attainment of laid down objectives. The organisation has thus resulted to using what may be seen as a hybrid that combines internally developed technology knowhow with any outsourced knowledge and experience (Stoner et al. 2003) The emergence of CDS and DVDs has also greatly contributed to the widening of the market and by extension the growth of the digital products available at Amazon’s market place. Music players such as Mp3 have promoted the digital channels by Amazon. In addition Amazon has been instrumental in promotion of films that are packaged in DVDs where the company collaborates with the filmmakers who may produce their own DVDs to be marketed and in some cases; Amazon packages the DVDs before uploading them at the market place. This system is largely anchored on development of information technology. In today’s world there is almost an exclusive dependence on IT systems which are used to connect organizations internally and even to supporting exterior mechanisms. This has helped to reduce the time taken to undertake various activities such as sending of letters and passing general information from one employee to another. There is a bigger role played by the emergence of social media and this has almost entirely redefined the way business is done on the internet. Amazon, for instance has utilized social sites to remain visible. Result of effective Management at Amazon Management theories such as the scientific management model advocates for management practices that target specific objectives where responsibilities and duties are efficiently shared (Wren, 1994). At Amazon, it is observed that there is clearly defined hierarchy of management and employee duty allocation. This is particularly important for the organisation given the large number of employees who perform various tasks both locally and internationally. The effect of such a design in structure of management may be said to have significantly contributed to the organisation’s digital channels success in that it encourages execution of talent and the exercise of freedom to experiment. Digital content provided by Amazon has persistently register impressive results despite the competitive nature of the environment in which the company operates. To some extent, the company’s ideology may be seen as relatively new given that it deviates from traditional methods of marketing. This is challenging in the sense that there are parts of the world and a sizeable population that doesn’t have access the internet. In this regard, conventional ways of selling such as physical presence and conservative human nature presents Amazon with another challenge (Silverman 2000). The company has also segmented into various divisions that individually deal with different aspects of the business. In management, specialisation and division into smaller units such as departments helps to organize and execute business plans (Trist, 2004) Web Analytics Amazon has strategically put in place mechanism to be able to tract the use of different sites by various users. The purpose of such an activity is to get customer response as a way of improving service delivery. Unlike conventional methods of trade where shoppers can obtain sales from physical shops, Amazon’s model is such that there it might not be easy to track the number of customers or prospective buyers who would be interested in various products. Tracking customer through the various available channels helps the organization determine areas where more resources would be required. It is reported that the company has been able to record any activity that a person undertakes within its sites as a way of measuring the frequency of downloads and the sites most visited. Such an undertaking also requires a technologically advanced mechanism and Amazon doesn’t seem to rest at anything less (Story 2007). Role of Diversity in Supporting Digital Growth Amazon’s operation in several countries requires development of accommodative attitudes. This will include appreciation of cultures that will not promptly digest the content carried in Amazon’s websites. There has also been an advantage in that the company has been able to spread and even set up offices in several countries throughout the world. This diversification ensures that the company continuously offers services to people of different cultural background. The human resources at Amazon hail from different regions and are spread in several places in the world. The working condition varies from nation to nation and has to be treated as such. As a multinational Amazon has realised that the success of its business is based partially on its effective integration of multiracial and multi-ethnic strategies that reflect different strengths aimed at specific objectives. To this end the organisation has adopted models where it has divided its operations in regions that are ran by offices set up in various countries. Activities of the organisation are driven by employees drawn from these countries thus ensuring that they bring in their knowledge of the region from which they operate into the actual running of the business (Gomez et al. 2008). This acknowledgement of multi-culturalism is an important aspect in running a successful international enterprise as it dictates how far one can go in provision of content. Analysis of Strategic Planning and Decision Making Processes Organisations must engage in a risky balancing act between planning and cultural aspects as well as their decision making mechanisms. As an operator that works on a global market, planning and decision making for Amazon becomes a central point of consideration. It would be rightfully said that the milestone that have been made in testing new markets and deliberate actions to experiment new ideas are a result of firm decisions. It must be taken into account that Amazons products must not be necessarily acceptable or positively received in all countries. However, the market that exists in these nations is critical in the growth of Amazon’s profit margin and must be attended to and given consideration just like in the other nations where there are better polices and an enhanced environment. For instance, in China, profitably gaining from activities generated through the internet is prohibited yet this is a highly populated country that would provide a wide market (State Council of China 2000). Amazon took over a Chinese website, Joyo.com as a way of setting camp in the nation. This is the length to which organisations may sometimes go to achieve a given objective and it may be seen as one that has significantly contributed to moving Amazon to the level it is. While looking at how effective planning and decision making processes have influenced the performance of various products for Amazon, we must not lose focus of the one of the best performing products of Amazon which also happens to be its launching pad, books. At inception, the company was designed as an online bookstore and it therefore doesn’t come as a surprise that the company continues to thrive as a valued book seller. Effect of Mergers and Acquisitions to Digital Development As part of re-strategizing and repositioning for to capture the interests of the market, organisations may combine efforts in what is commonly known as creation of mergers while some larger companies may buy into smaller ones to be able to advance their market interest (Kotter 2002). Over the years, Amazon has acquired several companies all of which contribute to the growth of the internet market place in various ways. Among these acquisitions are companies such as Audible.com, Bookfinder.com, Reflective entertainment among others. Generally Amazon can be seen as one organisation that has the ability to merge or acquire a company that deals with virtually any type of product .This is because of the company’s ability to provide a broader market place that most of the internet market space. While most of the smaller companies specify in trade of particular items Amazon provides a platform for purchase of almost any item. This underlines Amazon’s ability to command a wider market. Conclusion It has been established that the internet as a market place provides immense opportunities for organisations to broaden their visibility. Amazon has been able to capture this idea and has largely utilised it to the advantage of the company and to the profitability of the organisations. One of the key instruments in making the internet work comprehensively innovation. To this end an organisation must be ready to make substantial investments and in most cases these investments will bring back returns. More so, organisations must apply relevant management methodologies given the widths of its trade. From dealing with employees to handling massive delivery orders, Amazon’s load needs clear strategies to achieve its objectives. It has been demonstrated in this study that there is almost no limit as to how far or well transitions may structure themselves for the challenges that they may encounter in the market. Amazon is one international operator that has helped shape overall internet business. References Gomez-Mejia, Luis R. David B. Balkin & Robert L. Cardy 2008. Management: People, Performance, Change. New York, New York USA: McGraw-Hill. Humphrey A, Costigan P, Pickering K., & Stratford., M 2003, Factors Affecting The Labour Kotter, P. & Dan, S. 2002. The Heart of Change. Boston: Harvard Business School Publishing. Stoner. F., Freeman R. Edward, Gilbert, Jr. & Daniel R. (2003). Management, New Delhi: Prentice-Hall of India. Story, L., (2007), Tracking of web user by marketers gains favors, New York Times Silverman, D. (2000): The Theory of Organization, London, Heinemann. State Council of China, (2000) Measures for managing Internet Information Services, Retrieved 17/04/2012 Trist, E. 2004, A Socio-Technocal Critique of Scientific Management. Organizational as Systems. Milton Keynes, Open University Press: 56-65. Wren, D.A. 1994. The Evolution of Management Thought. 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