What is behind Amazon.com - Essay Example

What is behind Amazon.com Web has become a necessary tool of many s today. The growth of internet commerce is more than a hundred percentand this is predicted to continue on for at least until 2005 (Burnham, 2001). But until the present years, it is still continually grows in magnitude. Based on a research conducted by Banner on 2000, around 88% of organisations in the UK use the web in their transactions. This is higher than the previous year which is 82%. More and more commercial establishment and marketing institutions are using the web in their businesses. An evolution in the business world occurs with the advancement of the internet technology. Website development was undertaken and become a part of the organisation's activities. From the survey conducted on the several organisations, 34% of them are using the web in their business activities. In the total number of respondents, 27% are using the web in purchasing while 13% are selling their products and the remaining 6% are doing both buying and selling (The Banner Survey, 2000). Companies are maximizing benefits brought about by the internet. Based on studies, the advantageous factors of doing business in the net encourage most businesses to develop their virtual operation. This mainly involves the maintenance of business transactions in the net and developing a virtual interface for the business. The benefits of e-business or business on the web include increased speed of feedback from the consumers. The interaction is in real time wherein the company can immediately answer the questions on the consumers through online information. This is due to the enhancement of technology exchange and improvement in communication which are other benefits of having a business online. This kind of operation decreases the company's operational cost and the requirement for inventory is reduced. The efficiency and productivity of the services were also improved due to standardisation of organisational procedures, thus, improvement in the services offered which ultimately increases customers and profits (Henbury, 2001). The Organisation on Focus Amazon.com is a company that operates online business. The ten year old company was developed by Jeff Bezos in July 1994 and was launched on July 1995. More than 9,000 are employed by the company and cater to about 49 million accounts of active consumers. From its main office in Seattle, Washington in the United States, it expanded into different countries worldwide such as United Kingdom, Germany, France, Japan, Canada, and China. The company offers products and services online that answers the needs of the consumers (Amazon.com, 2006f). The main business strategy is to introduce the company and the products in the most marketable way possible through the website. It is an online presentation of the objectives of the organisation and services that it provides. The visual presentation of the services offered is organised with certain features such as the 1 click technology for consumers' ease in choosing items and ordering. Every category of products has a link wherein more choices are presented. The consumers can also have their own accounts that can keep tract of the purchases made. Other details such as online payment procedure and shipping are also available, thus, once the consumer is ready, order can be placed and be delivered at a specified date (Amazon.com, 2006b). For a new consumer who is not familiar with the transactions in the net, the Amazon.com website is comprehensible. The site presents the pertinent data needed in purchasing products. When a consumer finds that online purchases are easily done, the benefits can be realized and ultimately become a regular online customer. The Role of the Employees in the Organisation Amazon.com employs around 9,000 people covering the total workforce of all the branches worldwide. The company is divided into different organisational units and this includes the corporate offices, the fulfilment centres, the customer service centres, and the software development centres (Amazon.com, 2006e). The Software Development department is the one responsible in the development of the company's virtual operation. The department is composed of engineers and personnel that are involved in the large-scale problem solving and virtual interface management. Coordination with the software developers and suppliers as well as the maintenance of the online consumer accounts are also part of their function. The information technology group is designated to maintain the volume of information stored that being used for the business operation including the data management for the different departments. This group is also the one responsible in the updates of the technology manages the company's database and maintains the networking among the different branches of Amazon.com worldwide (Amazon.com, 2006e). The retail product management and merchandising department is involved in developing new products. This particular group is composed of product managers that are assigned to different products. There are designers whose work is to determine the new products needed by the general public. Other members of this group are the dealers and merchandisers. This department decide and create new class and product classifications on the basis of the needs or demands of the market. Another function is to respond to the needs of the public of any age, gender or nationality through the production of wide range of products and services. The main goal of the department is to provide product assortment at cheaper price. Maintaining the stocks of all the products to avoid