Amazon Company: Management and Key Activities

free essayAmazon’s success is one of the most discussable topics in the world of business, entrepreneurship, and management. Usually, there are two groups of people – the first one agrees with the majority of company’ management decisions, and the second one does not support them. When it comes to any leader of the industry, there are both “good” and “bad” decisions; Amazon is no exception.

Brief Business Description and History

Amazon is a globally famous American e-commerce and cloud computing company that was started up in the middle of the 1990s, more than 20 years ago. Initially, the company was launched as an online bookstore. Later, Amazon offered a wide selection of CDs, Blu-rays, and video games. Amazon’s history is full of acquires; such a strategy helped the company to become the leading online retailer not only in the United States, but also all over the world. In 1998, Amazon bought www.imdb.com – Internet Movie Database that is currently the leading website in the industry. Next year, Amazon bought Alexa Internet, which is presently the one and only leader among database companies all over the world. In the early 2000s, when the e-commerce market was very relevant, raising, and lucrative, the company concentrated exclusively on its online market. In 2009, Amazon acquired Zappos.com; nowadays, it is one of the biggest shoe and clothing shops (Hsieh, 2010).

Without any exaggeration, since its establishment, Amazon is the biggest player in the US e-commerce business; the company is the largest Web-based retailer not only in the USA, but also all over the world. Amazon sells everything from food and clothes to jewelry and home decorations. In addition, the organization boasts of its own production – they design and manufacture consumer electronics. One of the most known and popular products is Amazon Kindle e-book reader. The popularity and high sales of this product were brought by its premium quality and reasonable price – Amazon gets most of the profits not from the e-book readers, but from the actually sold e-books.

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Moreover, the company also sells a variety of low-end products – flashcards, USB cables, etc. The main services of the company are online shopping, content distribution, and web hosting. Annual Financials for Amazon.com. (n.d.), the company’s revenue was $107 billion in 2015. Speaking about the operating income in the same year, it was about $2.2 billion, and the net income reached $596 million.

During the Amazon’s operation, there were three big events in this company. The first one is tied up with opening Amazon’s first off-line store in Manhattan, but unfortunately, the shop was not launched at the pointed location. Second, there were posted fake negative feedbacks for thousands of goods offered and sold at Amazon.com. Many customers were scared with a vague mechanism of defining fake reviews. The last but not the least, the company announced a revolutionary one-hour delivery in London, New York, and other cities. As for minor news and events, the company started selling Comcast Internet and TV subscriptions, launched its own subscription box, opened a restaurant, and unveiled “Pay with Amazon” option that allows customers to use Amazon as their personal e-wallet.

Launching the First Off-Line Store

To start with the first big news, the year 2015 was marked with a huge announcement. According to CNN Money (2015), Amazon was going to launch its first real store. Initially, the company had plans to start up their first off-line pick-up shop on the campus of Purdue University in Indiana. However, later, the company has completely changed the decision – Amazon intended to start up their first store in Manhattan. According to The Guardian (2016), the company has opened up its first off-line location in Seattle; it is called Amazon Books.

Even though according to the company’s reports their first off-line store is lucrative, there are a few reasons to critique and disagree with changing the first off-line store location. First, not every person can go to Seattle to buy some desirable books or CDs –obviously, a more popular place for the company’s first store would be the world-famous Manhattan. Needless to say, the majority of shops in Manhattan are opened not to bring huge revenue or any revenue, but keep up with the brand’s image.

It is possible to disagree with Amazon company management’s decision since it was more appropriate to start up a store in Manhattan. That way, they company would kill two birds with one stone: to draw more customers and strengthen its positive image. In addition, to analyze this decision, Amazon intended to launch an off-line store that primarily was meant to be a place for clients to pick up the orders they have placed online. Currently, there is no such option at Seattle’s store; thus, the company did not meet customers’ expectations.

The reason why the company’s management made a wrong decision was that initially Amazon claimed to open a pick-up store or a shop that would offer not only books but electronic devices, clothes, food, etc. The majority of e-commerce companies and e-shops in the United States do not have any off-line stores. That is why many critics claim it was not a necessary event for Amazon company and does not support Amazon’s management decision.

