Jan 29, 2019 in Business

Introduction

Amazon Inc. is an international e-commerce firm that was founded by Jeff Bezos in 1995, with its headquarters in Seattle, United States. The company started as an online store that sold books but later came towards investing in the ever-growing market of electronics. It sells a wide variety of electronics, music, videos, video games, software, jewellery, foods, apparel and toys. It sails as the largest online retailer in the world, with a number of branches in different countries. It offers shipping in the rest of the countries, where it does not have branches. The company has its own production unit that makes consumer electronics and offers cloud computing services. The company is well-known for producing Kindle e-book readers, as well as Kindle Fire tablets. The company has experienced continuous growth through its history. The growth has been accelerated by its consumer-centric nature, meaning that it sells everything that human beings would require in life at lower prices and convenience. It has transformed the e-market business to a considerable degree and has become a company that one can describe as giving customers what they need. It ventures in technological innovations and advertising techniques that help boost sales of its products. The company handles a very large number of people daily, who comprise of customers and third-party sellers. It also offers a platform for promotions and web services, which help in easing of the access to product manufacturers, databases, as well as search and navigation.

Innovative Business Strategy

Amazon has applied a combination of two strategies in its running. One of the strategies is the innovation strategy, which puts into consideration coming up with new ideas and products. It means that one evaluates the market and the customers' needs, comes up with a plan on the things that they need which are not in the market, manufactures the products or services and delivers them to the client in a way that they have never received in the past (Verity 2012). It can launch an all-new idea and transform it into a profit-making venture by attracting new customers as well as improving the satisfaction and value for the existing one. It mainly happens in the technology industry, since everything is ever-changing, and the needs of the customers are dynamic (Carlopio 2010). The other strategy is a business strategy, which puts into consideration the idea that most of what the customers want is either in the market or was discovered a long time ago. The firm studies the changing needs for its employees and makes an improvement on the existing products and services. It is a strategy that is mainly used in companies that experience a stiff competition in their industries, thus forcing them to come up with a unique way of offering services in a different way from competitors (Stonehouse 2004). There are many companies that venture in exactly the same field as Amazon, forcing it to create a hybrid between the two marketing strategies. It means the company, which relies on metrics in decision-making, has to evaluate on whether a new process will eliminate inefficiency within the firm or if they have to introduce a new feature (Stone 2013).

Amazon Inc. has greatly ventured in transformation and innovative business that keeps on injecting new products to its business. It is what has ensured its continuous growth in sales as well as market share. The company’s growth was accelerated by its whitespace venture, which means shaping a business in a way that effectively minimises the competition, especially in crowded fields such as online marketing. It implemented an innovative business model, which had put in place the idea of improving the existing products as well as the new ones so as to satisfy the customer value demands (Stone 2013). The company started as a simple online bookstore that acted as a warehouse for books in soft form, later improving to incorporate free shipping.

The use of incentives, such as free shipping in most nations and its low prices, has made it a success over its main rivals such as Wal-Mart. Free shipping ensured that customers could make a purchase online and receive their orders at the comfort of their places, and this ensured that the company expanded its market share to cover all over the world. The other competitors did not have such services at first, and this restricted them only to local sales. The low cost has been the centre of attraction to customers as long as the value is not manipulated. The company only ventures in original products and those that are guaranteed by their manufacturers, so that employees can access customer support at any moment.

The company expanded its business with time to include music, software and video downloads. It enhanced its sales to a substantial degree, since people would not have to rely on bulk disks or travel around looking for such software, but would rather make a purchase and download it instantly over the Internet. It could now start selling all sorts of consumable goods, while offering free shipping to all destinations. It later came to develop on its whitespace coverage by operating under commission-based business, where customers would sell their used products to customers within the Amazon platform. Amazon would then gain commission by acting as a broker for such products. It also started indirect sales, where it sold goods to retailers, who initially acted as its competitors, where customers would have easy access (Stone 2013).

The company tends to open up businesses in any field that turns out to be profitable. In 2007, they came up with e-book readers named Kindle under OEM standards, which mean that it wholly belongs to the Amazon, since it is the original manufacturer, and also opened up web services. Kindle turned as one of the bestselling e-book readers, especially among students. It currently has its own brand of tablets as well that go by the name Kindle Fire and also ventures in production and sales of newspaper and periodicals.

Stakeholder Theory on Amazon

Amazon has a wide range of shareholders. This ranges from customers, large investors as well as small organisations. Bezos, Amazon's CEO, is very sensitive, when it comes to complaints from the shareholders. He always demands answers from the manager in the department that led to the errors requiring attention and all those in its line must give reports pertaining to how the issue arose and what they are doing to curb it. He receives customer complaints positively and employs the ideas in improving their products and services and also in order to know the things that they need, which are not currently offered at Amazon. A good example is when customers were not pleased with receiving email advertisements, whenever they viewed certain products at the website (Stone 2013), and the manager in charge had to take immediate corrective measures.

Amazon has faced complaints pertaining to working conditions in the past, especially in warehouses, with the Pennsylvania being the leading warehouse. The workers had threatened to quit their jobs at the company and look for jobs elsewhere. The top management moved to improve the working conditions for both its employees and clients. Employees are vital shareholders that should be provided with proper working conditions, so that they can deliver the expected results on time and get the motivation on their work. In 2012, for example, a portion of workers complained about working conditions and a better treatment at work. To respond to this, Bezos committed himself to spending $52 million in improving the working conditions by fitting air conditioners to the warehouses.

