Assessment3 Amazon To Simplify Your Life

AMAZON TO SIMPLIFY YOUR LIFE

 

The Amazon company logo, as shown in Picture 1, symbolizes that Amazon is selling everything, from A to Z, shown by the arrow that is connecting this both letters. Aside to this, the curved arrow also represents smile where consumers would be happy and have a smile on their face by the shopping experience provided by Amazon. With prominent logo and dependable service had caused Amazon to establish a strong position in the market, and further becoming very demanding platform.

 

Video: https://youtu.be/ZQ71lpOm1S0

 

Amazon is one of the online platforms for consumers to sell or buy products, pay, or keep money and further acting as a one stop marketplace to fulfil a consumer need. Amazon together with variety of online shopping platforms has emerged such as eBay, Etsy, and Alibaba to provide consumer needs and also acting as one stop marketplace in the economy.

 

To break this essay down, the first section will be covering the definition of Amazon and how it serves its purpose, while the second section will be explaining the history and company development from the year it was established. Further to this, in the next section, Amazon’s business model and internet ecology will be explained. Thus, this paper will be conducting a study on how Amazon’s strategic promotions, products and services had been used to mobilize social and cultural changes.

 

Introduction

 

Amazon.com is an all-in-one marketplace platform where people can sell or buy products without spending time to go out to shops as traditional methods. Amazon provides almost all levels of Internet services through its goods and services.The founder is Jeff Bezos who is also the current Chief Executive Officer (CEO), ever since May 1996 (DePillis & Sherman, 2019). Amazon is considered a well based and established company, as currently it is ranked top retail e-commerce company of 2020, according to eMarketer (eMarketer, 2020).  It is the largest online direct selling retailer in the United States and has become one of the largest cloud computing companies in the market. In addition, it is also an important IoT research and development company.Basically, Amazon started with selling books online, then evolved from selling house décor, stationary, mobile phones, virtual grocery stores, advanced IoT sectors and Cloud computing until branding itself as the ‘everything store’ (Krishna, 2020). The fact that Amazon has the convenience of delivering good at the doorstep, open e-wallet and variety of reward programme had also improved the Amazon branding and consumer loyalty (Krishna, 2020).

Even though Amazon has managed to expand its company into variety of sectors, the condition of internal situation needs evaluation, such as workers and employees. However, Amazon’s success is rooted in its exploitative labour arrangements and unsustainable energy use. A company this advanced and supporting various sectors required a huge group of employees and workers to support each purchase. And during this period unsustainable energy will be consumed in large quantities.Therefore, when increase in order occurs, employees are required to work addition hours to support and fulfil these purchases. In regards to this, Amazon is does have issues with forcing employees working overtime during peak shopping seasons and this is severely occurred at Amazon’s warehouses at UK, US and their supply chain in China (Evans, 2020). According to Ignite Digital, some ofthe workforce issues are Amazon for being sued for workers not receiving overtime pay and rest breaks, occurred at UK warehouses. In addition to this, workers were being forced to work extra shift hours, going up to 11 hours of work a day, aside to facing disciplinary actions if they were to take long bathroom breaks (Evans, 2020).

Furthermore, in terms of the Internet of Things, Amazon’s representative is Alexa voice assistant technology, which is currently mainly used in smart homes. On the one hand, Alexa provides a lot of convenience for residents’ modern life, on the other hand, the data privacy issues it involves are unavoidable. According to Pfeifle(2018)with the advancement of technology, the definition of “home” is gradually becoming chaotic. For example, the house imager included in Alexa technology can scan the internal structure of residential houses. However, this technology is currently not recognized by law, because the Supreme Court protects the privacy of residents and the sanctity of houses. This constantly advancing platform, does have proven to provide positive effects to the economic and financial state of many parties, but the cons of this can not be ignored.

