management theory and practice

 

 
 
Case 3: Amazon.com – Keeping the Fire Hot (page C-5)
you are required to submit a 4-6 page paper (single-spaced, 12 pt. times new roman font, 1” margins,
page limit excludes title and reference page) that analyzes one of the four cases I’ve listed on the next
page. The cases can be found at the end of your textbook in Appendix C. Each case includes a set of
questions that are designed to explore concepts that we have learned about throughout the semester.
You should demonstrate a strong understanding of all the applicable concepts from the chapter readings
by responding to each of the questions for your chosen case. Your paper should include 5 sections: 1)
brief introduction to the case, 2) one section for each of the three questions, and 3) a short conclusion
summarizing your paper. Points will be deducted if these 5 sections are not clearly labeled and
identifiable. Be sure to fully address each of the questions for the case (respond to all aspects of the
question). You will need to use articles in both business journals and internet websites to learn more
about the company in the case to respond to some of the questions. This an opportunity to demonstrate
and apply what you have learned. Make connections between the concepts you have learned about in
the course and what you read about your company. Your paper will be graded on the basis of
completeness, the quality of your responses to the case questions and the overall discussion, extent and
accuracy of the application of concepts from the textbook, fluidity (e.g., readability, clarity, grammar,
spelling) and formatting (APA style with complete citations/references is required).
I require APA format for your in-text citations and your reference list. Semester projects submitted
without an accurate reference list will not be graded and receive a zero.
your paper and must be listed in the reference section. Do not have more than 10% of the ideas
presented in your paper come from a single source (excluding the textbook, which should be referenced
extensively). Papers with more than 10% of its ideas from one website will not be graded.

 

INTRODUCTION

 

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According to the Harvard Business Review Jeff Bezos, the founder and CEO of Amazon, has emerged as the best performing CEO in the world. He has been able achieve a great success at Amazon, as he could transform it from a basic online bookstore to a $140 billion retail empire. The company was launched in 1995 and then within few years reached a sound and profitable position. Now it has finally earned more than $1 billion in revenue. This slow growth of Amazon has added up to its success. Amazon has grown accordingly with the segment of online shopping and has been able to achieve the status of a technology giant. But in this new digital age, being the leader of online shopping is not sufficient to survive therefore launching Amazon Fire Tablets series along with rolling out Amazon Prime has been great business.

 

DISCUSSION

 


According to Bezos, moving slowly and steadily helped Amazon survive the late 90’s falldown. This understanding helped Amazon in introducing one of its kind the Kindle e-reader (Miller, C.C. and Bosman) and the new AWS cloud service in market(Balduzzi, M., Zaddach, J., Balzarotti, D., Kirda, E. and Loureiro, S.) 
When questions were raised on the launch and future of the Kindle in the year 2007 ,on its launch, its cost was $399 at that time and was considered Amazon’s first major consumer electronics product. Amazon made the device cheaper by introducing Wi-Fi only models and even models which are supporting ad. When they were launched, Kindle Fire tablets (Weber, S.) were introduced with technologies that were already available in many tablets present in the market. Amazon's new products captured market easily because of their low prices, especially when compared with Apple's iPads. The new version of kindle, the Kindle Fires has been priced lower than its counterparts available in the market as it could arrange a suitable advertising campaign idea for it.
If in future losses occur then the company can recover the money through the sale of its premium apps and services like its annual Prime fast-shipping membership. The fast-shipping membership now includes streaming movie content, with other offerings. Therefore, on whole the Kindle Fire is a great deal for Amazon. 
Amazon could sell its products in loss because for Amazon, the kindle Fire is a book store, and a mini version of movie theatre, and a full fledge record shop. Once a customer walks in the Amazon's market, there is availability of a variety of ways they can make money. One can buy the books, movies, music and apps available there. 
Use of creativity, flexibility, and spontaneity when making key decisions makes decisions easier. Bezos in his career has never been uncomfortable with lack of structure and the attempts which had led to his failure in past. And this has led to positive effects as Amazon has thousands of repetitive customers. Hence, systematic thinking and informed intuition are the main weapons of Bezos.