The company provides its products at lower prices as compared to its competitors, while at the same time offering discounts, incentives as well as offers to its customers. In the same year, for example, Jeff Bezos gave a relief to the customers by announcing that over 145,000 e-books could be borrowed at no cost on its website. It was to mark an increase of 41% during the previous year. Amazon concentrates much on customers' interests and has even gone further to conduct surveys on regions and their needs. According to the manager of the Amazon Green Program, Lakshmi Nidamarthi, the company found out in many of its researches the run for green products by the customers in 2011,which prompted it in incorporating more of green products in its sales. It also keeps customers on track by providing periodicals as well as newsletters that customers and other stakeholders can read on the progress of the company.

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The company puts into consideration the society, which should be a key stakeholder in every business that the company invests. The company is known to support the society’s development despite its constant complains about the tax payment. The company has in the long-run donated large amounts of money towards society activities, with examples being the donation of $15 million to Princeton, $20 million on expanding the Museum in Seattle (its headquarter) and $2.5 million in support of gay marriage campaign in the United States. It creates a good relationship between the firm and the society, which forms its backbone of workers as well as clients.

Amazon has not neglected competitors as being an important part of the business. It evaluates its weaknesses comparing itself with other competitors and comes up with methods that can help it in achieving better operations than that of the competitors. It is one of the reasons that led to the establishment of supply chains where it joins with other companies to sell its products indirectly to its customers. It benefits by increasing sales as well as gaining commission from the sale of the products, while at the same time neutralising competition.

Amazon has always declined providing some of its information to its stakeholders, despite excelling in other fields of customer satisfaction. According to Ritch (2009), the firm has always declined to provide information on its greenhouse gas emissions from its warehouses and manufacturing units. It has also been numb on the amount of kindle tablets that it produces despite many requests arising from different stakeholders (Ritch 2009). It has not been giving clear figures on its environmental impact despite suggesting that it has gone greener in its products and for the sake of its customers. It has made an impression by adopting a change in its packaging by shifting from plastic cases and air-bubble wraps to adopting new environmental solutions. This was as a result of complaints and dissatisfaction from its customers and not its environmental-sensitivity nature. The company risks losing trust from its customers as well as the public by barring them from accessing the information that they request.

Model

Amazon employs a business-driven model. It is because it puts more emphasis on its products and improving them, rather than coming up with new ideas (Haag, Baltzan & Phillips 2006). There are few innovations in the firm, and the latest development has been on the technology industry, where its competition is high. The firm currently manufactures electronics such as Kindle e-book readers and Kindle Fire tablets. The introduction of the product came as a result of the firm realising that electronics market is growing fast; thus, it took a hand in getting its own share. The tablets have an advantage over most from other companies, since they are cheaper and purchasing them comes with benefits in that the owners of Kindle electronics have free access to some products that other users have to pay for. The company established its own company to manufacture its products so that they will gain originality. The company was established in mid 1990s, when the Internet had just been found. The projection and prediction that the online marketing will shoot with 4-figure rates is the reason why Bezos ventured into the field. The innovations had already been made, and what he had to do was only start up his business and customise it in a way that was unique.

The company values much of what the customers say in their feedback. The information they receive is vital as it helps them in making improvements to their services in a way that will satisfy the needs of the customer. It means that the company mostly acts, when the need arises and when an issue is raised pertaining to the improvement of a certain product. The company also uses emails in its advertisement where customers get emails upon viewing certain products. They do not consider whether the customer will like it or not, provided the intended message is conveyed. The messages are part of its strategies, and this brings high income to the firm. The company also advertises itself in other websites, especially the social networks, where the message can easily reach its target.

Amazon Inc. mostly acts upon its customers' needs immediately a complaint is forwarded, which explains the reason the managers and employees have to halt their activities to attend to the customers' preferences (Stone 2013). The adoption of its products, however, has always received a positive response from the clients. An example is Kindle e-book readers that sold over half a million copies in their first year, in the market.

How Bezos has Sustained Innovation in the Firm

Bezel introduced the company when little was known in relation to the Internet and technology world as a whole. His leadership and knowledge have assisted the firm in climbing the ladder to become the best in its field. He offers innovative leadership (Adair 2005). He started as just a bookseller, twisting it and upgrading every section to make it a hub for online business innovation. That explains the reason that the business has been able to introduce free shipping of its products overseas. He employed the innovative business model to ensure that his business was always a step ahead of his competitors, which helped him in overcoming the dot-com bust of the mid-1990s (Stone 2013). He introduced another option of countering competition by ensuring good relations with competitors, while at the same time selling some of their products so as to gain commission. Amazon sells almost all models of tablets despite them being a threat to its Kindle fire tablet. It also incorporated sale of used products, where one buys from stores, and the company will pay the supplier after deducting an agreed portion of the commission. The decision to produce electronics and also under OEM basis ensured that the company retained originality of its products as well as increasing its market share and range of products.

Bezos is known to embrace new developments as well as improving on the existing ones, where he extracts value from existing businesses as well as launching new ones. He likes venturing in a wide variety of products, and at one time, he acted in a surprising way, when he purchased the business operations of the Washington Post newspaper with the aim of reviving it. He also ventures in a rocket ship company, which works hand in hand with the whole of Amazon Inc. in a mutual way.

Conclusion

Amazon Inc. is a company that invests in the technology field and that has been in innovation shortly after the establishment of the Internet. The company operates under its founder and CEO, Jeff Bezos, who has turned out to be among the most innovative and successful businessmen in the world. It experienced continuous growth since its establishment and growth in that it currently covers close to twenty nations and with shipping services all over the world. The strategies of the management and the value that they place on the customers' feedback are among the main factors that have ensured the expansion and continuous growth in its operations as well as its products.

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