 

History of Amazon

As mentioned earlier, Amazon was established as an online book store, based at Seattle Washington, specifically Bezos’s garage on 1994. Jeff and his wife, MacKenzie selected Seattle as base, for its reputation of a tech hub and most of their target customers wouldn’t be charged tax (DePillis & Sherman, 2019). In terms of political economy, Amazon is the world’s largest company, and it has led Microsoft in terms of market value.According to Forbes, Jeff Bezos is the world’s richest man for the third time in a row, with a worth of $113 billion, influenced by a 15% rise in Amazon’s shares since 2019, surpassing Bill Gates for Microsoft.  Amazon and the data services it provides was the main contribution for Bezos’s title as on 2019 itself, Amazon had obtained $280.5 billion in revenues and a net profit of $11.5 billion. Bezoz is not only owner of the world-renowned Amazon but, owns The Washington Post, a publishing company and Blue Origin, aerospace company that is developing rockets for commercial use. In addition to this, Bezos has variety of investments such as in Google, being on of the first investors, Airbnb, and Everfi, an educational software platform.

The company name wise, Bezos originally intended to call his company ‘Cadabra’ from the word ‘Abracadabra’. Unfortunately, the target groups were having trouble in pronouncing or hearing the word accurately and too often heard as “Cadaver”which was not suitable (McFadden, 2019). Finally, Bezos obtained inspiration form a dictionary and found the word “Amazon” and he found it fitting as he envisioned the online store to become the biggest platform in the world, similar to the biggest river on the planet (McFadden, 2019). In a robust nutshell, from Cadabra into Cadaver and finally resorting to Amazon, where Bezos registered the company officially.

JeffBezos was not intending to permanently settle in selling books online, but based on his business plan, he expanded his company in selling music and computer games from the year 1998 (McFadden, 2019). At the same time, Amazon had expended its service internationally in regards to online bookstore at the United Kingdom and Germany. Further to this, Bezos had included electrical appliances, home improvement products, software’s to name a few (McFadden, 2019). Moreover,  Amazon has also developed Alexa, Zappos, Pillpack, Twitch and Audible to name a few.

 

Amazon Ecology

Aside from selling Amazon’s products, third part seller such as small business owners, entrepreneurs are also able to utilize this platform. Seller and third-party vendors will sell items and products by shipping them to Amazon fulfilment centres including the inventory count. Amazon will include required packaging; processing customer payments and the vendors will receive income accordingly. Aside to this, Amazon has introduced “AmazonGo”, a grocery shopping experience where consumers will not have to que and just use AmazonGo account to enter the outlet, collect the goods they need, where the items will be added into a virtual cart, then just leave. Once the customer leaves the AmazonGo outlet, the app will automatically calculate the price and deduct the amount for their account. This is very convenient for consumers to do shopping as they are saving a lot of time and very convenient. Cloud computing by Amazon, Amazon Web Services (AWS), is also a very demanding item in the market. AWS delivers IT resources over the internet with pay-as-you-go price. Customers are able to access technology services, such as databases, storage, and computing power, on a when-needed-basis from Amazon Web Services (AWS).

Similar like other well established and prospering companies, Amazon too has its partnering group to provide consumers with goods according to their needs. Some of the partnerships are Paypal, where consumers are giver several choices of payment method in order to obtain diverse groups as consumers. In addition, DC Comics where Amazon will be able to sell popular comics with exclusive digital rights such as Batman, Superman and Sandman. Amazon had also joined hands with United States Postal Service to conduct delivery, that includes Amazon’s standard shipping rates, initiated in metropolitan areas of Los Angeles and New York. Amazon ventured with one of its seller’s JV Appario Retail owned by Patni Group on the year 2007, which has recorded a major increase in their revenue.

