WordPress.com



Environmental ComplexityJay SamuelUniversity of Alaska FairbanksAbstractThis document answers questions regarding environmental complexity experienced by , Inc.?Sectors analyzed include industry, raw materials, human resources, financial resources, market, technology, economic conditions, government, and sociocultural and international environments. ?In addition, international diversity, complexity and unpredictability of the organizational environment, and where the organization is aligned in terms of environment, strategy, and organizational goals are explored. Propositions for increased organizational efficiency are also described. How turbulent is your company's environment and how well do you believe that they adapt to it?Amazon’s position as an e-commerce and consumer goods retailer exposes it to a highly turbulent environment. Due to the direct-to-consumer nature of the retail industry, and the way that consumers shape how goods are delivered, businesses in this industry must constantly evolve to meet the ever-changing demands of the market. In recent years we have seen the demise of companies unable to adapt to these changes, such as Sports Authority, Blockbuster, Sears, and Toys-R-Us. Despite the turbulent nature of this industry, according to De Brabant, “Global retail is growing at an average annual rate of 6% over the last five years. Even in North America, retail sales figures indicate a sector of the economy that is healthy and performing well… retail in both Canada and the U.S. has seen average growth rates of over 4%.” (De Brabant, 2018). The turbulence is weathered by companies who can work convenience and experience-based shopping into their operations. While Amazon doesn’t offer the traditional shopping experience in the same sense that brick-and-mortar retailers do, they have done an excellent job of meeting those needs. Millions of products are aggregated onto one website, where the process from shopping through checkout operates smoothly and easily, and the experience is catered to individual consumers through algorithms that analyze past purchases to make product recommendations. Amazon has shown consistent growth in revenue in recent years and are positioned as an industry leader; their dedication to serving the customer above all else is what allows them to adapt to the turbulent retail environment so effectively. Section 1IndustryMajor CompetitorsAlthough Amazon carries out the majority of its operations through its online sites, competition comes in the form of both e-commerce sites and traditional retailers. Brick-and-mortar retailers that compete with Amazon include Best Buy, Target, Walmart, Costco, Kroger, Office Depot, Walgreens, Home Depot, Big Lots, etc. Other e-commerce retailers that operate competitively with Amazon include , AliBaba Group, ., and eBay. Many traditional retailers have also developed significant online presences in recent years (such as Walmart) to directly compete with Amazon in the e-commerce space (Bhasin, 2018). CompetitivenessThe retail market is dictated by consumer purchasing behaviors, and Amazon has maintained dedication to consumers since their inception. Amazon states, “We seek to be Earth’s most customer-centric company. We are guided by four principles: customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking.” (Amazon, 2019). This dedication manifests in ways such as lowest-priced products, impeccable customer service, fast and efficient order processing and delivery, and incentives to maintain customer loyalty such as Amazon Prime. Amazon has demonstrated a commitment to their customers, which directly correlates to Amazon’s strong growth and continued placement at the top of the retail industry. Additionally, Amazon has been given numerous awards which further reflect their success in customer service, including: #1 2018 Top Company - LinkedIn, #1 Company - American Customer Satisfaction Index (8 years running), #1 2018 World’s Most Valuable Brand, and many others (Amazon, 2019). ?Industry SizeRetail is a massive industry, growing from $22 to $28 trillion in annual sales worldwide, over the last 5 years (De Brabant, 2018). Retail sales directly interacts with most of the world’s population, due to the needs that are met by the goods sold through retail markets. The industry is characterized with massive competition, because of low barriers to entry. Starting a retail business does not entail comparatively large financial or technological investment (i.e. mom-and-pop stores), and this industry exists anywhere there is a developed population. Related IndustriesSince most of Amazon’s sales result from North American operations, their International segment could be considered a separate industry, as the nature of these competitors can differ depending on the needs and culture of foreign locations. Examples of strong foreign competitors include Tesco (English grocery/general retailer), Otto, Alibaba, , and Flipkart. (Bhasin, 2018). Not only does Amazon operate in e-commerce retail sales, but they also compete in the media industry through Amazon Prime’s inclusion of music and television/movie streaming content. Their competitors in this industry include Netflix, iTunes, Google, Hulu, Spotify, and cable companies, both in the domestic and international markets. Lastly, Amazon operates Amazon Web Services, which competes with