Amazon.com It’s not an experiment if you know it’s going towork. – Jeff BezosIntroductionAmazon.comInc.
is the leader in the online retail business that deals with electronicproducts and cloud hosting services. The company was founded by Jeff Bezos in1994 but the website, which is the core marketing and selling platform for thecompany, was launched in 1995. Currently, the company’s headquarters are inSeattle, Washington, US. The company operates several websites that targetdifferent markets i.e. in UK, France, Japan, China, Italy and Germany. Thecompany is also planning to launch other websites that will target Netherlands,Poland and Sweden.
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Apart from selling electronic products, Amazon.com alsooffers cloud hosting services to companies all over the world. Amazon is unlike any other retail site, differsfrom its competitors in that customers have numerous options when shopping onthe Amazon website. When compared to other book sellers for example, Amazonoffers features that other book sellers do not.
Oneof the Amazon’s project – the Amazon Prime program offers different perks, suchas allowing members to “rent” e-books for a short period. Amazoncustomers may also shop from a huge variety of items, and even download andwatch television programs or movies. In terms of the Amazon’s Kindle/KindleFire and Apple’s iPad, the difference is in the way that the company makesmoney. Amazon strives to make money more from sales after the sale of theKindle device than the actual selling of the reader itself.
For example, peoplewho purchase the Kindle will continue to purchase e-books through Amazon. Thereis also a Kindle software which enables to use this product on the otherplatforms, such as PC’s tablet’s laptop’s and etc.Throughout thefirst four years of business, the company did not make any profit and manyshareholders were overwhelmed by the nature of business the company was engaged in. Soon critics were provedwrong because during the fourth fiscal year the company made profit. Profit wasnot the only book marker but the fact that there seemed to be a major drift inselling of books from bookshops to eBooks the company was on track to made evenmore exploits as the online market continued to increase. As result of thetremendous growth, Jeff Bezos was announced «Person of the Year» by the Times Magazine.
Key Dates· 1994 – Founded by Jeff Bezos· 1995 – Launch of website Amazon.com· 1997 – First launch on IPO· 1998 – Amazon.com enters theonline music and video business; companies are acquired in the United Kingdomand Germany.· 1999 – Amazon.com expands into selling toys, electronics, tools andhardware, and Jeff Bezos is named «Person of the Yeaar» by Times Magazine· 2012 – Purchase of Kiva systems (now Amazon Robotics· 2016 – Jeff Bezos announced that they made first delivery with the drone· 2017 – Purchase of Whole Foods for 14 billion $ Interesting FactsOriginally Jeff Bezos wantedto give the company the magical sounding name “Cadabra.
But “Amazon’sfirst lawyer, Todd Tarbert, convinced him that the name sounded too similar tothe company named “Cadaver,” especially over the phone. He finallychose “Amazon” because he liked that the company would be named afterthe largest river in the world, which was described on one of the company’s earliestlogos. Amazon got started outof Bezos’ garage and the servers that the company used required so much powerthat Bezos and his wife couldn’t run a hair dryer or a vacuum in the housewithout blowing a fuse. In the first month of its launch, Amazon had alreadysold books to people in all 50 states and in 45 different countries. History TheEarly 1990s: Thebeginning of the Amazon started in 1994 when Jeff Bezos left his position asvice-president of the Wall Street firm D.
E. Shaw, moved to Seattle, and beganto work out a business plan. He started to make up a list of 20 products whichare more likely to be popular to be sold on the Internet. By the method of eliminationhe shrank the list tofive most plausible to give profit: CD’s, books, videos, and computer softwareand hardware. Bezos eventually decided that his venture would sell books overthe Web, due to the large worldwide market for literature, the low price thatcould be offered for books, and the tremendous selection of titles thatwere available inprint.
He chose Seattle as the company headquarters because of its large technologicalwork force and its optimal location for large book distribution center inOregon. Then he worked to raise funds for the company while also working withsoftware developers to build the company’s vital marketing platform – the website. The web site was launched in July 1995 and quickly became the number onebook-related site on the Web. After only four months of operations, Amazon.combecame a very popular site on the Web, making high marks on severalInternet rankings.