 


PROBLEM SOLVING

 


The economic slowdown in the past could not affect the digital home entertainment and thus it has evolved and will grow magnificently over the coming years. The wide range of technologies, different trends in changing lifestyles, and technological advancements due to innovations have all changed the ways in which consumers interact with the digital content. It is believed that in the near future of digital home entertainment, content could be the, and consumers would be able to access the provided  content and digital libraries on various devices connected to it .
The use of digital content of entertainment has been driven by the speedy change in entertainment regarding online and the mobile platforms, on which consumers 
expect the ability to watch the TV which is broadcasted, access the provided on demand video content any time and at any place, they can even select Internet radio stations of their choice , can play games, either inside or outside the home.
From 2011 subscribers got access to the video streaming service which was part of its Prime service.
Amazon will be able to lead the streaming business smoothly when– 
Firstly, it will get more content from multiple categories like video games , live sports and other entertainment induced services.
 Secondly, produce high quality tv serials and movies which would attract a whole lot of youngsters and other likely audience.
Thirdly, make it cheap for developing world by tying up with data providers who make the easy availability of the services in respective countries. 
Fourthly, use its expertise in ad-support to generate revenues from streaming business and take the edge over other players in the competitive business environment.
Lastly, by developing better predictive models for consumers and even the likely customers as used in its retail segment, personalize content offered to users who find it rather tough to choose the best content from such vast variety.

 

FURTHER RESEARCH

 


Amazon has introduced new initiatives which are aimed to strengthen its core businesses and AWS segments. In this regard it has the initiatives are:
* Prime Air - A R&D project which would deliver packages via drone known as Amazon Prime Air. This initiative intends to use octocopter drones to deliver orders directly to customers in just 30 minutes in a safe and secure manner.
* 3D printing trucks - Amazon filed a patent for trucks fitted with 3D printers. It would allow Amazon to add millions of items to its wide list without having to stock and pile up. 
* Amazon Handmade- It allows small merchants and individuals to offer handcrafted goods.
Most of these initiatives and others, are pretty much in line with Amazon’s strengths, i.e., online retailing. Bezos once said – ‘Disrupt your business before someone else disrupts it’. Amazon’s rivals in terms of revenues (Apple, Google) are not its direct competitors in this segment. In other segments- say, tablets – Amazon has not been able to dislodge Apple and has clearly failed to wage a price war. In fact, late entrant Google is making greater noises with Pixel, and similarly Microsoft with Surface. The reason is possibly that its competitors have an edge in making devices with better technology while Amazon is mostly a leader in services. Another segment where Amazon faces direct competition and is fairing much better is AWS. Its competitors in that segment include Google Cloud Services. To its benefit, most of upcoming research and innovation in Artificial Intelligence, Virtual Reality, Augmented Reality and Deep Learning are easier for it to integrate into its established workflow and hence, it must continue investing in these spheres.
Major Competitors (Moser, D.J. and Gassmann)
Amazon has been operating in three general segments, which are: media, electronics and other merchandise.
In the media segment, Amazon’s competitors are auction site eBay ; Netflix ; Time Warner Cable ; Apple due to its iTunes segment; and Google due to its Play Store.
Amazon’s competitors in the electronics and general merchandise segment are Best Buy, Staples, Walmart, Radio Shack, Family Dollar, Target, Sears, Big Lots, Delia and Systemacs. Many of these are brick and mortar rivals.
In the electronics and general merchandise segment its competitors are Alibaba Group, Light in the Box Holding Co., PCM, Vipshop Holdings, JD.com, Wayfair Inc. , Overstock.com and Zulily.
In the other operating segment, Amazon’s competitors are some of the world's largest companies like CDW, PC Connection, Google, Oracle; salesforce.com, Insight enterprises, Accenture and Citrix Systems, etc.
Kiva and Zappos (Lang, S., Tinder, L., Zimmerman, J. and Harrison )
Kiva has basically three components, they are:
Small and wheeled retrieval robots 
tall upright racks - which are known as “pods” and 
human workers - They are designed to have warehouse stock mobility, which will help humans to interact with the stock.
Zappos was acquired to provide its customers fast and hassle free services. Zappos is basically to to reassure, surprise, and engage the customers.
For example, the company’s facility of free-delivery policy guarantees that orders could now arrive within four or five business days — which is a perfect time ro wait for the customers other than during emergency. These facilities will help Amazon to a great extent.
Alibaba and Amazon (Jung, J.C., Ugboma, M.A. and Liow, A.K.)
As Amazon and Alibaba are quite similar in capital inducements, that is ,  $168 Billion and $153 Billion respectively, therefore Alibaba could give an equal weight in portfolios required to have exposure to the Internet Retail Sub Industry and General Retail Industry effectively and gradually in the future which could be a big threat to Amazon. Not only real earnings, Alibaba also have a good figure of real earnings growth stats. Amazon till recently is not able to match upto the level of Alibaba's earnings growth rate. Hence, it is fair to say that Alibaba at the present is the most potential challenger to Amazon in its core segment, i.e., online retail.
Amazon offers a multitude of services in various segments. In stark contrast, its competitors Apple, Facebook, Google offer relatively less diverse services. It is debatable if that is one of the reasons that Amazon has been unable to dislodge its competitors from their core services. Bezos has proved over the years how his emphasis on experimenting is a successful strategy. And it does not look Amazon will stop and will keep rolling out new services. Yet, as its competitors gain further control of their respective segments, Amazon must choose whom to rival and where. Taking example of Apple- which was considered the most innovative company, it has declined into obscurity in recent years in terms of innovation with Microsoft and Google being more aggressive in innovation and have now directly begun to challenge Apple in its core businesses – Mac, IPhone, IPad. Similarly, Amazon will face similar challenges if it chooses to diversify more and not innovate where it leads. Bezos definitely knows that and he can be trusted to make right decisions.