shortages is also the role of this group (Amazon.com, 2006e). The operation department is in-charge in all aspects of operations and the management of the supply chain. The group is also involved in customer related services. Upon confirmation of purchase, this group see to it that the order was supplied and transported through partner logistic companies. They also coordinate with other departments and branches regarding the product's availability. The main goal of this particular department is to render the needs of the consumers and replies to their inquiries. This group are composed of business analysts, customer service personnel and other support staff with the function of delivering the purchased goods of the consumers on time (Amazon.com, 2006e). Business development and sales department is in charge of creating new business alliance and maintaining an existing relationship with traders and manufacturers for the promoted products and services. The group is also doing searches for large or small companies that offer rare items that are hard to find in the market and sign them in for their products. Such business relations are the main contributor of company's product providers resulting in expansion of the already wide range of products covered by Amazon.com. Relationship with companies and developer of new technologies ensures updated techniques regarding new products and those that can be used for improvement of the business (Amazon.com, 2006e). Finance department of Amazon is comprised of financial specialist and personnel assigned to the different departments of the company to assess the financial status of every group and immediately solve any problems related to finances that may arise. They also analyse the financial situation of each department and outline their possible course of action. The representative of the financial group holds a distinctive position in key departments such as the Retail group, Operations, Business Development and Software Development. Aside from that these group has dual roles, performing the customary accounting, treasury and financial related work. Also in most cases, the group also performs administrative roles in the company (Amazon.com, 2006e). Human resources department is in charge of choosing, hiring and maintaining the people needed by the development of the company in its operation. Another important unit is the legal team that guides the company through the legal aspects of the company's business operation internally and its external affairs. This group is involved in different legal aspects such as operational, manpower and intellectual and patenting issues (Amazon.com, 2006e). Generally, a virtual company's organisation is similar to the brick-and-mortar type of business because every component and units that are required for the business to run is available. The differences arise on the manpower distribution of the two types of businesses. For those companies that operate through the web, departments such as software development, information technology and operations and supply chain requires more manpower compared to the businesses that is not web-based. These groups also have the highest amount of workloads that are done on a routine basis throughout the day. This is due to the fact that the web operates 24 hours a day and 7 days a week, thus, maintenance of such operation is also done so as to answer to the needs of the consumers any time of the day. In a virtual company, the employees have a modified role. The duties and roles that they hold are loyalty for unseen consumers. These consumers to whom they have no personal association with are reached by providing on-time services regardless of time differences and geographical challenges. They need not use marketing and selling strategies because a well presented website does the job. The main objective in a virtual company is to maintain and continually improve the virtual platform that performs the frontline marketing and selling for the company. The Sense of Identity Due to having the rigid competitors in online business, Amazon.com must maintain the competitive edge and advantage. From being a bookstore, the company has expanded over the ten-year period. The competitive advantage of Amazon.com is rooted on the fact that it can be considered as a pioneer in the business. During the onset of the company's success, there is less competition, thus, a large part of the profits were invested in technology for further growth of the company. This growth on both software and hardware technologies is now the key for their present success. The company knows how to reach a certain goal and it had made its way around the e-commerce world. From a company that serves as an on-line bookstore it expanded its product coverage then continually invests on technology. Although the company encountered issues regarding the use of patented technologies, it can protect its technological advantage which appeals to investors (Amazon.com, 2006c). The Amazon.com targets every member of the population by giving every category possible that can attract the consumers and finds those products they want for themselves. The website also gives the site another advantage. It functions not just for promoting and selling but also as an informative media in relation to the products on sale. People can find comments and feedbacks of other consumers in the editorials. Another feature that makes the website unique is the feature that a buyer can choose a book and view excerpt which is very helpful in making a decision in buying. Such strategy of posting editorials and comments on the site also gives the consumer a feeling of concern