It climbed up to the sixth place of the ranking of the best sites on PointCommunications’ “top ten” list. The site opened with a searchabledatabase of over one million titles. Customers could enter search information,prompting the system to surf the company’s database and find the desiredtitles. The program then displayed information about the selection on acustomer’s computer screen, and gave the customer the option to order the bookswith a credit card and have the books shipped in a just a few days. Unlikeits large competitors, such as Barnes & Noble and Borders, Amazon.comcarried only about 2,000 titles in stock in its Seattle warehouse. Most ordersthrough Amazon.
com were placed directly through wholesalers and publishers, sono warehouse was needed. Amazon.com would simply receive the books from theother sources, then ship them to the customer. At first, the company operatedout of Bezos’ garage, until it was clear that it was going to be a success,necessitating a move to a Seattle office, which served as the customer support, shipping, and receiving area. It wasinteresting that, because of the Internet, such a small venture could realizesuch a broad scope so quickly; within a month of launching the web site, Bezosand Amazon.com had filled orders from all 50 states and 45other countries. Asa relatively young venture in the Internet commerce, initially Amazon strivedto set the standard for web businesses. With that goal in mind, Jeff Bezos wentto work on making the web site as customer friendly as possible and relatingthe site to all types of customers.
For those people who knew what book theywere looking for and just wanted quick performance and low cost, Amazon.comoffered powerful search capabilities of its expanded 1.5million-title database.
The company also began offering 10 to 30 percentdiscounts on most titles, making the prices extremely affordable. For othercustomers who were just looking for something to read in a general area ofinterest, Amazon.com offered topic areas to browse, aswell as lists of bestsellers, award winners, and titles that were recentlyfeatured in the media. Finally, for people who could not decide, Amazon.comoffered a recommendation center. There a customer could find books based on hisor her mood, reading habits, or preferences. The recommendation center alsooffered titles based on records of books the customer had purchased in thepast, if they were return customers to the site.
Broadening the horizon InMarch 1998 Amazon’s customer account reached 2.3 million, it was an increase of50 percent in just three months, and mind-bending increase of 564 percent overthe previous year, it took Amazon.com 27 months to serve its first millioncustomers and only six months to serve the second million.
This feat madeAmazon.com the third largest bookseller in the United States. Companyhas also expanded its serving range through a trio of acquisitions in early1998. Two of the companies were acquired to further expand Amazon.com’sbusiness into Europe.
Bookpages, one of the largest online booksellers in theUnited Kingdom, gave Amazon.com access to the U.K.
market. Telebook, thelargest online bookseller in Germany, added its German titles to the mix. Bothcompanies not only gave Amazon .com access to new customers in Europe, but italso gave existing Amazon.
com customers access to more books from around theworld. The Internet Movie Database (IMD), the third acquisition, was used tosupport plans for its move into online video sales. The tremendous resourcesand information of the IMD served as a valuable asset in the construction of acustomer-friendly and informative web site for video sales. Anotherbig change in 1998 was the announcement of the company’s decision to enter intothe online music business. Bezos again wanted to make the site as useful aspossible for his customers, so he appealed to them for help.
Several monthsbefore officially opening its music site, Amazon.com asked its bookstorecustomers and members of the music profession to help design the new web site. Amazon.comended the second quarter of 1998 as strong as ever. Cumulative customeraccounts broke the three million mark, and as sales figures for Amazon.
comcontinued to rise, and more products and titles were added, the future lookedbright for this pioneer in the Internet commerce marketplace. With music as apart of the company mix, and video sales on the horizon, Bezos seemed to haveaccomplished his goal of gathering a strong market share in the online salesarena. As Bezos told Fortunemagazine in December1996: “By the year 2000, there could be two or three big onlinebookstores. We need to be one of them.” OrganizationalStructure Amazon’sorgaznizational structure is considered as «Functional OrganizationalStructure».
This structure focuseson business functions as bases for determining the interactions amongcomponents of the organization. The following characteristics are the mostsignificant in Amazon’s corporate structure: 1. Global function-based groups2. Global hierarchy3. Geographic Divisions Global function-based groups It may be considered as the soundest part of the Amazon’s organizationalstructure where business has a dedicated team and a senior manager.This is leads to efficiency in facilitation e-commerce operations withinthe company. These are the major function-based groups in Amazon’sorganizational structure: · Office of the CEO· Business Development· Amazon Web Services· Finance· International Consumer Business· Accounting· Consumer Business· Legal and Secretariat Global hierarchy This is the most common type of organizational structure which in AmazonInc, it is expressed in terms of global system of vertical lines of commandinfluenced by the authority of the firm.
For example, seniormanagers’ directives are applied throughout the organization, affecting allrelevant offices of the company worldwide. The strategic objective of thisfeature of the corporate structure is to facilitate managerial control ofAmazon’s entire organization. GeographicDivisions. Amazon’s organizational structurealso involves geographic divisions.
In this structural characteristic, groupsare based on geographic regions and related business goals. For example,Amazon.com Inc. uses geographic divisions to make it easier to manage thee-commerce business based on economic conditions of certain regions.