 


CONCLUSION

 


Amazon under Bezos does not seem one bit like a company without a plan. First they into the leading online retailer. Then they came up with AWS which is a remarkable product in itself. Now, they have targeted the digital entertainment industry and already look like potential winner. Experimenting, relying on data, innovating and customer satisfaction has been their mantras. Yet, ups and downs in global economy affects retail consumption and stocks. Hence diversifying into a few key segments and becoming leaders in them is essential for it to retain the value it represents now in the online world. Retaining the appeal to customers it has presently, requires disruption which it must continue pursuing else someone else would. Apart from that, expanding in the developing world, dealing with competition from firms like Alibaba, Flipkart and others, where pricing and logistics leave much to be desired has to be high on the agenda of Bezos and co. All of this to Keep the Fire on.

 


REFERENCES

 


Miller, C.C. and Bosman, J., 2011. E-books outsell print books at Amazon. New York Times, 19.
Balduzzi, M., Zaddach, J., Balzarotti, D., Kirda, E. and Loureiro, S., 2012, March. A security analysis of amazon's elastic compute cloud service. In Proceedings of the 27th Annual ACM Symposium on Applied Computing (pp. 1427-1434). ACM.
Weber, S., 2014. Kindle Fire HDX Users Manual: The Ultimate Kindle Fire Guide to Getting Started, Advanced Tips, and Finding Unlimited Free Books, Videos and Apps on Amazon and Beyond. Weber Systems Inc..
Moser, D.J. and Gassmann, O., 2016, June. Innovating Platform Business Models: Insights from Major Tech-Companies. In ISPIM Innovation Symposium (p. 1). The International Society for Professional Innovation Management (ISPIM).
Lang, S., Tinder, L., Zimmerman, J. and Harrison, J.S., 2012. Amazon. com: Offering Everything from A to Z.
Jung, J.C., Ugboma, M.A. and Liow, A.K., 2015. Does Alibaba's Magic Work Outside China?. Thunderbird International Business Review, 57(6), pp.505-518.

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