companies such as Facebook and Google, Oracle, and Accenture (Segal, 2019).Raw MaterialsSuppliersAmazon’s position as a retailer makes it highly dependent on suppliers to maintain the ability to sell consumer goods. Amazon contracts with vendors to purchase items, which are then stored in fulfillment centers until purchased by consumers. Not only does Amazon work with large scale vendors, where the products are purchased and sold by Amazon, but they also incorporate significant third-party selling, where merchants list their products on the website and either ship them to customers themselves, or to Amazon, who then final-processes the products to consumers (Fulfillment by Amazon). According to Amazon, “half of the items sold on are from small business and entrepreneurs.” (Amazon, 2019). ManufacturersManufacturers of consumer goods play a significant role in Amazon’s operations, as explained above. Amazon works with these manufacturers to be able to list the same products on their website that would be found at a traditional retail store, and it is easy to find name brand items on Amazon alongside third-party items. Amazon’s commitment to low-cost selling is made possible by direct relationships with manufacturers and vendors of these products, and the quantities that are purchased and stored in Amazon fulfillment centers (Amazon, 2019). In addition to working with outside manufacturers, Amazon also sells products that are manufactured and branded internally to the organization. Examples include Kindle, Amazon Alexa, Echo, and Fire TV product lines, and these products continue to be some of the best-selling products offered on the website, among all manufacturers Amazon uses (Bezos, 2018).Real EstateAmazon operates mostly as an e-commerce retailer, and the majority of real estate leased or owned is in office buildings and fulfillment centers, with a small expansion recently to physical storefronts (through Amazon go stores and Whole Foods Market stores). Between these types of buildings, Amazon lists 167 million square feet in North American facilities, 71 million square feet in international facilities, and 14 million square feet associated with Amazon Web Services. The square footage numbers for these properties will continue to grow in the future, as Amazon establishes a second headquarters in Virginia, and continues expansion of its physical storefronts and fulfillment centers domestically and abroad (Amazon, 2019). ServicesIn addition to the selling of products on their website for third-party merchants (Fulfilled by Amazon), the main services that Amazon offers fall under their Amazon Web Services business segment. AWS is a $20 billion in revenue segment that “serves developers and enterprises of all sizes, including start-ups, government agencies, and academic institutions... which offers a broad set of global compute, storage, database, and other service offerings.” (Amazon, 2019). These services include working with developers on machine learning software, and advertising services as well.Human ResourcesLabor MarketAmazon’s focus on customer obsession carries from top leadership down through the organizational hierarchy. According to Jeff Bezos, their commitment to operational excellence is possible through the acquisition of skilled employees, who are held to high standards upon arrival and maintain those high standards continuously. In fulfillment center employees, data center software engineers, and corporate management, high standards are maintained through the hiring process and employee training and further applied to the operational processes where the employees are at work. Employees also have opportunities to pursue higher education and certification while employed at Amazon, through a program called Career Choice where Amazon will help fund the costs of these ventures for those who want to gain additional skills (Bezos, 2018). Employment AgenciesAmazon lists employment opportunities available directly on their corporate website, in a variety of groupings. People seeking employment with Amazon have the option to search by location, teams (Advertising, Amazon Alexa, Finance, etc.), or job categories, such as Data Science, Merchant Development, or Economics (Amazon, 2019). UniversitiesNot only do Amazon associates make trips to campuses across the nation, they also support STEM and computer science programs through universities due to the importance of those majors in Amazon employees. Amazon lists internship opportunities for students at international locations directly on their website, and post-graduation employment opportunities as well. Amazon also describes the steps that are used for their employee selection process on their Amazon.jobs website, so that candidates have an idea of what to expect when applying. For those already employed at Amazon, the Career Choice program is a method for achieving higher degrees and certifications, even if they are not relevant to the current job held (Amazon, 2019). UnionsCurrently, Amazon does not support unions and considers other offers (such as the recently touted $15 company-wide minimum wage) to avoid workers unionizing. Financial ResourcesStock MarketsAmazon is listed on NASDAQ as AMZN. The initial public offering for this stock occurred on May 15, 1997, at a share price of $18. The current share price for AMZN is $1607.95, as of February 15, 