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E-commerce Risk Analysis: A Case of Amazon Incorporated Name: La’Dedra L. Alford Institution: University of Maryland Global CampusDate: Sept 8, 2020Professor: Helen HebenE-commerce Risk Analysis: A Case of Amazon IncorporatedIntroduction: Amazon Incorporated is an American multinational company that is focused on a variety of products and services ranging from e-commerce, cloud computing, logistics, streaming, payments, artificial intelligence as well as data and web services. Amazon is headquartered in Seattle, Washington, where all the operations are coordinated from. The history of Amazon shows the strategic planning that was done before choosing its location. For instance, the company was set up in Washington near Microsoft premises with the hope that the technical talent there would benefit its growth. The company has, over the years, acquired the status of an international tech giant after expanding its operations to almost every region globally. Amazon mainly operates business segments such as North America, Amazon Web Services (AWS) as well as International and has been referred to as one of the most valuable brands as well as one of the most powerful economic organizations in the pany's Business ProfileAmazon was founded in 1994 by Jeff Bezos in the Bellevue area, Washington, as a bookstore. According to Bezos, selling books seemed to be the most viable business idea at the time, mainly because of their low unit price and the high demand globally. He also felt that there were numerous titles available in print. Even though the company is still known for being a major book online outlet, Amazon has since diversified its catalog to include many other products and services. Today, the firm deals with almost every product. It also owns several subsidiaries and programs such as Amazon Prime, Amazon Studios, Amazon Music, Twitch, and IMDb that offer solutions across media, web, and data ("Dub & Bradstreet"). Additionally, Amazon's products in the area of artificial intelligence, such as Alexa, Ring, and Echo, have revolutionized the digital landscape, especially automation and surveillance. Despite its Bezos – the founder and Chief Executive Officer – being at the core of its growth, Amazon's has a host of other key people who drive its transformative agenda ("Amazon sales"). Its board of directors comprises of Rosalind Brewer, who is also the group president and Chief Operations Officer at Starbucks, Wendell P. Weeks, Jon Rubinstein, Judy McGrath, and Rosalind Brewer (Bezos, 1998). On the other hand, the company's top executives other than the Chief Executive include Dave Clark, who is the Senior Vice President-Worldwide Operations, Brian T. Olsavsky, the Chief Financial Officer and Senior Vice President, Amit Agarwal, who doubles up as the Senior Vice President and also Country Manager of Amazon India. David A. Zapolsky is the Secretary, Senior Vice President as well as the General Counsel. Notably, the e-commerce section, which is the foundation of Amazon, operates using the "Merchant partnership" model where it goes onto contracts with suppliers of various products who, in turn, become suppliers through the Amazon website for a specified period. Some of the notable suppliers who have been in agreement with Amazon as merchant partners include Toys "R" Us and Apple.Amazon is one of the American technology giant firms. For that reason, it has grown alongside fierce competitors who offer similar services. Its competitors include Facebook, Alphabet Incorporated (Google), Microsoft, Alibaba Group, and Apple, who have recently increased their capacity in offering digital as well as eCommerce solutions. For example, the Alibaba Group is seen as a rival of Amazon given its acceptability in China, the US, and worldwide as the fact that it offers services similar to those of Amazon. While Microsoft, Google, and Apple do not offer e-commerce solutions competitively, other services that they offer, such as media and streaming cloud solutions and web services, are common across the big firms (Ritala, name, Wegmann, 2014). Like many of the technology giant firms in the US, Amazon, which trades with a NASDAQ code of AMZN, is a publicly-traded company whose Initial Public Offer (IPO) investment was hailed as one of the best (", Inc. Common Stock"). As of the years 2019, e-commerce had been declared as the most valued publicly-traded company in the United States, overtaking Microsoft, and other technology giants. With a market cap of $1.7 trillion, Amazon's Mutual fund holders account for 33.04%, while Individual stakeholders account for 11.65%. The other institutional holders account for 26.53% of the shareholding. In terms of financial performance, 2020 has been a productive year for Amazon, as its profits have soared. North America region posted an increase of 43.4% in sales as the worldwide sales went up by 33.5% in the second quarter of 2020 ("Amazon sales"). The increase in online shopping and especially the groceries, is