Amazon has a vast group of competitors as it offers more than one type of service. Amazon’s online store promotes and provides a wide selection of goods including music, games, e-books, and household products. In addition to this, Amazon also promotes third-party vendors to sell their goods to diversify the products on its platform. Based on this, major competitors include Alibaba, ebay, Etsy and Vipshop ZHoldings to name a few, as these companies provide similar services to its consumers (Segal, 2020). In regards to physical store, Amazon has equipped with similar products as its online platform, in order for consumers to purchase goods if they don’t prefer online or urgently seeking for the item. Therefore, Amazon competes with Walmart, Target, Costco and Big Lots (Segal, 2020). Apart from this, Amazon also provides subscription services, mostly popular in Amazon Prime that promotes e-books, audiobooks, and digital music to name a few. IN regards to this, Amazon’s competitors would be Netflix, Google with its Play Store and Apple with iTunes (Segal, 2020).

Amazon’s target consumers are not specific to one group, as it provides literally everything to everyone that wants it, therefore all types of demographic groups are targeted. In general, Amazon targets people with paying tools access such as debit or credit card, PayPal or others. This can further explain with the fact that Amazon online platform is equipped with diverse products ranging from house-hold items, education related products, software and IT related databases, storages and many more.

 

Amazon Ecosystem

 

  

 

Amazon Innovative Transformation

 

Amazon has been utilizing the benefits of internet ever since it was established. Bezos was determined to operate an e-commerce and had diversify the product option. Amazon is known to upgrade their platform according to environment changes and also had introduced variety of innovative creation to simplify lifestyle of the consumers. E-Commerce wise, Amazon had included features such as filters, in which consumers are able to narrow down their option according to price and shipping. This has improved online shopping experience to consumer due to its convenience and how less time its consumers to search an item. In addition to this, Amazon has included interactive chat sites, that is able to assist consumers in regards to query or product information. Similar to Amazon, eBay is also equipped with these features but business model wise, eBay is considered an auction house and a marketplace that comply to third-party buyers and sellers (Investopedia, 2020). Buyers will visit eBay to search for products they want to buy from individual sellers, further placing a bid on items through individual auctions. eBay also operates on a wholesale pricing strategy, and has specific time frame for the biding to commence and sell the product to the highest bidder. Conversely, Amazon is a direct provider of goods, and customers visiting its site view products that Amazon maintains as inventory in its large network of warehouses. Amazon also allows third-party sellers but need to keep the majority products in-house (Investopedia, 2020).

On the other hand, Amazon’s various development has generated job offers to the population in the United States. Based on About Amazon, Amazon has created over 2.7 million jobs in the US, and contains approximately 800,000 US employees across numerous states and countries (Amazon, 2020). In addition to this, Amazon’s investments have produced a ripple effect that generated more than 780,000 indirect working opportunities. Amazon’s platform also supports small business and supporting them in using Amazon platforms to sell their products (Amazon, 2020). The consumer behaviours have also been impacted by the development of Amazon, as people are more prone to purchase products in a daily basis, rather than occasional purchasing. Consumers are more inclined towards online shopping as there are options such as free shipping, discount vouchers and promotional offers, causing the price to be cheaper. In addition, given Amazon’s huge retail website and delivery capabilities, Amazon’s gift certificates are like a global currency (Bergvall,2014).

As mentioned earlier, when the demand is high, the company need to have the sufficient resource to support the demand, in this case the employee, who fulfil the order. According to The Guardian, Amazon has recorded as one of the highest employee turnover company in America, aside to having the tendency to locate its warehouses in rural areas also makes it more difficult for workers to leave Amazon to find higher paying work (Sainato, 2018). Forcing employees to work additional hours and not providing sufficient breaks are some of the down falling occurs in Amazon warehouses. Amazon warehouse is condemned unsafe and gruelling conditions at warehouse being dangerous. Employees are constantly fired for verity of reasons or getting injuring during work.  Fulfilling orders is a vital motive but improving and maintaining a safe environment for the workers is also crucial. Employees’ welfare is vital, inclusive of environment, rest and pay.  The reason for this phenomenon is that Amazon adopts a crowdsourced labor and employment model. Its governance structure is such that Amazon exempts all responsibility for quality, safety, or payment issues related to transactions between requesters and workers, and stipulates: “You shall bear the risk of using the website.” Without real legal protection, this can reduce the regulatory requirements for paying the minimum wage (Bergvall,2014).