2019. As of January 23, 2019, there were 2,315 shareholders of common stock, of which there are 507 million shares outstanding. Amazon has never paid dividends on common stock, and there are 500 million authorized shares of preferred stock at $0.01 par value (Amazon, 2019). BanksAmazon uses long term notes in the process of acquisitions, such as Whole Foods Market, with variable lending rates and repayment terms. As of December 31, 2018, Amazon had $24.3 billion of notes outstanding from their creditors. The financial statements do not list the firms through which these loans have been acquired, only terms and valuations (Amazon, 2019). Private InvestorsAccording to financial statements, Amazon appears to gain funding only through long term bank loans and the purchases of shares of AMZN common stock. MarketCustomersCustomers are the paramount focus of everything that Amazon does in its operations. Jeff Bezos knew when the company began that customer loyalty drives success above all else, and Amazon strives to maintain this customer loyalty through low-priced products, impeccable service, massive diversity in products offered, speedy fulfillment, and membership benefits associated with Amazon prime. Customers of Amazon vary in demographics and have expanded into the global market with Amazon websites in many European countries. Additionally, Amazon Prime just crossed 100 million active users in the United States, 13 years after it was unveiled in 2005 (Bezos, 2018). Individual consumers, families, and businesses are all potential customer types for Amazon, depending on the products that are needed in each case. The possibility for a person anywhere in the world to become a customer of Amazon is only limited by whether Amazon ships to their location, which increases in likelihood year after year.ClientsAmazon Web Services has the capability to be utilized by a near-unlimited number of businesses or organizations. On the AWS website, they list products and business solutions offered for easy navigation, with category examples including blockchain, data storage, virtual reality, machine learning, robotics, and analytics. Current clients that Amazon works with have success stories described on the website, with notable businesses including 3M, Intuit, Brooks Brothers, General Electric, and Philips. The flexibility of AWS and its capabilities in both software and hardware allow it to be incorporate into many different use cases for different types of organizations (AWS, 2019). Potential UsersAs Amazon continues to build out the capabilities of their AWS segment, more and more global organizations will be able to benefit from using their solutions. Potential individual customers or Prime members will increase in number as well, as Amazon opens more fulfillment centers or even physical storefronts in international locations. A good example would be India - Amazon is the fastest growing marketplace in India, and more Prime memberships were added in the first year of operations there than in any other country (Bezos, 2018). Continuing trends such as these with further expansion outside of the United States will make Amazon’s customer base near limitless.TechnologyTechniques of ProductionTechnology is one of the biggest facets of Amazon’s operations and carries through all parts of their supply chain and fulfillment process. Amazon operates over 175 fulfillment centers worldwide, and the customer order process works as follows. First, products arrive at a fulfillment center and are sorted into Amazon-sold or Fulfilled By Amazon storage (for third party sellers). Random storage then occurs, where products are stored throughout the warehouse to increase proximity to a worker at any given time. Once an order is placed, pickers navigate the warehouse to collect the products that a customer has ordered (from locations that are detailed in the computer system). Orders are then packed, labeled, and sent to shipping trailers which are determined based on location. Customer orders are then shipped out by truck, plane, or independent contractors who work with Amazon to handle the massive quantity of orders needing fulfillment. The method of shipping is determined by proximity to fulfillment and sort centers, delivery speed, and the carrier who will be bringing the product to its destination (Amazon, 2019). Computers/Information TechnologyAs mentioned previously, AWS employs massive amounts of IT between its data centers, to meet the needs of the diverse clientele that Amazon serves. Additionally, computers and IT software are utilized within Amazon fulfillment centers for product management (tracking location and storage of items), robotics, and lean operational practices. In Amazon fulfillment centers, robots work alongside human workers to unload and store arriving products, transport heavy pallets throughout the warehouses, and otherwise carry out tasks that are deemed tedious or unsafe for human employees. These robots have been operating in Amazon fulfillment centers since 2012, which has necessitated over 300,000 global jobs in IT and engineering (Amazon, 2019). Additionally, lean practices are in place at Amazon to eliminate wastes and inefficiencies in order fulfillment. Kaizen groups identify and solve problems, customer service agents have autonomy to remove product listings from until defects can be addressed, and third-party