Amazon is the multinational American company that is into e-commerce, digital streaming, and cloud computing, artificial intelligence. It comes among one of the renowned companies of the world. Jeff Bozos established it with the motive to provide the best quality consumer goods to the people through effective delivery services and later on expanding the business into digital streaming The Company is considered one of the most profitable companies in the world. The popularity of the business grew when it started its own digital streaming platform that led to 100 Million subscribers. The company‘s success is attributed to its effective strategies related to marketing and production and also to the effective business canvas model that helps in the achievement of the goals. The business model of the Amazon is quite simple but effective as it was capable of covering the large market segment in the best possible manner. Moreover, the business model was the prime reason behind the profitability of the business in the end. The following repost will be discussing about the Amazon business model and its relevant literatures associated with the company.
Amazon is one of the biggest and profitable online retailer stores that serve the needs of the target segment in the effective model. According to Lewis, the business model of the company has made it one of the largest online stores in the world (. Lewis, 2018). The company operates to serve various target markers due to its diversified services so that the right satisfaction of the consumers could be achieved. According to Thoms, the effective delivery of the products at the doorsteps of the consumers is helpful in achieving the goals of the company (. Thoms, 2008). One of the important things about the Amazon business model is that its sells products directly to the consumers. The direct selling of Amazon means that it sells good percentage of the products through online storefront that has a small mark up. It has a large warehouse where the goods or products are kept for directs sales. According to Boudreaux & Klein , Amazon consumers visit the Amazon stores by considering the goods to be less expensive for purchase and purchase it readily (.Boudreaux & Klein, 2019). Directs sales options have increased the consumer base for purchasing the products. Besides, providing the privilege for direct sales, Amazon also provides the platform for the good retailers to sell their products through their websites. Moreover, the products that are sold to by the retailers are usually uncommon products or those products that are of high purchase prices. According to Afsar & Masood, Amazon giving platform to retailers for high priced or uncommon products is to avoid any kind of competition (Afsar & Masood, 2018). It also avoids the slow-moving inventory thus resulting in better achievement of the sales. Although it does not allow the retailer to post their products free but it also charges some percentage of commission of sales from them.
The company also known for its subscription-based models through services provided by Amazon prime. In the subscription based business model of Amazon like prime, the viewers are charged the amount yearly for viewing the services.. According to Amanchukwu, the subscription based services are the greater source of profitability for the business (Amanchukwu, 2015). The other business model that is used by the company is three customer value proposition model. According to Anastasia, three customer value propositions model is helpful in taking care of the needs of the customers that makes the company one of the profitable companies. (Anastasia, 2015).
(Afsar & Masood, 2018)
The company focuses on providing the high quality and lower prices driven experiences to the consumers. It has taken care of the consumers in the most effective manner. Some of the key positions for the consumers it provides are fast delivery speed, low prices, and vast selection. According to George, these value positions are highly helpful in achieving the highest consumer satisfaction (George,, 2015). According to Pratiwi, l Jihan, & Niswaty, fast delivery is one of the highest wanted propositions to the consumer. The Amazon ensures the fastest delivery of its products at the doorsteps of consumers thus helping them to improve their satisfaction level in the long run (Pratiwi, l Jihan, & Niswaty, 2019). The other important proposition that is provided is he low priced good of highly quality. According to Lewis, every person wants .getting high quality of good at low prices as it improves their satisfaction level (. Lewis, 2018). The direct sales and other features of retailing helps in the low priced products being sold at Amazon. It has made the company sales increased to great heights thus leading to high profitability. The third important consumer proposition is the vast selection as it offers vast variety of products to the target segment thus helping them satisfy their need and wants in the best possible manner. The vast selection makes the consumer to shop all types of products according to their needs or desires from one website (Afsar & Masood, 2018).
Beside these propositions, the Amazon also provides other benefits to the consumers that include audio books for reading, movies and games to play with, and kindle for E-readers. These types of services provide by the Amazon to its target consumers helps in the achievement of the greater consumer’s satisfaction. The company also allows the consumers to achieve the goals in the best manner. The company also provides the feature of online payments through credit and debit card. In case, an individual is not comfortable with the online payment, it also offers cash on delivery services to the segment so that the products can be sold in the area where the digitalization has not reached. It also makes the return of several products easier so that the better quality of products. The return also helped in the achievement of various goals can be achieved (Anastasia, 2015).
The business model used by the Amazon Company is quite effective in attracting the larger segment of the people thus leading to better achievement of the results. The Amazon Company always suggest the users that it uses the right tactic of offering products to consumers at low price but it is always the case. Sometimes, the business model only reflects that the products that are offered are actually of low price but in reality, the high prices are charged (Pratiwi, l Jihan, & Niswaty, 2019). The realization of the consumers about highly priced products could affect the goodwill of the company.
(Amanchukwu, 2015)
The above is the business canvas model of Amazon that reflects various elements and how they work in collaborative manner to achieve the smooth sailing business operations of the company in the reality business. The business model is divided into key partners, key activities, cost structure, value proposition, customer relationships, Key resources, customer segments, and revenue sources.
