Amazon.com business that deals with electronic products and cloud

Amazon.com

 

It’s not an experiment if you know it’s going to
work.

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– Jeff Bezos

Introduction

Amazon.com
Inc. is the leader in the online retail business that deals with electronic
products and cloud hosting services. The company was founded by Jeff Bezos in
1994 but the website, which is the core marketing and selling platform for the
company, was launched in 1995. Currently, the company’s headquarters are in
Seattle, Washington, US. The company operates several websites that target
different markets i.e. in UK, France, Japan, China, Italy and Germany. The
company is also planning to launch other websites that will target Netherlands,
Poland and Sweden. Apart from selling electronic products, Amazon.com also
offers cloud hosting services to companies all over the world. Amazon is unlike any other retail site, differs
from its competitors in that customers have numerous options when shopping on
the Amazon website. When compared to other book sellers for example, Amazon
offers features that other book sellers do not.

One
of the Amazon’s project – the Amazon Prime program offers different perks, such
as allowing members to “rent” e-books for a short period. Amazon
customers may also shop from a huge variety of items, and even download and
watch television programs or movies. In terms of the Amazon’s Kindle/Kindle
Fire and Apple’s iPad, the difference is in the way that the company makes
money. Amazon strives to make money more from sales after the sale of the
Kindle device than the actual selling of the reader itself. For example, people
who purchase the Kindle will continue to purchase e-books through Amazon. There
is also a Kindle software which enables to use this product on the other
platforms, such as PC’s tablet’s laptop’s and etc.

Throughout the
first four years of business, the company did not make any profit and many
shareholders were overwhelmed by the nature of business the company was engaged in. Soon critics were proved
wrong because during the fourth fiscal year the company made profit. Profit was
not the only book marker but the fact that there seemed to be a major drift in
selling of books from bookshops to eBooks the company was on track to made even
more exploits as the online market continued to increase. As result of the
tremendous growth, Jeff Bezos was announced «Person of the Year» by the Times Magazine.

Key Dates1

·       1994 – Founded by Jeff Bezos

·       1995 – Launch of website Amazon.com

·       1997 – First launch on IPO

·      
1998 – Amazon.com enters the
online music and video business; companies are acquired in the United Kingdom
and Germany.

·      
1999 – Amazon.com expands into selling toys, electronics, tools and
hardware, and Jeff Bezos is named «Person of the Year» 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 Facts

Originally Jeff Bezos wanted
to give the company the magical sounding name “Cadabra. But “Amazon’s
first lawyer, Todd Tarbert, convinced him that the name sounded too similar to
the company named “Cadaver,” especially over the phone. He finally
chose “Amazon” because he liked that the company would be named after
the largest river in the world, which was described on one of the company’s earliest
logos.

Amazon got started out
of Bezos’ garage and the servers that the company used required so much power
that Bezos and his wife couldn’t run a hair dryer or a vacuum in the house
without blowing a fuse.

                                            History

The
Early 1990s:

The
beginning of the success story of the Amazon.com started in 1994 when Jeff
Bezos left his position as vice-president of D.E. Shaw one of the famous Wall
Street firms, moved to Seattle, and began to work out a business plan. He
started to make up a list of 20 products which are more likely to be popular to
be sold on the Using the elimination method he shrank the list to
five most plausible to give profit: CD’s, books, videos, and computer software
and hardware. But final decision was that this venture would sell books over
the Web, due to the large worldwide market for literature. The most suitable
place as the headquarters was Seattle, because of its large technological labor
force and its optimal location for distribution in Oregon region. Then he worked
to raise funds for the company while also working with software developers to
build the company’s vital marketing platform – the web site. It was launched in
1995 and became most popular web site after only four months of operations,
making high marks on several Internet rankings. It climbed up to the sixth place of the ranking of the best sites on
Point Communications’ “top ten” list. Customers could enter search information,
prompting the system to surf the company’s database and find the desired
titles. The program then displayed information about the selection on a
customer’s computer screen, and gave the customer the option to order the books
with a credit card and have the books shipped in a just a few days.