merchants have a strict three-strikes rule for product defects before their relationships with Amazon are terminated (Onetto, 2014). E-CommerceAmazon’s focus on its consumer website means that resources are always being allocated to enhance the consumer experience. Between all their global sites, over 3 billion products listings are offered (ScrapeHero, 2018). Servers are created with redundancy to limit or eliminate the possibility for website crashes or failures during times of high traffic. Amazon is constantly expanding its websites to new countries and foreign markets. In the United States, certain cities have the option to select “same day delivery” at checkout, and orders are fulfilled by robots or drones in residencies within close proximity to a fulfillment center. While competition in the E-commerce market has increased over the last few years, Amazon maintains a position of growth and has a positive outlook going forward. Economic ConditionsRecessionAmazon was one of the internet-based companies to survive and thrive through the dot-com bust at the turn of the millennium and has shown significant growth since. Additionally, Amazon thrived during the housing market crash of the late 2000s, with revenue and profit growth continuing throughout the recession (Johnson, 2009). While consumer spending does decrease during economic recession, Amazon operating in the retail industry isolated it more from the effects than construction and housing/real estate industries. The nature of the products Amazon sells (consumer staples and consumer discretionary products), and the diversity of products that they offer, both including third-party products and Amazon products such as the Kindle, help to insulate this company from the effects of economic recessions. Unemployment RateIf a higher unemployment rate dictates lower consumer spending, then Amazon may need to reflect changes to maintain profitability, such as laying off workers, but as mentioned above, their operation in the consumer staples industry isolates them from these affects more than a company who contracts directly with the government and has a fixed budget. Inflation RateCosts of goods sold increasing due to inflation have the potential to result in price increases on Amazon’s website. Product listings change prices millions of times a day, and the algorithms that dictate prices at which Amazon sells their products would reflect any inflation rate changes (Amazon, 2019). GrowthDespite struggles with profitability, Amazon has experienced consistent revenue growth during the 2000s and are poised to continue growing for years to come. Both Zack’s Investment Research and Gurufocus place Amazon as a growth investment in terms of stock and financial performance. The only issue Amazon may see is the law of diminishing returns - a company can only grow so big, so their continued expansion into international markets and high performance domestically may result in slower growth as they reach a “limit”. While revenues will continue to trend upward, the rate at which they increase year-over-year will likely slow down. GovernmentCity, State, and Federal LawsAmazon fulfillment centers, data centers, and corporate offices are all subject to the laws of any cities, states, or countries in which they are located or conduct business, and these laws may vary greatly in structure and enforcement by country or region. RegulationsAs described in Amazon’s 2018 annual report, “We are subject to general business regulations and laws, as well as regulations and laws specifically governing the Internet, physical, e-commerce, and omnichannel retail, electronic devices, and other services. Existing and future laws and regulations may impede our future growth.” (Amazon, 2019). These can entail things such as taxation, privacy, anti-trust regulations, pricing, data protection, copyrights, environmental consumption and waste, and many other factors. In countries with information censorship and control, such as China, Amazon may need to modify its business operations in order to comply with the local regulations. Due to the inclusion of third-party merchants within Amazon’s website, they could even be held liable for fraud or otherwise unlawful activities carried out by these third parties. TaxesAmazon is subject to income taxes in the U.S. (state and federal), and the numerous foreign jurisdictions in which they operate (Amazon, 2019). Legislation such as the U.S. Tax Act of 2017 can impact the way that Amazon records and pays taxes, and guidance from the IRS, Treasury Department, and other governing bodies will be sought going forward. Amazon also utilizes tax credits and allowances to carry-forward from years of operating losses. In 2018, provision for income tax and cash paid for income tax was $1.2 billion, with a loss carryforward of $627 million and future tax credit of $1.4 billion that can be applied to future tax liabilities (Amazon, 2019). The tendency of Amazon to seek out and utilize these tax benefits has led to controversy in recent years, and even investigations by UK tax agencies regarding the exploitation of tax “loopholes” and not paying high enough income taxes (Hickman, 2012). SocioculturalAgeAmazon does not appear to market to certain ages specifically, but rather applies marketing tactics appropriate to different age demographics in order to capture the