Amazon Online and Amazon Go Platform – Essay

free essayAmazon is a prosperous company that is proud of the ability to run and launch new types of businesses taking into consideration lessons learnt from the existing operations. It provides a great range of benefits that attract attention of customers and induce them to become regular clients. The fast and free delivery of products makes the company one of the strongest competitors on the market. However, Amazon should think more thoroughly on new projects to avoid losses.

Value Chain Analysis

The value chain analysis helps to identify business activities of Amazon directed at the support of competitive advantage and the creation of business values (Sabitha, 2014).

Inbound logistics focuses on the arrangement and collaboration with vendors. Amazon concentrates on long-term agreements to guarantee beneficial practical terms of payments, extension of credit limits, and availability of merchandise (Sabitha, 2014). Fulfilment by Amazon (FBA) is one of the company’s cornerstones of inbound logistics for an efficient retail business. Using it provides an optional choice for third-party sellers, which makes their proposed products eligible through Amazon Prime free shipping, two-day shipping, and range of other benefits (Sabitha, 2014). The second crucial aspect is the operations of Amazon that cover international and North America segments based on three connected parts that comprise Prime, Amazon Web Service, and Marketplace. The latter is the most crucial source of revenues because of support activities, retail platform and online auctions. Amazon Prime concentrates on competitive prices and fast shipping of products that are crucial advantages. Amazon Web Service proposes various technological and network resources (Bilton, 2009).

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Outbound logistics is based on the operation of 109 fulfilment centers, using robotic technologies for shipping, picking, and stowing products. The company also has an intention to buy twenty Boeings to perform air delivery (Bilton, 2009). Another crucial aspect is marketing focusing on increasing the budget supported by a mix of marketing communication like media advertising, sales promotion, and public relations. The services of Amazon are oriented on the provision of satisfaction for both sellers and buyers. For sellers the first group, the company proposes a program basing on the formation of the most competitive prices, prevention of going out of stock, and various selection options (Bilton, 2009). For customers, beneficial aspects are support of AWS provided service. Such approach makes the satisfaction score reach the highest point in the scale of 100.

The study of values and operations of Amazon has proved that Amazon Go directly fits the main business, especially concerning the application of new technologies that help to attract clients. Amazon Go proposes a great range of products that will attract numerous new clients. An innovative approach allows detecting items that are removed from and returned to stores trough the tracking of purchases with the help of virtual carts (Blundell, 2016). The application automatically bills a card that is saved on the Amazon account of the client and generates a digital receipt. Such approach makes purchases faster and prevents queues. Thus, Amazon Go largely fits the Amazon business relating to the provision of high-quality services for customers that will make it highly competitive on the market.

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Effectiveness of Amazon’s Online and Amazon Go Businesses Strategies

Amazon is a prosperous company. In order to differentiate itself, it acquires numerous e-commerce and IT start-ups to provide high value to customers applying innovative technologies. The strategy of Amazon online is based on the support of the quick delivery of products that involves an extensive distribution system. Such approach makes 50% of customers come back to services (Pullen, 2015). The company is oriented on improving distribution lines and infiltrating warehouses that bring about Amazon to new areas and buyers. In order not to lose the latter and raise profits, it created a structured network to deliver products to the most remote locations. The marketing strategy emphasizes the attraction of the upper and middle classes for online shopping. Numerous Amazon’s customers are professional businesspeople, who have no time to go out for purchasing. These aspects make the business very profitable because the quantity of busy persons increases only. The company also makes great discounts on definite days (Pullen, 2015). Thus, Amazon online has overcome numerous milestones to make the business prosperous, and the applied strategy brings great profits to the company. Concerning Amazon Go, it is hard to make accurate forecasts because the business is new. However, it concentrates on numerous new technologies, which reduce competition and pave the way for the prosperous future. The strategy of Amazon Go is based on providing services with the help of artificial intelligence that helps to eliminate the checkout process (Baird, 2016).

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The comparison of Amazon’s online and Amazon Go business strategies shows that they are oriented on searching ways to eliminate non-value adding processes and frictions in the retail sphere. Of course, this approach can bring great profits because of involving less human resources. Besides, it will help to avoid queues, attracting numerous clients (Ungerleider, 2015). However, the company will have to hire highly trained specialists to perform tasks that are more complex, because mechanisms can break and will require great maintenance costs. Orientation on investing in technologies raises profits, but any stop in their operation can increase customers’ indignation. Numerous experts also consider that Amazon Go is too risky in keeping the concept of green field operation when legacy grocery operators work on the introduction of new ideas concerning the existing brown field stores (Blundell, 2016). The study of the strategy supported by Amazon Go proves its hazardous core because of obsessive focus on the delivery of differentiated experiences to customers. A failure to correspond to conventions and legal regulations can make Amazon disrupt retail through redefining competitive elements in the industry completely (Blundell, 2016). Such great number of risky elements in the strategy of Amazon Go induces to consider that it is less profitable than the operation of Amazon online, the strategy of which is more clear and strong.

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Recommendations for Effective Business Development

If I were a consultant, the first recommendation would be to reduce the speed and think more rationally on the operation of the new company in correspondence to the set marketing rules because too aggressive strategy can provoke significant losses. Another crucial aspect is creating a qualitative security system because hackers can find the way to get into the store pushing one button that will let them walk out with tons of stuff for free (Baird, 2016). The company should eliminate the factor of too large latency that can confuse customers. It should not only focus on bright advertisements, but also on the elaboration of clear instructions (Baird, 2016). For example, the video of Amazon represents customer’s scanning to come into the shop. Nevertheless, it does not show what to do if the individual will enter the store without scanning (Baird, 2016). Other crucial questions are what action will be taken in case of pilferage and whether shoplifting can break the return on investment. All possible issues should be regarded to induce people not to be afraid to use something new. It would also be effective to ponder on the application of the RFID technology (Ungerleider, 2015). Amazon Go emphasizes avoiding checkout lines. RFID will help to improve the technology before other competitors do not use it in their new projects. An important aspect is concentration on techniques to attract clients. Thus, in case the company will be able to propose low prices, it should emphasize fresh products with high quality.

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Conclusion

The study of Amazon’s operations has proven their high effectiveness reached through the elaboration of programs, the implementation of which can help to achieve the best results. However, it is important to think more thoroughly on the too sharp development of Amazon Go, the operations of which can be improved through the involvement of additional effective technologies. Particular attention should be paid to the representation of more clear instructions to customers that will help them adapt easily to the new proposal easily.