Business, Social Responsibility, And Corruption For Strategic Management

Corporate objectives

Describe about the Business, Social Responsibility, And Corruption for Strategic Management.

The strategic management tends to coordinate the activities in various functional areas of the business to attain the long term organisational objectives. In the similar instance, Branco and Delgado (2012) mentioned that the strategic management is the on-going process to formulate the strategies that introduce the profits to the organisation and creates the harmony between the environment and organisation.  It has been assessed that the contemporary market has provided wider opportunities to the e-commerce firms. Considering the strategic advantages in the new external environment, e-commerce would enhance the capacity of improving the business environment.

Bremer (2008) determined that the internet offers an affirmative effort and chances to the retailers based operators to increase the product visibility through the soft marketing approach. Amazon.com the biggest retail giant in the e-commerce industry has been incorporated on May 28, 1996. The brand offers a wider range of products and services through the individual portals and intermediaries. Therefore, the current study would evaluate on the corporate objective of Amazon, identifying its external and internal strategic capabilities and would also emphasise on its competitive analysis.

According to Carroll and Shabana (2009), Amazon Inc. is the American online retailer the principally sells the product over its ecommerce marketplace and provides wide ranges of products and services through its subsidiaries. The brand managed to out ship its product line in 11 countries. Crowther and Reis (2011) inferred that the firm follows the mission statement of guiding the force behind the leadership decision. The specific business attributes had facilitated the management to withstand the revenue of $61.09 billion in 2014 and net profit of $39 million in the similar year. In the context of the current subject, Chan et al. (2009) mentioned that Amazon basically believes in delivering the appropriate services to the end customers. It has been inferred that Amazon had been considered as the exclusive brand that provides faster and 1 day delivery options to the end customers. Supporting the latter assertion, Crane et al. (2009) stated that none of the substitute brands provide the similar service facilities to the customers. Although Amazon Inc, charges money from the customers for its faster delivery options, yet, the customers are highly satisfied with the faster delivery options,. Thus, as per the current year’s statistics, the operating cash flow of the Amazon had increased by 47%, which is approximately $11.9 billion.  Hence, the as per the statistics of the previous year, the net sales of the brand had enhanced by 20%, thus, the management had predicted that by the end of the fourth quartile Amazon can increase its sales up to 22%, which is near about $35.7 billion.

External analysis

Macroeconomic analysis

Political

The political aspects like copyright issues, unexpected regulatory changes, consumer perceptions and the availability of the well expertise developers creates a negative impact on the organisational operations. In the specific content, Eizmendi (2008) denoted that the European Union is far stricter than the US trading rules, thus, it had been an expensive and challenging effort for the authorities to enhance the e-business in the European market. The strict regulations had enhanced the difficulty level of Amazon to distribute its digital content to the European region. Moreover, Gupta (2010) notified that the other eco-political sources like shipping charges and the trade barriers imposed by the different regions has affected the profitability margin of the organisation.

Economic

In the circumference of the present inference, Fontaine (2013) determined that the economic factor the regulated imports, longer payment cycles and currency fluctuating exchange rates had adversely affected the revenue margin of the Amazon. Mallin (2012) stated that the brand had the plan of internationalising its business, thus, in order to overcome the financial scarcity, the management of Amazon had made the business collaborations with the domestic companies. The specific approach had benefitted the enterprise to make the international payment on the company’s behalf. Considering the prior statement, Hawrysz and Foltys (2015) asserted that the above approach had affected the pricing policy of the particular enterprise, since; the management cannot ship the product free to its international customers. Evaluating the latter comment, Macdonald and Macdonald (2010) denoted that Amazon basically receives high percentages of profits from the international customers, therefore, inference can be drawn that more that the American customers, the customers in the other markets like Europe, India and China prefers the e-commerce concept. Hence forth, Amazon has a huge business on the international business, which would facilitate the management to increase its brand stability.