largest number of consumers and market share. Values/BeliefsAs stated previously, Amazon is “guided by four principles: customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking.” These tenants were established with Amazon’s inception over twenty years ago and continue to guide its operations to this day. They affect all aspects of Amazon’s operations - customer obsession drives product offerings and recommendations, fulfillment center efficiency, and customer service friendliness and helpfulness, to name a few examples. Amazon is a strongly value-driven company, and it is apparent that a commitment to an established set of values pushes their success and growth forward. Additionally, CEO Jeff Bezos attaches a copy of the 1997 Letter to Shareholders to every consecutive annual report (1997 was the first year Amazon was a publicly traded company), to remind readers of the path that Amazon has taken and reinforce the values established originally. (Amazon, 2019). EducationThrough campus outreach and collegiate partnerships, Amazon associates support STEM and computer science programs. These fields are important to the success of Amazon, and a large portion of Amazon employees (software engineers, IT technicians, etc.), have backgrounds in these fields and utilize them every day. The Career Choice program is a method for achieving higher degrees and certifications, even if they are not relevant to the current job held, for employees who have at least one year of tenure at Amazon (Amazon, 2019). ReligionReligion does not appear to be a factor in the operations of .Work EthicA strong work ethic is a core tenant of Amazon’s hiring practices and operations, and it is due to this strong work ethic that fulfillment centers can operate with such prowess and speed. Constant improvements are sought in warehouse processes, and employees are encouraged to find problems and work to identify solutions. Jeff Bezos states that during interviews, he tells potential hires “You can work long, hard, or smart, but at you can’t choose two out of three” (Bezos, 1997). While Amazon is not always an easy place to work, success is built on the backs of hard-working employees and they are recognized for their efforts. Consumer and Green MovementsAmazon is constantly working to address criticisms and controversies from employees, media, or government officials. Top-down commitments such as a $15 minimum wage, made to address negative perception of Amazon’s treatment of fulfillment center workers, is a good example. Further scrutiny regarding Amazon’s performance and size is to be expected, as Bezos states, “I think all large institutions should be scrutinized and examined. It's reasonable. And one thing to note about is that we have gotten big in absolute terms only very recently...in the last 8 years we've gone from 30,000 employees to 560,000 employees.” On the green front, Amazon is making strides, and has set a long-term goal of achieving 100% global renewable energy usage in the future. Current projects include Amazon Wind Farm Texas, which utilizes 110 turbines to generate over 1 million megawatt hours of clean electricity annually and plans to host solar energy capabilities at 50 fulfillment centers by 2020. Amazon facilities are designed with energy efficiency and sustainability in mind, over 55% of Amazon employees at the Seattle headquarters commute to work without a car, and the implementation of “frustration-free packaging” over the last 10 years, coupled with employee suggestions for packaging improvements, have saved over 500 million shipping boxes, or 244 thousand tons of shipping materials weight (Amazon, 2019). InternationalCompetition from Foreign FirmsIn all countries where Amazon operates, they are exposed to competition by both large-scale organizations, and local competitors. While Amazon has experienced successful growth in the U.S. market, especially as a first-mover into the e-commerce industry, which was not previously occupied by traditional retailers, their entry into the global market came later which allowed significant competitors to establish an overseas presence. Amazon operates as a global retailer, so they can expect to sell alongside competitors in any new market they enter. Entry into Overseas MarketsCurrently, Amazon operates facilities in North America, Latin America, Europe, and parts of Asia. Their international websites operate in tandem with international fulfillment centers to provide a wide range of products to consumers outside of the U.S. The expansion into new foreign markets and development of existing foreign markets represents a significant opportunity for growth for Amazon, but not without associated risks. As stated by Amazon, “In certain international market segments, we have relatively little operating experience and may not benefit from any first-to-market advantages or otherwise succeed. It is costly to establish, develop, and maintain international operations and stores, and promote our brand internationally. Our international operations may not be profitable on a sustained basis.” (Amazon, 2019). Foreign Customs & RegulationsAmazon’s success in the American market doesn’t always translate to foreign success, due to cultural differences observed by the consumers and businesses alike. Amazon states, “Local companies may have a substantial competitive advantage because of their