 

In terms of network services, Amazon Web Services (AWS) controls more than 50% of the global cloud computing business (Piper, 2019). AWS is Amazon’s cloud services company, which provides computing power, database storage, content delivery and other functions. Cloud computing services mainly include the following three types: infrastructure services (IaaS), platform services (PaaS) and software services (SaaS). According to Adler (2016), AWS is the first company to bring cloud computing products to the market and has achieved considerable market leadership. However, although cloud computing technology seems very popular in the market, it is not as reliable as it seems. Because cloud computing is an intangible network infrastructure and has a physical presence on a global scale. Moreover, to maintain stable cloud computing services, AWS has been consuming a large amount of unsustainable energy, which will have an irreversible negative impact on the environment. In addition, cloud computing technology is still risky. For example, unauthorized users or hackers may access the user’s confidential data, causing user privacy issues. In theory, the data stored in the cloud is very safe, but once the data is lost, if the user does not perform a local backup, the data will be lost forever. Therefore, the defects of cloud computing technology at this stage also reflect the development trend of cloud computing industry, especially in terms of privacy protection and data security.

 

As Amazon’s business continues to expand further to the Internet of Things,Amazon has introduced Alexa, an artificial intelligent bot with voice command skill to enhance IoT experience. Alexa is known to report headlines, check and update the weather, play music according to demand, search the internet, turning house switches and many more. This has been very demanding and Amazon’s revenue has skyrocketed (Pfeifle, 2018). Amazon has proven innovation using internet in Alexa, and still continues to innovate this voice-controlled device (Pfeifle, 2018). This very useful invention, also needs a strong data and privacy protection, as this device is constantly listening (Lau, Zimmerman, & Schaub, 2018). Amazon’s Alexa smart home devices has an issue where, the conversation history feature could allow people have access to personal information, banking data history, or any other information. This issue is very sensitive to users. Regarding the specific extent to which Internet of Things electronic products infringe on user privacy, there is no specific legal determination. However, Pfeifle(2018) points out that the government’s attitude towards this is that companies should focus on protecting user privacy in the design of their products; and the legislature should also legislate to ensure that the private information of citizens stored in electronic products is secured.

 

Summary

Amazon has utilized the internet platform as soon as it was established, where it was initially operating as an online bookstore, providing consumers will diversify book collection. As long they operated, Amazon has adapted to the major change occurred in the internet platform and able to obtain and brand itself strongly in the market. As the internet was evolving, Amazon had evolved as well, by constantly changing and upgrading its platform into more interactive and productive e-commerce platform.

Amazon had developed its e-commerce sites and had expanded to neighbouring countries to expand its territory. Providing specific search engines, price range filter and custom search had also given a positive feedback to Amazon, where consumers were more satisfied by the experience they obtained from shopping on this site.

Aside to consumer, the workforce needed had also increased due to the development of Amazon worldwide. As the internet developed, Amazon had developed and spread its wing to cover vast group of consumers. This has caused the demand of goods to increase, further the required time to complete a shipping or send and order needs to faster. Therefore, Amazon had opened numerous fulfilment centres and this had given job opportunities to the population.

On the other hand, the reason why Amazon has such a large market share is inseparable from its exploitative labour model and long-term unsustainable energy consumption. In addition, Amazon’s snooping of users’ personal privacy information is also worthy of continuous attention from the entire society.

Reference

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Adler, B. (2016). Cloud compute: AWS, Azure, Google, SoftLayer compared. InfoWorld.com. Retrieved from: https://link.gale.com/apps/doc/A481382363/ITOF?u=usyd&sid=ITOF&xid=2cee5514

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Shuhui Zhang
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