Social

In the opinion of Michaelson (2010), perception can be drawn that the numbers of lawsuits against Amazon might influence the negative public perceptions regarding its service quality to enhance the sales volume.  In the similar subject, PolatoÄŸlu (2013) passed on the comment that Amazon had faced the major issue when the management had been accused of practicing the unethical action like violating the agreement with the suppliers. This has basically enhanced the dilemma within the customer regarding purchasing the product through the online transaction option. Against the latter statement, Sandberg and Holmlund (2015) mentioned that the specific issue had been the primary hindrances faced by any of the retails. However, Amazon had already improved the customers’ perceptions by implementing the policy, confidentiality strategies and introducing the open interactive mediums. Furthermore, Sagar et al. (2007) asserted that the language barriers and the cultural beliefs had negatively by affected the financial statement of Amazon.

Technologies

As per the researches conducted by the previous scholars, inference can be drawn that the technological forces like advanced technology and skilled developers’ expertise affects the economic margin of the brand. In the statement of Salehi et al. (2012), perception can be drawn that due to the customer traffic and larger transaction volumes the brand needs to be sensitive towards its technical failures. According to Rossouw (2011), Amazon majorly experience the technical issues, due to which the last year at least 40% of the international customers failed to register the personal details in the Amazon portals and order the selected items from the website. Despite of the discrepancies, the brand had managed to experience a high margin of sales.

Legal

According to PrzychodzeÅ„ and PrzychodzeÅ„ (2014), the online trading business within the UK, come under the e-commerce regulation influence. The UK government had imposed the Electronics Commerce Directive Regulations in the year 2000. The specific approach had been introduced by the brand to harmonise the online business rules throughout. The particular regulation had prevented Amazon from wide spreading its business into various other channels. Russell (2014) determined that China had passed legal regulation in 2004, where helps the online marketers to regulate the security of the electronic transactions.  The particular norms had facilitated Amazon to create its own website by targeting the Chinese market.

Environmental

It has been inferred that Amazon basically relies on the soft marketing policy, thus, its operational actions hardly adverse the ecological balance. Sandberg and Holmlund (2015) mentioned that it majorly display the products in its own portals and the intermediaries, thus, the limited amount of environmental deflation occurs with its software development programs, where high end energy consumptions are required for the software formation.

Threat of new entrants

In the majority of the industries within which Amazon operates incurs lower entry barriers. Apart from the modest capital requirements, the e-commerce industry does not demand for any specific permits or skills while penetrating into the market. Thus, the entry barriers in the correct sector are considerably lesser. Evaluating the above assertion, Rossouw (2011) mentioned that the brands operating in soft marketing industry would be threatened by the new competitors due to limited establishment efforts.  However, Eizmendi (2008) denoted that Amazon’s strategy of offering free shipping on the price range of $25 cannot be imitated by the other rivals. Thus, the brand had already developed sustainable strategies against the upcoming discrepancies as the recovery tools.

Buyer power

According to Rossouw (2011), Amazon’s business model involves the distinct groups of buyers that have the moderate power. The largest customer bases of Amazon are the traditional end prospects of Amazon mechanise.  Sandberg and Holmlund (2015) specified that serving the end customers of the automotive department, Amazon provides a tough competition to both the brick and mortar industries. However, purchasing the similar product segment from Amazon eliminates the bargaining power of the purchasers, which a customer’s gets from other abandoned shops and sites.

Supplier power

According to Eizmendi (2008), Amazon has maintained a strong relationships with its suppliers, thus, it could be inferred that the suppliers are widely eagered to distribute the product lines of Amazon to different retailers. On the other hand, Sagar et al. (2007) determined that the logistics department of Amazon is quite strong, due to which the brand enables to ship the product to the final customers with the tenure of one day.  Thus, according to Sandberg and Holmlund (2015), the suppliers are hardly interested to bargain to bargain with Amazon’s meaningful price range.

Threats of substitutes

Amazon’s customers have other retailing options, yet, the major segment prefers to purchase the product lines from Amazon due to its free shipping in the domestic region and the faster delivery options. Rossouw (2011) mentioned that the brick and mortar stores are threatened from the ranges of speciality boutiques to the larger specialty stores like Best Buy for the electronics segment and Sam Goody for the DVDs segment. Additionally, the other products offered in the Amazon’s portals are directly available from the manufacturers.

