Amazon is a global powerhouse that hasits strengths and weaknesses just like every other company. Many people did notthink the company would even stay afloat after failing to become profitableafter the first 4 years.
Bezos proved all of the doubters wrong and believed inhis vision. I think Amazon could thrive for years to come if it stays under theradar of any more public criticism. They have forever changed the e-commercebusiness forever, but will they be able to change their old habits and end therecent bad publicity? Despite the criticism, I thinkthe company is too large and convenient to fail.
Jeff Bezos stated that he would put hisemployees first when it came to business matters when he founded Amazon in1994. As the founder of the company, I wonder how he has let his company sufferso many PR nightmares. From a micro perspective, it is important to instill asense of security and confidence in one’s employees.
If employees are motivatedand driven, they are more likely to produce a superior product. Globally,Amazon does not want to be known as the company that misuses and mishandles itsemployees. They need to take a look into their human resources management andfigure out a solution before anyone else gets unjustly fired. Amazon couldpotentially lose millions of dollars if customers, potential partners, andpotential employees refuse to touch them. Bezos needs to lead the company in anew direction and fix the internal problems they are having before things getworse. In addition to the harsh working conditions,workers have strenuous and exhausting job duties. For example, some workerstraverse the building for almost 15 miles a day with a cart and a handheldscanner picking up orders off of shelves before taking the orders to thepacking department for shipping. Supervisors can even monitor theiremployees’ scanners to ensure that they are meeting Amazon’s excessive standardsof production.
A New York Times article from August 16,2015, explained that the often unfair and intimidating working conditions ofAmazon warehouses extend so far as to force employees to sign lengthy contractsguaranteeing their employment for a period of time. The article also statedthat employees frequently sign contracts preventing them for working orpurchasing products from any other company that might take away business fromAmazon. Such reports lead many people to believe that the list of unfairworking conditions at the company is almost as long as their extensive productline. AlthoughAmazon.com has perfected the art of easy shopping, as well as fast shipping andexceptional customer service, there have been numerous complaints from currentand former employees regarding the treatment of warehouse employees.
In2011 it was reported that a warehouse in Breinigsville, Pennsylvania, hadinside temperatures reaching 100 degrees, which resulted in workers beingdehydrated and fatigued. Managers at the warehouse refused to keep theloading bay doors open to allow air circulation to flow from outside thebuilding for fear of being vandalized. Amazon’s solution to this problem was tohire an ambulance to patrol the warehouse, which led to many people saying thecompany was insensitive for not doing more for the hardworking employees.In September 2017, Amazon revealed thatthey would open a new headquarters in a major American city. Bids for the newheadquarters were to be submitted by city councils from across the country byno later than October 19th, 2017. The multi-billion-dollar building has beenproposed to be anywhere from 500,00 to eight million square feet, and expectsto employ about 50,000 employees. In addition to their global expansion, Amazondevotes a large portion of their profits to philanthropic efforts.
For example,in 2020 the company plans to open a new building in Seattle to host the charityorganization Mary’s Place. As Amazon’s widespread reach extends into othermarkets and different areas around the world, it’s anyone’s guess what theywill do next.With massive amounts of data from WholeFoods shoppers, Amazon will ultimately be able to tailor the grocery shoppingexperience to the individual; similar to online data tracking. Amazon hasalready mastered the process of up selling online through offering additionalitems that go with the items the consumer is looking to buy. Now, with thepurchase of groceries, Amazon will know when you run out of cereal, or anyother item, allowing them to present you with the offer to buy more at exactlythe right time. Amazon will also record data on customer buyer patterns,allowing them to offer or recommend specific items based upon customerpreferences identified through prior purchases. Thecustomer data Amazon will have the ability to access will also allow them tobuild analytical models to be used to predict what consumers will want, howmuch they will want, and when they will want it. While Amazon’s purchaseof Whole Foods provides them with a tremendous amount of data, they will needto use that data to better understand their customer’s needs and predictshopping behaviors.