Some of the key partners of the Amazon business includes –
These partners are helpful in achieving the good goals of managing the channels and other important parts that include delivery of products, management of warehouses and inventories thus helping in the easy facilitation of the objects (. Thoms, 2008).
Affiliates-
It has also collaborated with various affiliates that are helpful in effective promotions of its products and other services.
Authors and publishers-
Amazon provides the publishing services to the people so it collaborated with various authors and publishers so that they can help them in their business.
Sellers-
It has collaborated with key companies that provide the selling services to the people thus resulting in better achievement of the goals (Australian and terriority and government , 2019).
Merchandising-
Amazon is the biggest platform for merchandising its products and services to the target segment. It is the best platform where the promotion of the products and sales are taken place in the best possible manner. it is the platform where the best deals are taken place.
Platform design and optimization –
The other activity that results in the increased traffic on the Amazon Website is the innovative designs of the platform and attracts the attention of the people. it had also affected activities related to ales and marketing in the best manner (.Boudreaux & Klein, 2019).
Price-
The prices play a significant role in attracting consumers to the websites and making them purchase the products effectively. It also ensure to achieve the right goals in the best possible manner.
Convenience –
The convenience products are sold by the Amazon websites that make it possible the achievement of the goals in the best manner possible. it also creates the convenience of fast delivery and providing the high quality of products.
Selection –
It selects the products in the exquisite manner so that the consumers do not have to spend major pert of time in selecting high quality and effective products.
Fast fulfillment-
It helps in satisfying the needs of the customers in the best possible manner by tackling the situation of the emergency in the best possible manner (Anastasia, 2015).
Automated self service-
The Amazon provides the fast and effective automated services to the target segment as it leads to better achievement of the goals, as consumers are able to decide for themselves that which features suits them in the best manner (Pratiwi, l Jihan, & Niswaty, 2019). These services make them achieve the goals in the right manner.
Warehouses and automation-
Amazon has the extensive network of the warehouses that helps in the storage of the large amount and variety of goods in the best manner possible to avoid any kind of displacements of the goods and materials.
Human resource management-
The company boasts of the right management practices to manage humans effectively in best possible manner so that right motivation of people can be achieved to work in the most effective manner.
Culture –
The culture of the company is also very positive and open where the individuals are able to get the things done in the most effective manner (Anastasia, 2015).
Affiliates-
Affiliates are helpful for the Amazon Company to promote their products to the target segment in the best possible manner.
Websites-
It is the best digital tool that is helpful in marketing the product to the target segment in best possible manner thus leading to the achievement of the goals.
Cost driven structure –
Amazon focuses on maintaining the cost by trying to lower down its cost of production in the best possible manner.
Economies of scale-
The company focuses on bringing the economies of scale by achieving the lower cost of production in the best manner (.Boudreaux & Klein, 2019).
Commission –
The company obtains its commission on selling various goods and services in the best manner so that the right goals can be achieved.
Sales margin –
It also focuses on obtaining the good sales margin for achieving the right goals in the best possible manner (George,, 2015).
Conclusion
Amazon had the best way of achieving the goals of the organization by using the best strategy for business model. It had always tried to deliver the best quality of products with vast collection at affordable prices so that the consumers get attracted towards the products in the best manner. Some of the strategies used by the company are value position to provide the values to the people. It has ensured the concept of direct sales in the organization so that the cost of production of the company could be lowered down to certain level. It had also tried to use the strategy the business canvas model effectively to define its every area if work in the most effective manner thus giving it the clarity of its objectives and visions in the long run. Besides these, the company has also focused on facilitating the subscription-based model where the people were able to obtain the subscription annually for the digital streaming services. It had also tried to collaborate with beneficial people and institutions that include publishers, and technological assistance to help in the further ways of doing things in the right manner.
Lewis, P. V. (2018). Ethical principles for decision makers. Journal of Businss Ethics , 271-78.
Thoms, J. C. (2008). Ethical Integrity in Leadership and Organizational Moral Culture. Sage Journals , 250-55.
Boudreaux, C. J., & Klein, P. (2019). Socio-cognitive traits and entrepreneurship: The moderating role of economic institutions. Journal of business venturing , 178-196.
Afsar, B., & Masood, M. (2018). Transformational leadership, creative self-efficacy, trust in supervisor, uncertainty avoidance, and innovative work behavior of nurses. The Journal of Applied Behavioral Science , 36-61.
Amanchukwu, R. S. (2015). A review of leadership theories, principles and styles and their relevance to educational management. Management , 5 (1), .6-14.
Anastasia. (2015, March 1). Major Approaches & Models of Change Management. Retrieved July 12, 2019, from cleverism: https://www.cleverism.com/major-approaches-models-of-change-management/
Australian and terriority and government . (2019, October 1). Traning govt. Retrieved October 8, 2019, from training : https://training.gov.au/Organisation/Details/90198
L. (2015). Linguistic and Philosophical Investigations 14. Employee motivation and job performance., 97-102.
Pratiwi, l Jihan, N., & Niswaty, R. (2019). The Influence of Work Facilities on Employee Performance at the Regional Financial Management Agency Secretariat Section of South Sulawesi Province. Jurnal Ad’ministrare 6 , 35-44.
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