greater understanding of, and focus on, the local customer, as well as their more established local brand names. We may not be able to hire, train, retain, and manage required personnel, which may limit our international growth.” (Amazon, 2019). While it is the goal of Amazon to expand to foreign markets and utilize experts and consultants to ensure the success of that expansion, nothing is guaranteed to transfer equally. Additionally, regulations in countries such as China and India regarding information censorship and business ownership, while currently observed by Amazon, could change in the future and limit the growth potential of Amazon in these markets (Amazon, 2019). Exchange RatesAmazon’s global presence exposes it to significant exchange rate risk, with foreign currencies strengthening or weakening against the U.S. dollar. The increase in investment in global markets increases Amazon’s inherent risk. Additionally, “our international stores and product and service offerings are exposed to foreign exchange rate fluctuations. Operating results may differ materially from expectations, and we may record significant gains or losses on the remeasurement of intercompany balances...We also hold cash equivalents and/or marketable securities in foreign currencies including British Pounds, Euros, and Japanese Yen. If the U.S. Dollar strengthens compared to these currencies, cash equivalents, and marketable securities balances, when translated, may be materially less than expected and vice versa.” (Amazon, 2019).Section 2Is the organization international diversified?If yes, where are they currently (regional or by country, could be broken down by product distribution or brick and mortar locations, etc...?Amazon was founded in the United States but has since expanded operations globally. Currently, the countries they have facilities in include: Colombia, Mexico, Costa Rica, Brazil, Germany, the Netherlands, Italy, Spain, the United Kingdom, France, Slovakia, Belgium, Romania, Ireland, Scotland, Poland, Sweden, Finland, Luxembourg, the Czech Republic, Wales, Switzerland, South Africa, Egypt, Israel, Turkey, Morocco, India, China, Japan, Hong Kong, Singapore, South Korea, Taiwan, Australia, and New Zealand. (Amazon, 2019). Who are their major competitors?Amazon experiences competition from small- and large-scale foreign competitors, with notable examples including Tesco (English grocery/general retailer), Otto, Flipkart, Alibaba, , Baidu, and Tencent, the last 4 of which have prevented Amazon from gaining a significant foothold in China (Desjardins, 2018). Alibaba could be considered Amazon’s biggest competitor outside the United States, as they have also experienced significant expansion outside of their domestic market (China) and are directly competing with Amazon to capture market share in countries such as India and Australia (CBInsights, 2018).What markets should they expand to?Amazon should continue to bolster the markets that have demonstrated significant success or growth potential already, such as India. Focusing efforts on countries such as China which already have significant presence from larger competitors seems to risky a venture with not enough growth potential. Amazon should be encouraged to build out their fulfillment centers in Europe/Eurasia in order to serve a larger consumer base and given the success of Amazon Go stores and their Whole Foods Market acquisition, the possibility of physical Amazon stores in European markets seems to be a promising one. Section 3How complex and unpredictable is the organization’s environment?ComplexityAmazon operates in a complex environment, which is described by Daft as “one in which the organization interacts with and is influenced by numerous diverse external elements” (Daft, 2016). Amazon utilizes multiple significant technologies for their consumer website operations, from running the website itself, to tracking and managing inventories in fulfillment center, to monitoring and fulfilling customer orders once place. With the addition of AWS, the technological implications are vast and represent significant complexity for which Amazon must employ many software engineers and specialists to manage. Amazon is also heavily reliant on thousands of suppliers, through third party merchants or direct to Amazon vendors. The expansion of Amazon into international markets has significantly contributed to its environmental complexity, as the number of suppliers, competitors, and customers have all increased which present additional challenges that Amazon needs to mitigate in order to be successful in these markets. (Amazon, 2019). UnpredictabilityThe environment which Amazon operates in experiences moderate unpredictability and in terms of environmental dynamism, leans towards the unstable side. While Amazon expends significant resources on research and development, in order to stay on top of consumer trends, it's not an exact science. Amazon’s commitment to the customers drives constant innovation, which helps to maintain a competitive advantage, and the development of Amazon technologies such as Alexa, Kindle, drone delivery, etc., have helped them to maintain a strong position in an unstable environment. The quick-changing nature of consumer tastes and preferences, intense competition in the retail market, and desire for every retailer to debut “the next best thing” to