Thestrategic objective in having this characteristic of the organizationalstructure is to enable the company to address issues or concerns relevant toeach geographic region, considering differences among regional markets. Amazonhas a simple approach for this structural feature, involving the followinggeographic divisions in its operations: · North America· International Innovations There a lot of things in routine,which makes our life easier for which we should be grateful to the simple butgenius innovations of Amazon. From purchasing things in only one click toreview lists in websites without which we cannot imagine our online shopping,everything is invented by the Amazon. Here are some of those innovations whichare genius because of their simplicity. 1. 1-Click Everytime if you buy clothes, or make an order onlineand you push a button named «Buy», know that you can do this because of Amazon,as this function was invented and patented by Amazon Inc. 2. Recommendations The ultimate website of Amazon and can determinecustomers’ purchases, your ratings and determine customers’ interest andrecommend something in what that particular customer can be inretested in.
3. Reviews Customers can add a video or written review for anyprodcuct listed on the website to make other customers to make their decisionabout item. 4. Amazon Wish List This list enables to customer to add products theywould like to have on the digital ailes of the Amazon.
com. With Universal WishList customers can add products from any website to their Amazon Wish List injust one click 5. Aurtorip AutoRip gives customersfree MP3 versions of CDs and vinyl music they purchase from Amazon. Whencustomers purchase AutoRip CDs and vinyl, the MP3 versions are automaticallyadded to their Cloud Player libraries where they are available, free of charge,for immediate playback or download. 6.
Autorip It is the best selling e-book to which you can uploadbooks and carry them wherever you want. Moreover, the significant thing is thatthe screen are eye-harmless so you don’t hurt your eyes as much as reading abook from a tablet. Vision of the Future In 2016 Amazon founded a newsubsidiary which is called Prime Air. Prime Air is a conceptual drone-baseddelivery system which is now in the stage of the developement by Amazon. This is what is called future of the delivery systems – The Prime Air, whichwas taken as a joke a couple of years ago, is now developing and growing withfull seriousness. As technologycontinues to grow and play a larger role in consumers’ lives, industries havetransformed and adapted as well. Companies have moved away from brick andmortar to predominantly online services as a result of ubiquitous Internetaccess.
Online companies reduce overhead costs, including rent andwages, associated with operating a physical store.While onlineretailers are more convenient, purchases of goods and services are subject toadditional shipping and handling charges incurred by the consumer. Even thoughtechnology has transformed a number of industries over the past 10 years,shipping and postage has remained relatively unchanged. Traditional postalservice providers such as UPS, FedEx have remained the primary source ofshipping and handling for major retailers.Recently, Amazonhas challenged the status quo with Amazon Prime Air. Amazon Prime Air is adrone delivery system which anticipates package deliveries in 30 minutes orless. While the financial and economic impacts of drones are robust, FAAregulations in conjunction with privacy and safety concerns have delayed thelaunch of commercial drone servicesTraditionally, drones had been limited to military use due to high costs andtechnical sophistication. However due to economies of scale , consumerscan now purchase drones for just $60.
With widespreadaccess, consumer companies such as Amazon have explored the use of unmanned aerialvehicles for commercial purposes. Amazon Prime Air has promised 30 minutedelivery service for packages up to 5lbs. Google, in altruistic contrast toAmazon, has developed aerial drones for environmental conservation and deliveryof medicine to remote locations. Powered by batteries, drones are moreenvironmentally friendly than delivery trucks. ConclusionAccording to allthe achievements, organizational structure, and generally the behavior of theAmazon Inc as a company it is obvious that all the tasks, such as developmentof retail business, implementation of new ideas, and etc. Amazon Inc is surelythe leader in the industry.
From the beginning Amazon as a company has alwaysbeen the game changer in the retail business and it is obvious that all of thiscouldn’t be without the leader, of the company Jeff Bezos, who has proven that inorder to move the industry to the future you need to experiment and as hisquote says at the beginning of this essay « It’s not an experiment if you know it’s going towork ».References:· panmore.com/amazon-com-inc-organizational-structure-characteristics-analysis· www.businessinsider.com/jeff-bezos-amazon-history-facts-2017-4?IR=T#amazon-wasnt-the-companys-original-name-1· https://en.wikipedia.org/wiki/Amazon_(company) · www.investopedia.com/articles/investing/010615/how-drones-are-changing-business-world.asp · www.brainyquote.com/authors/jeff_bezos · www.edition.cnn.com/2013/12/02/tech/innovation/amazon-drones-questions/index.html · www.forbes.com/sites/gregorymcneal/2014/07/11/six-things-you-need-to-know-about-amazons-drones/#5247e1fb6777 · www.nytimes.com/2017/06/28/technology/amazons-vision-of-computings-future-an-information-appliance.html