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Sues over Fake Reviews

As for the second big news, according to The Telegraph (2015), it was a precedent with suing users for posting fake reviews. It is not a secret that Amazon is a feedback-oriented company. The majority of customers choose this or that product or make a decision looking through numerous reviews. That is why this case was one of the most resonance ones in Amazon Company. In October 2015, the company stated that all users who post “fake” or “paid” reviews can end up in court. The retailer filed papers against about 1000 customers, claiming that Amazon reputation was tarnished by misleading feedbacks. The company has been keeping a finger on the pulse and controlled the issues of reviews since 1994. Thus, and it is no surprise that there are more than 1000 clients that can be punished for “paid” reviews.

In support of Amazon’s management decision, it is important not to perform love marketing in relation to your customers, but to show that you do not allow any fake reviews to spoil the reputation. In the long run, the company’s management made a decision about this action with the aim to protect its clients from this misconduct. Amazon was always famous for its ecosystem; and not to lose trust, the company has filed numerous lawsuits. The major problem in this case was how to explain and show “real” customers that they will be provided with a clear algorithm where their reviews will be approved or disproved. Currently, it is still one of the vaguest issues. The majority of customers do not understand how Amazon sorts out all the reviews; that is why many customers are concerned with possible litigation. The major disadvantage of this case and the reason not to support it is that it is critically important to find out a mechanism and scheme of posting fake reviews to protect the majority of the company’s customers and uproot the ecosystem of the business before bringing any actions regarding “paid” feedbacks. Unfortunately, Amazon has not done it till now.

Launching Superfast Delivery

The third big event of Amazon Company is one-hour delivery. According to the Wall Street Journal (2014), initially the company announced to start a service in the United Kingdom and the USA. Nowadays, one-hour delivery option is available in London, New York, and some other cities in the United States.

Present world is full of up-to-date technologies, and if a business wants to keep up with its customers in the rushing world, it has to follow these hi-techs. In support of Amazon’s management decision, we cannot ignore the fact that quick delivery or a popular drone delivery is aimed at saving customers’ time and raising the company’s image. According to BBC (2014), in the end of 2014, Amazon was looking for drone experts for delivery service. Without any exaggeration, one-hour delivery looks and feels like a game for a customer – in time or out in time? Speaking about compensation, if the courier is late with an order, Amazon Company will pay customers additional money. As Amazon Company claims to be an e-commerce business, one-hour delivery decision was well-timed, relevant, and highly acclaimed by many customers.

Generally, Amazon Company is still one of the hi-end, biggest famous companies not only in the USA, but also all over the world. However, the company has to pay attention to several points. The first one is a problem of “big announcement”. For instance, its competitor Google never announces anything if the company management’s decision was not approved. The main problem of Amazon is that the company unveils a lot of positive news (e.g. “Amazon is to start its first off-line store in Manhattan”) but the result is less than nothing. It is true that such crucial mistakes and ruffle behavior of the company will undermine and understate customers’ expectations. That is why we do not support and disagree with the majority of management’s decisions and solutions.

The last but not the least, the company’s management problem is that Amazon seems to be vague about its priorities and further business. Amazon is a hi-end, e-commerce business but it often plays on the market like off-line seller. It is important to mention that on-line and off-line business are completely different. Therefore, to build a clear strategy, draw more customers, and stay a lucrative company with high revenue, Amazon has to pay more attention to defining itself.

Conclusion

In conclusion, it is important to mention a good thing about Amazon Company saying that it did not betray its initial principles. It still offers and sells books, CDs, Blu-Rays, and other types of content. For the great majority of people not only in the United States, but also the whole world, Amazon remains the one and only store to select and purchase e-books, movies, and any other content. Moreover, with the help of Amazon services, any person can upload his own book, essay or any other type of content just in a few clicks and begin selling it as a licensed author. Comprehensive product information, 24/7 customer service, quality control (reference to “fake” reviews), easy-to-use huge online store are just a few advantages of Amazon. Even though the company’s management makes clear and timely decisions, the majority of them are vague and ineffective. In addition, the company still has to pay attention to its “big announcements” and take its time to explain all alterations and innovations to their customers.