 

It
was not even the end of first month of the launch when the site was already
processing orders from 45 countries worldwide and 50 states across the USA. Majority
of the orders through Amazon.com were directly through wholesalers and
publishers, so no warehouse was needed, so a warehouse in Seattle with only
2,000 titles in stock was enough. Amazon.com would simply receive the books
from the different sources, then ship them to the customer. At first, the
company operated out 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.

 

At
the beginning Amazon faced a lot problems to set any norms as a relatively
young venture in the Internet trading. With that point on the Jeff’s target he started
to seek for new ways on making Amazon.com as convenient as possible to the
maximum types of customers. For those people who knew what book they were
looking for and just wanted quick performance and low cost, Amazon.com offered
powerful search qualities. For the start, it was nearly over 1
million-title database.. For other customers who were just looking for
something to read in a general area of interest, Amazon.com offered topic areas to browse, as well as lists of bestsellers, and
titles that were recently featured in the media. For the people who did not
know what to choose, Amazon offered a recommendation center where customer could
find books based on mood, reading habits, or preferences. The recommendation
center also offered titles based on records of books the customer had purchased
in the past, if they were return customers to the site. As not enough the site
also began offering 10 to 30 percent discounts on majority of titles, making
the prices extremely affordable.

 

Broadening the horizon

The
company started the expansion of its influence range by acquisition of three
companies, two of which were acquired for the further expansion of Amazon.com in
Europe. Both companies gave Amazon not only the access to the new profit
sources in two of most Europe’s most important countries, but it also gave
existing Amazon more resources from all around the world. One of the largest
online booksellers in the United Kingdom – The Bookpages, gave Amazon.com
access to the U.K. market, Telebook, the largest online bookseller in Germany, served
as the entrance to its home market. The third important purchase – Internet
Movie Database was vital for its further movement into online video sales. The
tremendous resources and information of the IMD served as a valuable asset in
the building of the future domination of the Amazon.com

 

Another
sensation happened in 1998 when company announced that it will also expand to
the music industry. Several months before officially opening its music site,
Amazon.com asked its bookstore customers and members of the music profession to
help design the new web site.

                                                                           

At
the of the second quarter of 1998 with very confident number of customer
accounts which left the point of three million far behind and with sales
figures for Amazon.com continued to rise, and more products and titles were
added, the future looked bright for this young venture in the Internet trading.
With music as a part of the company mix on one hand, and video sales on the
other, Jeff seemed to have accomplished his goal of invasion of the online
sales market. As Bezos told in his interview to the Fortunemagazine
in December 1996: “By the beginning of 21st century, there
could be two or three big online bookstores. We need to be one of them.”

It
took only 2 years for Jeff Bezos to realize his statement as by the beginning of
the first quarter of 1998 number of Amazon’s customer accounts was a slightly
above 2 million, it was an increase by the half in just three months, and
mind-bending increase of 564 percent over the previous year, it took Amazon.com
27 months to serve its first million customers and only 6 to serve the second
million. This made Amazon.com the third largest bookseller in the United
States.

 

 

 

 

Organizational
Structure2

Amazon’s
orgaznizational structure is considered as «Functional Organizational
Structure». This structure focuses
on business functions as bases for determining the interactions among
components of the organization. The following characteristics are the most
significant in Amazon’s corporate structure:

 

1.     Global function-based groups

2.     Global hierarchy

3.     Geographic Divisions

 

 

Global function-based groups

It may be considered as the soundest part of the Amazon’s organizational
structure where business has a dedicated team and a senior manager.

This is leads to efficiency in facilitation e-commerce operations within
the company. These are the major function-based groups in Amazon’s
organizational 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 Amazon
Inc, it is expressed in terms of global system of vertical lines of command
influenced by the authority of the firm.     For example, senior
managers’ directives are applied throughout the organization, affecting all
relevant offices of the company worldwide. The strategic objective of this
feature of the corporate structure is to facilitate managerial control of
Amazon’s entire organization.