If they cannot do that, the data becomes useless. If theycan successfully do that, the data can be used to maximize profit margins andminimize expenses.When Amazon acquired Zappos ($1.2B), Twitch ($970M), and Kiva Systems($775M), they were all critical to the success of Amazon’s plan to expand theirbusiness into new and emerging markets. However, the price paid for thesecompanies was insignificant in comparison to the massive $13.7 billionacquisition of Whole Foods Market, a high-endfood market company with over 400 stores. Whole Foods exclusively features foods withoutartificial preservatives, colors, flavors, sweeteners, and hydrogenated fats. The deal was completed on August 28, 2017 and seems to be veryprofitable for Amazon because the market for natural food stores is soaring.
This acquisition makes it clear thatAmazon’s real interest is in two things: the massive amount of consumer datathat will become available after the acquisition, and Whole Foods’ privatebrand product. Amazon’s goal to be a superior brand that touches everyaspect of daily life appears to be coming to fruition. Amazon has also begun to employ dropshippers which has helped their company tremendously. Drop shippers arepartnered with Amazon to advertise their wares on the Amazon website eventhough the drop ship company did not purchase its own inventory through Amazon.This allows Amazon to list products from millions of companies, and in return,Amazon maintains a markup on all products listed that hovers around 75%. AsAmazon continues to grow in size through additional sellers and markets dropshippers will become more common as more and more people will be looking toAmazon as a means of distributing their product to a large number of consumers.Amazon began by focusing on two tiers:business-to-consumer relationships and business-to-business relationships. Theythen moved to help provide customer-to-customer relationships within the Amazonmarketplace, acting as a go-between to facilitate transactions between thirdparty companies and consumers.
The company allows anyone to sell anything usingits platform. Some other large online distributors even use Amazon along withtheir own websites to sell their merchandise. Additionally, Amazon rents outspace for many of their third-party retailers. Small businesses are able tosell their goods to a larger marketplace on a global scale through the use ofAmazon. Amazon’ssuccessful sales model was surprisingly sketched on the back of a napkin byfounder and CEO Jeff Bezos in 2001. He successfully laid out the foundation fora winning marketplace strategy that they would base their entire sales’approach on called the “Virtuous Cycle”. This mindset has driven thecompany’s strategy since the very beginning.
According to Amazon’s founder, thevirtuous cycle begins with providing the customer with excellent service, whichdrives a large volume of online traffic. Happy and satisfied customersattract more happy and satisfied customers, and the cycle continues. Thisbusiness model allows Amazon to make money by leveraging the power of its name,in addition to the efforts of a third-party seller. As Amazon grew, it loweredits cost structure by leveraging purchase, and using fulfillment infrastructureand logistics infrastructure subsequently lowered the cost per unit ofproducts.
The decrease in cost then allowed Amazon to lower its prices toshoppers, continuing to satisfy the need to have the best prices around. Thislow price point, combined with an increased selection, was critical toimproving and maintaining the customer experience that drives the virtuouscycle.Amazon surpassed Wal-Mart as the mostvaluable retailer in the world by market cap in 2015.
Currently it has a marketcap of around five hundred and forty-six billion dollars. The company has madeits fortune off e-commerce and is one of largest sellers over the internet.Amazon started out by selling books online and, as time went on, people’s needsevolved beyond just buying books. They had to add some diversity to theircompany, so they chose to expand their product line by selling videotapes,CDs, books, movies and different types of electronics just to name a few items. Jeff Bezos’s globalization strategy allowed him to expand his businessacross the world, and it paid off. Amazon has a different retail website foreach country that utilizes its services. The list of countries includesIreland, Canada, France, Germany, the United States, Japan, and India, to namea few.
Amazon is a fortune 500 company based out of Seattle,Washington. Jeff Bezos founded the company on July 5th, 1994, but itdid not officially launch until 1995. A report Bezos read claimed that the webcommerce industry would grow at two thousand three hundred percent, and thiswas his motivation for starting the company. Not long after, a company wasfounded because of Bezos’ inspiration and his keen eye for emerging markets. Heleft his job as vice president of D. E. Shaw and Co.
and never looked back. Thecompany name, Amazon, was chosen by Bezos after looking through the dictionaryand falling in love with the exotic nature of the word: Amazon. Amazon’sfounder had huge goals, which were finally starting to come to life. Amazon had around thirty thousand full-time employees in the UnitedStates by 2011, and the number grew to one hundred and eighty thousand justfive years later the company currently employs more than 380,000 peopleworldwide in full and part-time jobs.