seen as having been doubled by the presence of the coronavirus pandemic, which forced many households to stay indoors. Despite the uncertainties brought about by the coronavirus pandemic and the expenses associated with mitigating the damages, Amazon managed to double its income in the second quarter of 2020 as the profits jumped from $2.63 billion to $5.24 billion, which was recorded at during a similar period in 2019. The second quarter of 2020 saw Amazon's international sales increase from $16.37 billion to $22.67 billion within one year, while profits from Amazon Web Services (AWS) increased to $10.81 billion from $8.38 billion. Within the same period.Amazon e-Commerce operationsAmazon makes much money through its e-commerce operations, both locally and internationally. Its eCommerce pillars include product sales and online subscription services, which rake in millions (Ghandour, 2008). Besides, Amazon earns through advertising placed on its websites. Products and services are sold through the company's mainline, the website. Media (Music, DVDs, CDs, books, as well as software), beauty products, groceries, baby products, personal care are some of the products that are sold online and delivered to customers. From the earnings release for that shows Amazon's earnings by the first quarter of 2020, the firm is reported to have increased the operating cash flow from $34.4 billion to $39.7 billion within one year. The report shows that free cash flow moved from $23.0 billion to $24.3 billion within the same period. Amazon Requirements for CybersecurityCybersecurity is important mainly because it pertains to protecting sensitive data such as personally identifiable information and other personal data. More importantly, a company like Amazon plays host to personal data acquired through account creation or subscriptions, data mining through web crawling used for business data analytics and that collected through artificial intelligence tools like Alexa. As seen with many digital businesses, Amazon requires tight cybersecurity measures as e-commerce in order to function normally and ensure the smooth operation of the various applications deployed on the firm's systems. Because Amazon operates a myriad of web solutions such as hosting and data, a lot of user data is involved, which might be sensitive. Loss of this data could be a huge blow to both the customer and the firm. Lawsuits are also likely to follow Amazon should privacy policy be violated, and private data leak. While the user is offered an option to opt-out when private data is required during signing up, the password must be protected to avoid fraud. Business operations, like advertising, which are data-driven, should be made secure.Identifiable Risks and Impact of CybersecurityEcommerce has revolutionized trade. However, given their online payment nature, eCommerce businesses like Amazon are prone to cyberattacks, and the results could be highly damaging. In most instances, cybercriminals target large outlets to steal and cause a security breach. Amazon faces cybersecurity threats such as fraud at the point of transaction. Electronic payment uses the identity of the involved individual by the use of passwords and security questions, which could be compromised. Threat concerns such as phishing should concern e-commerce companies like Amazon (Clarke, 2016). With advanced security network technologies as there are now, backdoor attacks are possible even with highly guarded systems. Amazon must ensure that authentication systems are well secured to avoid unauthorized entry. Cybercrime has a huge effect on the business involved. In this case, Amazon is an online business that heavily depends on tight security to conduct a transaction. Should fraud occur during transaction or private and identifiable information be stolen, it could result in a financial loss as well as reputational damage. Whether through lawsuits or through losing actual money to fraudsters, cybercrime is costly to the business. The image of the organization also needs to be protected, which will, in turn, cause more money to be lost. The threats and the impact of cybercrime show how serious the issue of cybersecurity should be taken and that firms like Amazon should put in place measures to protect personal data.ReferencesBezos, J. (1998).?Amazon. Com. Purdue University Public Affairs Video Archives.Dub & Bradstreet. (2020). Company Profile- Amazon Inc. Retrieved from , S. (2016). Reducing the impact of cyberthreats with robust data governance.?Computer Fraud & Security,?2016(7), 12-15.Ghandour, A., Deans, K., Benwell, G., & Pillai, P. (2008). Measuring e-commerce website success.Ritala, P., Golnam, A., & Wegmann, A. (2014). Coopetition-based business models: The case of Amazon. Com.?Industrial marketing management,?43(2), 236-249., Inc. Common Stock (AMZN). (2020). AMZN. Retrieved from sales, Amazon revenue and Amazon annual profits. (2020, July 30). Digital Commerce 360.? ................
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