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. 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 Dates1· 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 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 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’s firstheadquarters was the Jeff’s garage and the servers that the company usedrequired so much power that there was not a day without which Jeff blew a fuseafter turning on a hair dryer or another electronic device. HistoryTheEarly 1990s:Thebeginning of the success story of the Amazon.com started in 1994 when JeffBezos left his position as vice-president of D.E. Shaw one of the famous WallStreet firms, moved to Seattle, and began to work out a business plan.
Hestarted to make up a list of 20 products which are more likely to be popular tobe sold on the Using the elimination method he shrank the list tofive most plausible to give profit: CD’s, books, videos, and computersoftware and hardware. But final decision was that this venture would sellbooks over the Web, due to the large worldwide market for literature. The mostsuitable place as the headquarters was Seattle, because of its large technologicallabor force and its optimal location for distribution in Oregon region. Then heworked to raise funds for the company while also working with softwaredevelopers to build the company’s vital marketing platform – the web site. It waslaunched in 1995 and became most popular web site after only four months ofoperations, making high marks on several Internet rankings. It climbed up to the sixth place of the ranking of the best sites onPoint Communications’ “top ten” list. 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.
Itwas not even the end of first month of the launch when the site was alreadyprocessing orders from 45 countries worldwide and 50 states across the USA. Majorityof the orders through Amazon.com were directly through wholesalers andpublishers, so no warehouse was needed, so a warehouse in Seattle with only2,000 titles in stock was enough. Amazon.com would simply receive the booksfrom the different sources, then ship them to the customer. At first, thecompany operated out of Bezos’ garage, until it was clear that it was going tobe a success, necessitating a move to a Seattle office, which served asthe customer support, shipping, and receiving area. Atthe beginning Amazon faced a lot problems to set any norms as a relativelyyoung venture in the Internet trading. With that point on the Jeff’s target he startedto seek for new ways on making Amazon.
com as convenient as possible to themaximum types of customers. For those people who knew what book they werelooking for and just wanted quick performance and low cost, Amazon.com offeredpowerful search qualities.
For the start, it was nearly over 1million-title database.. For other customers who were just looking forsomething to read in a general area of interest, Amazon.com offered topic areas to browse, as well as lists of bestsellers, andtitles that were recently featured in the media. For the people who did not knowwhat to choose, Amazon offered a recommendation center where customer couldfind books based on mood, reading habits, or preferences. The recommendationcenter also offered titles based on records of books the customer had purchasedin the past, if they were return customers to the site. As not enough the sitealso began offering 10 to 30 percent discounts on majority of titles, makingthe prices extremely affordable. Broadening the horizonThecompany started the expansion of its influence range by acquisition of threecompanies, two of which were acquired for the further expansion of Amazon.
comin Europe. Both companies gave Amazon not only the access to the new profitsources in two of most Europe’s most important countries, but it also gaveexisting Amazon more resources from all around the world. One of the largestonline booksellers in the United Kingdom – The Bookpages, gave Amazon.comaccess to the U.K. market, Telebook, the largest online bookseller in Germany, servedas the entrance to its home market.
The third important purchase – InternetMovie Database was vital for its further movement into online video sales. Thetremendous resources and information of the IMD served as a valuable asset inthe building of the future domination of the Amazon.com Anothersensation happened in 1998 when company announced that it will also expand tothe music industry. Several months before officially opening its music site,Amazon.
com asked its bookstore customers and members of the music profession tohelp design the new web site. Atthe of the second quarter of 1998 with very confident number of customeraccounts which left the point of three million far behind and with salesfigures for Amazon.com continued to rise, and more products and titles wereadded, 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 theother, Jeff seemed to have accomplished his goal of invasion of the onlinesales market. As Bezos told in his interview to the Fortunemagazine in December 1996: “By the beginning of 21stcentury, there could be two or three big online bookstores. We need to be oneof them.”Ittook only 2 years for Jeff Bezos to realize his statement as by the beginning ofthe first quarter of 1998 number of Amazon’s customer accounts was a slightlyabove 2 million, it was an increase by the half in just three months, andmind-bending increase of 564 percent over the previous year, it took Amazon.com27 months to serve its first million customers and only 6 to serve the secondmillion. This made Amazon.com the third largest bookseller in the UnitedStates. OrganizationalStructure2Amazon’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 groupsIt 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 Innovations3 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. RecommendationsThe 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 FutureIn 2016 Amazon founded a new subsidiary which is called Prime Air.
PrimeAir is a conceptual drone-based delivery system which is now in the stage ofthe 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 growingwith full 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 hadbeen only used in military technical sophistication, and high capabilities in reconnaissanceoperation.
However due to economies of scale, consumers can now purchasedrones for just $60.With widespreadaccess, consumer companies such as Amazon have explored the use of unmannedaerial vehicles for commercial purposes. Amazon Prime Air has promised 30minute delivery service for packages up to 5lbs. Google, in altruistic contrastto Amazon, 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· http://www.businessinsider.com/the-innovations-that-took-amazon-from-online-bookseller-to-dominant-global-marketplace-2013-10?IR=T 1 https://en.wikipedia.org/wiki/Amazon_(company)2panmore.com/amazon-com-inc-organizational-structure-characteristics-analysis3 • http://www.businessinsider.com/the-innovations-that-took-amazon-from-online-bookseller-to-dominant-global-marketplace-2013-10?IR=T