and empathy from the company on buying the right product that will answer to their needs (Amazon.com, 2006c). Another feature that gives the advantage to the company is its on-time delivery of purchased products. This is done through the operations department and its coordination with the different departments and among different branches. This is made possible through the availability of the branches worldwide that was the objective of the company's expansion a few years back (Amazon.com, 2006f). Through the features presented, Amazon.com maintains its edge over other online companies that offer the similar services. The "Real" Organisation An important point is the study of the organisation, that is Amazon.com, is the operation and the people behind the system. Amazon.com and its success can be attributed to its workforce worldwide and the coordination between the different branches and units. The company is composed of the different branches situated at strategic places to serve its clients' needs. The main site that started its propagation is located in Seattle, Washington. Through the decade it has expanded and extended to key places such as United Kingdom in October 1998 as Amazon.co.uk and in Germany also in October 1998 as Amazon.de. The branch in Japan is known through the web as Amazon.co.jp which was established in November 1999 to reach the Asian countries. It was also established having the local language rather than English for better communication with the consumers. Amazon.com in France is Amazon.fr, established on August 2000. Amazon.ca of Canada was established on June 2002. Joyo.com in China was then opened in August 2004 to further accommodate the increase in online accounts (Amazon.com, 2006f). One of the primary goals for a company to be established is determining what values they need to possess. The company along with its employees cater to the public through the core values. One of the values the company considered as important is being customer-based. They aim to value the needs of the consumers more than their own, which is important in any business that provides products and services. Another is the aim for continuous innovation done by determining what the consumers want, then finding ways of providing the products in ways most convenient to them. With all the opportunities in technology of present era and increasing needs of the public, Amazon.com makes sure that their present status is maintained. Another course of action of the company is having a long term plan for the company and strategically making decisions. Frugality is also another value that has a place in the company. This value guides them in making decisions on the company's resource. They made sure that capital is spent to things that will enrich the company to be able to serve the consumers better (Amazon.com, 2006f). The employees are the most important tool in the operation of Amazon.com. Aside from being trained and educated for the position, the employees are encouraged. To be motivated, the following benefits are given to the employees aside from their regular pay. Comprehensive health care plan that also covers dental and vision is included. Basic life and accident coverage, disability plans and dependents-care referral, financial and legal services are provided to the workforce. Employees are also given two weeks of vacation with pay per year in the first year of their service. This becomes three weeks on the second year. For employees that work on hourly basis, 40 hours of vacation is given for the first year. On the second year then 40 hours more is provided, giving them 80 hours of vacation and in addition there are 5 days and 6 holidays can be utilized. Another benefit received by full-time employees is the Restricted Stock Units, savings plan and other discount programs (Amazon.com, 2006a). On the other hand, labour related problems arise. Due to the aim of the company to expand the coverage even more, the customer service department has an overload of works needed to be done and consumer request to attend to. This is mainly due to the fact that the operation of these groups is continuous and in shifts to be able to attend and cover the needs of different consumers at different time zones. In relation to this, there had been news of increasing discontentment on their part because the company values the e-commerce provider such as the software developers more. The problem arises due to the low compensation but there is an overload of work for the employees on the customer service department (Sterling, 2001). Another issue is the absence of labour union in the company. This resulted to the employees being encouraged to organise such group by the trade union in the US. The union believed that such organization is necessary to be able to protect the rights of the workforce. Upon this news of organisation of a labour union, the plan of the company to lay off 15% of its labour force arises. Such an event coincides with the employees' efforts to organise their union, thus, Amazon.com is being suspected of unfair labour practice and branded as union buster by the trade unions (Sterling, 2001). Another important tool in the company is the technology that it has already developed through the years. It is also considered as the blood and the main driving force of the company. According to the study conducted, Amazon.com is vigilant in making sure that their technology cannot be imitated, thus, attracting investors that comment that the company know their way in the virtual business world. A large part of their capital is also invested in the maintenance and improvement of the technology that they value. Advanced