 

Geographic
Divisions.

 

Amazon’s organizational structure
also involves geographic divisions. In this structural characteristic, groups
are based on geographic regions and related business goals. For example,
Amazon.com Inc. uses geographic divisions to make it easier to manage the
e-commerce business based on economic conditions of certain regions. The
strategic objective in having this characteristic of the organizational
structure is to enable the company to address issues or concerns relevant to
each geographic region, considering differences among regional markets. Amazon
has a simple approach for this structural feature, involving the following
geographic divisions in its operations:

 

 

·       
North America

·       
International

 

 

Innovations3

 

There a lot of things in routine,
which makes our life easier for which we should be grateful to the simple but
genius innovations of Amazon. From purchasing things in only one click to
review lists in websites without which we cannot imagine our online shopping,
everything is invented by the Amazon. Here are some of those innovations which
are genius because of their simplicity.

 

 

1.    
 1-Click

 

Everytime if you buy clothes, or make an order online
and 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 determine
customers’ purchases, your ratings and determine customers’ interest and
recommend something in what that particular customer can be inretested in.

 

3.     Reviews

 

Customers can add a video or written review for any
prodcuct listed on the website to make other customers to make their decision
about item.

 

4.     Amazon Wish List

 

This list enables to customer to add products they
would like to have on the digital ailes of the Amazon.com. With Universal Wish
List customers can add products from any website to their Amazon Wish List in
just one click

 

5.     Aurtorip

 

AutoRip gives customers
free MP3 versions of CDs and vinyl music they purchase from Amazon. When
customers purchase AutoRip CDs and vinyl, the MP3 versions are automatically
added 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 upload
books and carry them wherever you want. Moreover, the significant thing is that
the screen are eye-harmless so you don’t hurt your eyes as much as reading a
book from a tablet.

 

        Vision of the Future

In 2016 Amazon founded a new subsidiary which is called Prime Air. Prime
Air is a conceptual drone-based delivery 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, which
was taken as a joke a couple of years ago, is now developing and growing with
full seriousness.

As technology
continues to grow and play a larger role in consumers’ lives, industries have
transformed and adapted as well. Companies have moved away from brick and
mortar to predominantly online services as a result of ubiquitous Internet
access. Online companies reduce overhead costs, including rent and
wages, associated with operating a physical store.

While online
retailers are more convenient, purchases of goods and services are subject to
additional shipping and handling charges incurred by the consumer. Even though
technology has transformed a number of industries over the past 10 years,
shipping and postage has remained relatively unchanged. Traditional postal
service providers such as UPS, FedEx have remained the primary source of
shipping and handling for major retailers.

Recently, Amazon
has challenged the status quo with Amazon Prime Air. Amazon Prime Air is a
drone delivery system which anticipates package deliveries in 30 minutes or
less. While the financial and economic impacts of drones are robust, FAA
regulations in conjunction with privacy and safety concerns have delayed the
launch of commercial drone services

Traditionally, drones had
been only used in military technical sophistication, and high capabilities in reconnaissance
operation. However due to economies of scale, consumers can now purchase
drones for just $60.

With widespread
access, consumer companies such as Amazon have explored the use of unmanned aerial
vehicles for commercial purposes. Amazon Prime Air has promised 30 minute
delivery service for packages up to 5lbs. Google, in altruistic contrast to
Amazon, has developed aerial drones for environmental conservation and delivery
of medicine to remote locations. Powered by batteries, drones are more
environmentally friendly than delivery trucks.

 

Conclusion

According to all
the achievements, organizational structure, and generally the behavior of the
Amazon Inc as a company it is obvious that all the tasks, such as development
of retail business, implementation of new ideas, and etc. Amazon Inc is surely
the leader in the industry. From the beginning Amazon as a company has always
been the game changer in the retail business and it is obvious that all of this
couldn’t be without the leader, of the company Jeff Bezos, who has proven that in
order to move the industry to the future you need to experiment and as his
quote says at the beginning of this essay « It’s not an experiment if you know it’s going to
work ».