Rivalry

Eizmendi (2008) notified that some of the customers prefer to stick to the other related brands like Snapdeal and Flipkart for its free shipping options. Henceforth, the in case the competitors impose the unique options, might impose huge threats on Amazon’s current operations. Moreover, Sandberg and Holmlund (2015) stated that Amazon simultaneously competes with the smaller regional retail stores and the national giants. Therefore, Walmart had been emerging as its viable competitor, where the products available in the WalMart.com easily surpass the revenue margin of the Amazon. Within the short tenure, the brand might get threatened to lose its potential prospects to the competitors.

Distinguishing the Basic and unique resources

According to Rossouw (2011), the suppliers are the major assets of the brand, apart from this, the marketing unit was given high preferences for the unique promotional aspects. Moreover, Eizmendi (2008) mentioned that the basic products like books, digital goods, TV shows and the electronics services. On the other hand, the effective employee training and development systems are the efforts taken by the brand to enhance the expertise of its basic resources.  The AWS Config records had been its unique resources (Sandberg and Holmlund, 2015).  The brand has developed the cloud based software to store its internal data. 

Online retail

According to Eizmendi (2008), Amazon’s online retail business involves the products that sold by the traditional retailers and the low cost retailers. The brand had started as the online retailers in the and rapidly expanding its segment into music, movies and the electronics households. However, Rossouw (2011) inferred that Amazon does not stock all the products, which are sold on the website.

Internet services

Sandberg and Holmlund (2015) mentioned that Amazon’s internet services cannot be evaluated as per the standalone business line, as it intertwines deeply with both the retail and the Kindle ecosystem. Considering the customers’ perspectives the brand had introduced the services like Amazon Prime to provide two days free shipping on the retail purchases.

Kindle ecosystem

It has been inferred that Amazon had also increased its business into the production and manufacturing the family of Kindle tablets. Rossouw (2011) stated that designing the electronic book reader, Amazon Kindle had partly converted its business into the media and functional tablet device.

Identifying the Key Market Segments

The current statistics forecast that Amazon widely target on the e-book reader. The reader of all age groups are highly appreciating the Amazon Kindle note pad and the content mentioned within it. Sandberg and Holmlund (2015) suggested that apart from this, Amazon deals with the majority of the product line, yet, the majority of the customers prefer the brand due to its high end stocks in the electronics departments.

Cost leadership

Amazon increases the profit range by reduce the price range in its basic items (Rossouw, 2011).  The management had increased the market share through charging the lower price ranges in the book products.

Differentiation

The one day shipping option had been the major differentiation policy of Amazon (Sandberg and Holmlund, 2015). The marketing measures are also different from the competitors, thus, the customers get easily satisfied with the service and product ranges.

Cost focus

The price ranges of Amazon’s products fluctuate on the per minute basis.

Differentiation focus

The brand basically tends to transfer its retails domain to the manufacturing segment, through its individual products.

Market penetration

Amazon’s market penetration programs emphasises more existing products with its target market. Prior penetrating in the new market, the management gets accustomed with the regional currency, based on which the price ranges are formulated.

New product development

Unlike other firms, Amazon does not emphasis on enhancing its business collaborations with the other firms, rather it relies more on the concept of developing the individual products. Thus, it is channelizing the business focus on the e-book reader devices.

New market development

Amazon Kindle had been the new concept introduce by the brand in the domestic as well as the international market. Thus, penetrating into the gadget segment with the e-book reader devices had been the new market development for Amazon.

Diversification

Initially, Amazon had emphasised on the basic retail products. After attaining the success in the specific domain n, the brand had diversified its focus on the book products (Sandberg and Holmlund, 2015). Adequate information on the specific segment had facilitated the brand to produce the Kindle reader devices.

Suitability

Dealing in the electronics segment had been the major suitability of the Brand.

It individual product Amazon Kindle had received a wide acceptability in the market.