tools including computers are the main part of their expenses along with the software development. It can be considered that having a large scale software department, Amazon.com is a laboratory for the testing and discovery of e-business technologies. The Roles of Virtual Technologies in the Organisation Like any other trading or marketing companies that are not in the web, Amazon.com has the ability to exist off-line. This is due to the presence of cumulative units that are essential in any businesses. With the use of the internet, the company only maximised and used the benefits of being online to the fullest advantage. In the absence on the web, although it will survive, it will not be as popular as today. The coverage of operation will be small and link with other companies is less because these companies are just maximising the popularity and accessibility of Amazon.com. Without the online transactions, the company will just be a common bookstore around the corner. With the progressive mind of the owner establishing a common company is not encouraging without its possible success and expansion through the web, thus, it is probable that he will not create such company. There are so many beneficial gains that a company could get for being on-line. The main one is its accessibility to the customers. The companies can reach out to the consumers with ease. The consumers as well are able to get the supplies or services needed with less effort. Almost all of the growing establishments nowadays have access in the internet. All the business requirements, needed supply and materials as well as their major and minor transaction are done in the web. Ultimately, those companies doing their purchase in the internet will save time and personnel efforts and thereby incurred less operational cost and gain more profit. As long as any marketing company, Amazon.com for that matter, is being able to provide efficient and quality service to the costumers, it will stay and grow in the business and will become popular (Scripophily.com, n.d.). Being well-known to the business community and still increasing in popularity through the net, Amazon.com opened some more line of products being sold in cooperation with other business establishments. Those companies that wanted to sell their products through Amazon.com are entertained. With the continuous boom, it extended its operation in Europe by buying the online booksellers in UK and Germany and other companies that offers different products and services in the area. With the continuous popularity, several more sites were bought later by the company. In 1999, Amazon.com started doing online auction and in 2000, signed a 10-year business deal with a toy company. The company also added a foreign language sites to handle their business activities in France as well as in Japan. Through the years more partnerships and business relationships were established and more companies invested in Amazon.com. As the company grows, more and more products are being sold and these goods are products of partner companies. The relationship is beneficial both ways, Amazon.com increases the products being sold while the partners get the much needed promotion while also having a fixed and specified market and that includes the consumers on line through the company (Scripophily.com, n.d.). The present status of the company Amazon.com, in the market industry and in the community, was attained primarily because of the existence and use of virtual technology. The internet technology has played an important role through the evolution of the company. Thus, without the net, the company will not be what it is at present. Double the efforts on marketing strategies and operational costs are inevitable for the company to attain the same success in the absence of the internet technology. REFERENCES Amazon.com (2006a). Amazon.com career site. Retrieved April, 30, 2006 from: http://nyjobsource.com/amazon.html Amazon.com (2006b). Amazon.com homepage. Retrieved April, 30, 2006 from: http://www.amazon.com/gp/homepage.html/ref=three_tab_/104-3252083-4495944 Amazon.com (2006c). Company History. Retrieved April, 30, 2006 from: http://www.amazon.com/gp/browse.html/ref=sc_bb_l_1/104-3252083-4495944%5Fencoding=UTF8&node=14237851&no=14201851&me=A2UFG9NDFLOV22cv Amazon.com (2006d). CompanyValues. Retrieved April, 30, 2006 from: http://www.amazon.com/gp/browse.html/ref=sc_bb_l_1/102-3233863-7356105%5Fencoding=UTF8&node=14234371&no=14201851&me=A2UFG9NDFLOV22 Amazon.com (2006e). Departments. Retrieved April, 30, 2006 from: http://www.amazon.com/gp/browse.html/ref=sc_bb_l_1/104-3252083-4495944%5Fencoding=UTF8&node=14205761&no=14201851&me=A2UFG9NDFLOV22 Amazon.com (2006f). Research the Company. Retrieved April, 30, 2006 from: http://www.amazon.com/gp/browse.html/ref=sc_bb_l_1/104-3252083-4495944%5fencoding=UTF8&node=14237951&no=14205761&me=A2UFG9NDFLOV22 Burnham, R. (2001). How To Kick Ass Online Starting With Only An Idea. New York. pp 10 - 20. Henbury, Cheshire. (2001). E-Business Benefits. Cheshire Henbury eBusiness Master. Retrieved April, 29, 2006 from: http://www.cheshirehenbury.com/ebusiness/ebbenefits.html McCausland, R. (1999). Cashing In on E-commerce. Accounting Technology. Scripophily.com (n.d.). Amazon.com - Dot Com Bookstore. Retrieved April, 30, 2006 from: http://www.scripophily.net/amazoncom.html Sterling, R. (2001). Amazon: Unionbusters.com Disinformation. Retrieved April, 30, 2006 from: http://www.disinfo.com/archive/pages/dossier/id834/pg1/ The Banner Survey (2000). Getting to grips with e-business. Retrieved May 3,2006 from: http://www.btinternet.com/davidmurphy1/Marketingbannersurvey.html Read More