trump competition exposes Amazon to unstable environments and significant risk. If Amazon is unable to counter this unpredictability, missing a consumer trend or opportunity, it could adversely affect operations. Amazon states, “The Internet facilitates competitive entry and comparison shopping” and “We may have limited or no experience in our newer market segments, and our customers may not adopt our offerings.” (Amazon, 2019). Section 4Do your organization’s strategies and goals fit their environment?Type 1Type 2Type 3Type 4EnvironmentCalmVariedLocally stormy-134730-44532TurbulentStrategy typesReactorDefenderProspector-332685-11730800Analyzer with/without innovationOrganizational goalsNeitherEfficiency-114134-559350EffectivenessEfficiency and EffectivenessAmazon’s strategies and operative goals are an appropriate fit to the turbulent e-commerce/retail environment. Amazon seeks to serve consumers with low-priced products, and a store where someone can find anything they want to buy. The environment is defined by intense competition, price wars, and tactics designed to increase consumer convenience and loyalty. Amazon is aware of its placement in the turbulent environment but seeks to exceeds expectations and competition to maintain success through its loyal customers. Section 5Did your organization align across environment, strategy type, and organizational goals?Amazon’s organizational goals currently position it out of alignment with the environment in which it operates, and its strategy type. Amazon is an analyzer with innovation, in that they effectively utilize resources and meet customer needs to maintain a large market share and high revenues, while at the same time continually focusing efforts on exploration, through technological innovation, new market expansion, and continuous process improvements. However, this strong focus on technological innovation and customer satisfaction allows them to achieve effectiveness, but at the cost of some lost efficiencies, which results in a misalignment in the organizational goals section. Where do you think the organization should go now?In order to achieve alignment, Amazon executives should make efforts towards maintaining effectiveness while increasing efficiency. The biggest factor in improving efficiency is going to be managing costs in order to produce higher profit margins. While steps have been made in recent years to eke out a large profit margin percentage from their massive revenues, there is much improvement to be made. Given the low-price strategy, and enormous product offerings on their website (which result in high inventory costs), this will be a hard-fought battle. Implementation of more cost-saving techniques in the fulfillment centers, finding a way to more effectively and cheaply manage their inventory, will result in better advances to efficiency. Do you predict changes in their environment?Amazon operates in roughly the same manner every year, with marginal process improvements, or debuting a new Amazon product that sells well, so changes in this environment are hard to predict. In the near future, it is unlikely that any significant changes will occur to have massive impact on Amazon’s operations. Maintaining high customer satisfaction and loyalty will help Amazon to hold a competitive edge, and their focus on innovation and adaptation can lead to a reasonable conclusion that Amazon will be ready and able to meet any environmental changes that do occur in the years to come. , Inc. (2019, January 31). 2018 10-K Form. Retrieved from?, Inc. (2018, February 2). 2017 Annual Report. Retrieved from?, Inc. (n.d.). Investor Relations FAQs. Retrieved from?, Inc. (n.d.). Inside Amazon's fulfillment centers: What you can expect to see on a warehouse tour. Retrieved from , Inc. (n.d.). How your package gets from Amazon's warehouse to your front door. Retrieved from , Inc. (n.d.). Sustainability Question Bank. Retrieved from?'s global career site. (n.d.). Amazon Jobs. Retrieved from Vs. Alibaba: How The E-Commerce Giants Stack Up In The Fight To Go Global. (2018, March 2). Retrieved from , H. (2018, June 13). Top Amazon Competitors. Retrieved from , R. L. (2016). Organization theory & design (12th ed.). New York: Cengage Learning.De Brabant, C. (2018, February 26). The State of Retail in 2018 - Turbulent, Transformative, but Surprisingly Healthy. Retrieved from , J. (2018, February 07). China's home-grown tech giants are dominating their US competitors. Retrieved from Customer Success Stories - Amazon Web Services. (n.d.). Retrieved from . (2019, February 15). , Inc. Retrieved from , M. (2012, April 05). Amazon investigated by UK authorities over tax avoidance. Retrieved from , B. (2009, October 23). Amazon busts through recession with profit surge. Retrieved from , M. (2014, February). When Toyota met e-commerce: Lean at Amazon. Retrieved from?, A. (2018, November 06). Jeff Bezos on regulating giant tech companies: 'I expect us to be scrutinized'. Retrieved from . (2018, January 15). How Many Products Does Amazon Sell Worldwide – January 2018. Retrieved from?, T. (2019, February 07). Who are Amazon's (AMZN) main competitors? Retrieved from Investment Research. (2019, February 15). , Inc. (AMZN). Retrieved from ................
................

In order to avoid copyright disputes, this page is only a partial summary.

Google Online Preview   Download