Amazon Performance Analysis - Essay Example

? Amazon is an American based multinational company that specializes in number of electronic products through online business and selling. Few of itsnotable products include the e book readers, music players, DVD players and a large array of other electronic devices. The scope is not just limited to electronic equipment; it provides the customers with an online facility for other products as well. Brief history of the Company: Amazon is the pioneer idea of a visionary man Jeff Bezos, who had a believe in his ideas and had the determination to make it happen, he had predicted a large growth in the internet customers over period of time, and much to his predictions, the world wide web is a ubiquitous entity now ,he made it happen in course of year and a half between 1994 and 1995 by going online and establishing a source that would serve people with books online and avoiding them the hassle of going to markets in physical. It was not without the physical labor by the visionary man himself Jeff Bezos who contributed in its physical transportation and other essential activities that were necessary in the beginning. By the year 1997, it saw massive expansion in form of collaborations with few giant players in the industry namely Silicon Valley. The idea behind the name (Amazon): Since Amazon is the world’s largest river and Jeff Bezos had believe in his ideas, he wanted to develop a platform that is worldwide famous and massive in size. Much to his hard work and planning, Amazon has turned out to be the world’s largest online book store. In a period of nearly one year, it made it across the internet as one of the largest and the only online retailer since there were no major threats and competitors at that time. Vision and objectives: The beginning vision was more focused on making it the largest online book stop, but later the circle expansion was considered and it worked on providing products other than just books as well . The vision was focused on “customer centric” policy which would focus on meeting the requirements of the customer. Distinct Groups segregation: While the earlier focus was on online sales only, with time the focus was expanded to customers who were clustered into three groups namely “consumer customers” who are directly associated with the products and services offered by the parent company itself, developer customers who used the technology and resources of Amazon for running their business, and finally the seller customer who used Amazon as a platform to sell their products which were not necessarily the Amazon Proprietary. 1997 letter to the shareholders: Some of the salient points of the letter are: Customers are the focal point Policies would be made keeping in view the long term planning and perspective. Both success and failure would be critically evaluated. The decisions so made would be daring in many ways and this way the new paradigms would be explored through a combination of success and failure from the dare game. 3 pillar strategy: The 3 Pillar strategy has been adopted to accomplish the vision chalked out by the man who started it all Jeff Bezos. These pillars are as follows: Selection: The policy was based on providing the customers with a long list of options in various categories in each of the discipline products that are in the manufacturing capacity of the company. Convenience: Customers are the backbone to any organization and enterprise. Amazon takes this factor in to equal consideration and does all to ensure the customer satisfaction and ease of actions. This is done in form of providing them with many options prior to purchase and order and post order which includes the feedback mechanism. Price: Amazon ensures attracting the customers towards itself in many ways, the price advantage and core competency of reduced prices is part of Amazon strategy. This can be seen in case of the latest e book reader launch Amazon Kindle Fire, which has startled the entire world by its low price. The prices are reduced with no compromise on the quality. The quality remains top class. Besides this, it ensures and promises the customers in time delivery and mostly at lowest costs. Location Layout: Location layout is a strategic decision that has a large impact on the entire outcome of the performance of any organization .Amazon though an online book stop is associated with the transportation and shipping aspect as well. The location layout has been kept in due consideration and across the world in major cities, the delivery points and other stops are located at a strategic position that are most favorable and accessible to the customers. For this purpose, rough 19 million square feet area is occupied and being used for service and product delivery in major parts of various cities. Frustration Free Packaging was an approach in this direction. Work Force: Amazon relies on making use of the capabilities of the personnel available. For this purpose it has recruited large amount of employees and workers over the years. These individuals through their expertise strengthen the areas of logistics, delivery, and other important components of the supply chain. Approach towards Challenges: Amazon has taken up on the challenge of improving its strategic potential and further nurturing of its development capabilities. For this purpose, the focus is concentrated on increasing its presence in various corners of the world in form of different products and services. Amazon aims at increasing its customer bench through acquiring of the state of the art technology, followed by mergers and good relations with rest of the players in the market. For accomplishment of all the above stated, Amazon has embarked on a journey that is in alignment with certain population target and its possible expansion in various forms. 3 words strategy: Bezos, the pioneer terms technology as the secret to the incumbent’s success, and he repeats it three times to re emphasize it. According to this believe, technology has opened many doors for Amazon in terms of reducing the prices and strengthening the corridors of research and further development. Kindle and few of the web based applications introduction were part of the technology drive. IMDB is one of the subsidiaries of Amazon that is world famous for movies information. Large amount was invested in the area of technology the states for two years show the input in this regard. 2008 saw an input of 133 million dollars while 2010 saw a staggering 1033 million dollars being invested in the domain of technology. Competitors: IN the annual report published in 2009, number of competitors were highlighted who existed in various form. Wal-mart and Barnes Noble were identified as the real world competitor retailers while few other e commerce related websites were identified as the competitors in the field. E-bay was seen and highlighted as the potential threat since its profits and results were highly encouraging. Other competitors identified included companies who provide e-commerce services. The competitors highlighting area took into account Apple and Google since both are major players in the market and have large customer bench to their credit. Amazon has already earned itself the name of a world class company and has its roots firmly rooted in number of countries. A company with multi million dollars in reserves and exchange has its web spread across countries from Europe, Asia and its neighboring borders namely Canada. The journey has not been an easy ride journey, rather like any other large organization had its share of tough and rough times, especially in the beginning of the current century in form of its stock rates devaluation and the bubble burst of the technology then. It has had no indemnity from the recent recession that hit the entire globe and its businesses, however Amazon as an organization and its lead team through its policies has ensured that the company goes through tough times and makes out successfully. On strategic front it has been confronted with number of challenges .The management thought it wise to address them and ensure a successful strategy for the challenges faced. Their efforts were focused on identifying and resolving the following issues: The impact of worldwide recession on the company With recent focus on the technological advancements in house, how would it impact the rest of the organization and its other components? How to keep a balance between the customers’ demands and ensure that a particular section of the customers does not get any undue attention which might result in negligence of the other areas in the company? Looking in to future, what should be Amazon’s strategy for next year years and beyond? 2009 onwards scenario: With the global recession impacting nearly every major business in the field, Amazon was no exception to it, however it is being said by many gurus from the world of business, that Amazon has performed far better than was predicted in tough times and has withered the push and impact of global recession in a far better way. The increase in sales has been dubbed as one of the reason for its resilience in these tough times of global crunch. Bibliography: 1- Stockpot, G. J., 2009. AMAZoN case study 2007- 2009, Seattle: Amazon. Read More