Converting the business model into the manufacturing domain might be a feasible option for Amazon. Since, customers had provided a positive response regarding its individual products and manufacturing options.

Conclusion and recommendations

The current study evaluates on the business models and practices done by Amazon to enhance its business sustainability ion the target market. While evaluating the study, the inference can be drawn that Amazon needs to be persistent in its marketing operation and innovation to maintain its growing revenue margin.

Recommendation

Persistent innovation

Since, the majority of the competitors are penetrating in the e-commerce market, therefore, the needs and the preferences of the customers’ changes with time, which might lead the brand to experience a slaughter. The major disadvantage of Amazon had been its shipping charges; however the customers always look for the fee delivery options. Thus, might lead the brand to withstand stagnancy.

References:

Branco, M. C. and Delgado, C. (2012). ‘Business, social responsibility, and corruption’, Journal of Public Affairs, 12(4), pp.357–365.

Bremer, J. A. (2008). ‘How global is the global compact?’ Business Ethics: A European Review, 17(3), pp.227–244.

Carroll, B. A. and Shabana, K. M. (2009). ‘The Business Case for Corporate Social Responsibility: A Review of Concepts, Research and Practice’, International Journal of Management Reviews, pp.1468-2370.

Chan, K. C., Fung, H.-G. and Yau, J. (2009). ‘Business ethics research: A global perspective’, Journal of Business Ethics, 95(1), pp.39–53.

Crane, A., McWilliams, A. and Matten, D. (2009) The Oxford handbook of corporate social responsibility (Oxford handbooks in business and man..Oxford: Oxford Univ Pr, Cary, North Carolina, U.S.A.

Crowther, D. and Reis, C. (2011). ‘Social responsibility or social business?’ Social Business, 1(2), pp.129–148.

Eizmendi, G. (2008). ‘Ageing economy: From social responsibility to new business opportunities’, Gerontechnology, 7(2), pp.124-130.

Fontaine, M. (2013). ‘Corporate Social Responsibility and Sustainability: The New Bottom Line?’ International Journal of Business and Social Science, 4(4), pp.111-113.

Gupta, S. (2010). ‘Multiculturalism and ethics’, Electronic Journal of Business Ethics and Organisation Studies, 15 (1), pp.110-120.

Hawrysz, L. and Foltys, J. (2015). ‘Environmental aspects of social responsibility of public sector organizations’, Sustainability, 8(1), pp.19-21.

Macdonald, K. and Macdonald, T. (2010). ‘The liberal battlefields of global business regulation’, Ethics & Global Politics, 3(4).

Mallin, C.A. (2012) Corporate governance. Christine A. Mallin. 4th edn. Oxford: Oxford University Press.

Michaelson, C. (2010). ‘Revisiting the global business ethics question’, Business Ethics Quarterly, 20(02), pp.237–251.

PolatoÄŸlu, H. (2013). ‘Why does social business matter?’ The ETÄ° group and social responsibility’, Social Business, 3(4), pp.279–284.

PrzychodzeÅ„, W. and PrzychodzeÅ„, J. (2014). ‘Corporate social responsibility for sustainability,’ Management and Business Administration Central Europe, 22(2), pp.80–97.

Rossouw, G. J. (2011). ‘A global comparative analysis of the global survey of business ethics’, Journal of Business Ethics, 104(11), pp.135-167.

Russell, D. (2014). Corporate sustainability: Accounting standards vs tax by design. Social Responsibility Journal, 10(3), 386–398.

Sagar, D., Mead, L. and Bampton, K. (2007) Kaplan CIMA learning system fundamentals of ethics, corporate governance and business law. United Kingdom: Kaplan Publishing.

Salehi, M., Saeidinia, M. and Aghaei, M. (2012). ‘Business ethics’, International Journal of Scientific and Research Publications, 2(1), pp.4-5.

Sandberg, M. and Holmlund, M. (2015). ‘Impression management tactics in sustainability reporting’, Social Responsibility Journal, 11(4), pp.677–689.