The journey of Amazon is a kind of single-minded focus that help Jeff Bezos to consolidate the business. The market cap of the company is over $260 billion (Amazon.com 2018). This is the most valuable retailer in the world and they have started their business with books (Klaus 2013). Now the company has the worldwide reputation and they have changed their entire lifestyle of the people.
The company initially choose the name as Amazon is the world’ largest river and it has the specialties like exotic and different. The company started in 1994 and it has the revenue generation of US$ 177.85 billion in 2017 and the equity is around US$ 27. 700 billion in 2017, all these are quite high for Amazon as well (www.amazon.com 2018). The retail online website mechanism and formulated this as the suitable form is the key deliverance that company provide to their customers.
The company launched an online bookselling site and delivered a chain of the bookstore for their customers at the initial time. In 1995, the company started their journey as ‘Earth’s Biggest Bookstore’ and they distributed books (Pinch 2012). The company went public in 1997 and market capitalization was approximately $430 million (Amazon.com 2018). The market value of the company increases so as the product advancement. The process of everything store is under process for Amazon and they have tried to accumulate all those material that a human needs.
Though this is a tough process that people can find everything in their portal the process has started the allocation of groceries and all is the major aspect in that case (Amazon.com 2018). In 1999, the online supermarket has started and Amazon rolls back the thing for the development of their business. Amazon Prime membership is the major aspect in that case and customers will get extra benefit for that reason (Youtube.com 2016). In 1998, the company expand their business into CD and DVDs. After that, they include toys and electronics in 1999 (Amazon.com 2018).
The company introduced the new logo and have the third party seller business in 2000. In 2002, the company launched Web services and cloud platform process and in 2003 they have expanded their business in jewellery. In 2004 they started to sell shoes and in 2005 the membership packages of Amazon prime has started. In 2006, the fresh food delivery business of Amazon has started and it launched in Seattle. E-reader and games launched in 2007 and 2008 respectively (Youtube.com 2016). In 2010 the company launched original television content.
In 2011 and 2012 they introduced Kindle fire and Acquires Kiva respectively. The drone delivery process has started in 2013 with the name of ‘Prime Air’. The voice-activated information launched in 2014 and in 2017 Amazon acquire whole food market and increase their revenue amount for $13.4 billion (Youtube.com 2016).
2. Aspects of Amazon’s operations management on the increased globalization of world trade
The management process of Amazon is quite interesting and it has a quality statement that channelizes the operation process in case of decision-making areas. There are some operational changes that Amazon has made in this recent years and this is the reason they are improving their work culture and operational process for the development of the business.
The good and service design changes are the key concern that strengthen strategic decision-making areas are based on the technology. Such technological support is important for the company. As opined by Crane and Matten (2016), the advancement of e-commerce management is the key understanding that helps people to have what they demand from the online process. On the contrary Peng (2016), stated that online processes are not always convenient for the wholesalers even for the customers, Amazon change the perception in that case. The convenient target customers are there and they also habituated with this technology.
Quality management is another process that penetrates the decision-making areas and Amazon’s operational management has the power structure to evaluate this in the proper manner. Organizational culture is very innovative for Amazon and that encourage employees as well as customers to get involved with the process and to create new ideas for the company.
Location strategy is a kind of place emphasizing the Amazon has done and the impact of CSR is also important in that case. The location of the warehouse and the distance of stores, in that case, is important and that also showcases their largest possible number of customers through their business (Laudon and Laudon 2015).
Job design for posts and the human resource process is also important in that matter. As mentioned by Caganova et al. (2012), employees are dealing with the innovative process and the process of hiring is also important in that case. The company’s sustainability is another major concern in that case and growth in business and resource management is another streamline process that helps for the progressive nature of the business.
The maintenance is also important in that case as the technological asset maintenance is the key administrative process that Amazon has started long back and those strategic implications help the company to make some efficient decision at the crucial time. As opined by Ungson and Wong (2014), the advancement of technology also helps in operational process and regular direction in business helps the initial process to maintain this.
3. Amazon’s journey of e-commerce replaces the in-person shopping experience
E-commerce businesses are growing faster and it provides an opportunity for the brick-and-mortar businesses to provide a different value proposition to the customers. Amazon is an e-commerce giant and it aligns the business with the needs, expectations and wants of the customers. Buying online from the e-commerce always provides control to the customers over the payment and the customers can observe large numbers of similar products coming with same price brackets. Consumer psychologist Mr Philip Graves opined that consumers try to purchase branded and quality items online as they can predict the longevity of the products. When the customers visit the in-person stores, the customers have to give different level of effort with money and effort both must be required.
As declared by Turban et al. (2017), the customers can visit the online stores from their electronic devices as it requires low effort. The customers choose e-commerce sites because the customers expect transparency, right choice, high inventory levels and ability to compare prices. On the contrary Chaffey (2015), argues that electronic device is not all are technologically correct in all the places so the identification is very important in that case.
In e-commerce sites, the customers can view the reviews of the customers and the customers can notice the promotional offers. In-person shopping experience provides the advantage of the customer to interact with the salesperson face-to-face and the customers can experience brand at the time of in-store shopping and the process of Amazon Go make more sense in customer dealing (Youtube.com 2016).
The customers can have the brand experience while visiting the stores as the customers can see the technology, communicate with the staffs and ambience of the stores. In-person shopping helps to motivate the customers to create larger purchase when the staffs can demonstrate the potential add-ons on the purchase (Youtube.com 2017). Sometimes, the customers do not find the exclusive products which are just launched in the physical stores. Physical stores have limited space and all the items may not be available in the stores and it may reflect poorly on the brand image of the stores (Cavallo 2017).
Amazon plays the role of a medium where the sellers and buyers both meet each other. Smaller sellers can sell their products through Amazon and Amazon gives the platform to sell the items to the customers. Amazon sells the products through smaller sellers and manufacturers by linking them with the customers. Therefore, the customers can have all types of products with abundant numbers of availability (Youtube.com 2016).
Amazon launches new products by doing flagship projects with the large and small brands. Amazon has started the ‘Prime membership’ where the customers can get the same day delivery (Amazon.com 2018). Online purchasing through Amazon is flexible as the customers can get the EMI facility from banks and the customers do not have any pressure as they check the products as long they needed (Chow et al. 2017). However, e-commerce may not reach the remote places from where e-commerce Company does not have any delivery networks.
Amazon online sale channels provide exciting opportunities to have the products on right time and Amazon gives hassle-free returns. As published in the article by Fang et al. (2016), 42% of the online buyers return their products because of low quality and products do not match shown in the images. Therefore, supply chain, the technology of website and app, operation management; network and distribution need to gear up before e-commerce replaces the in-person shopping experience.
4. Real long-term implications of the increased presence of Amazon to the Australian Retail Industry
Australia is heading towards to make a strong e-commerce and it achieved AU$ 32 billion in the year 2017 (Sutton-Bardy et al. 2017). The annual growth rate of e-commerce is 13% and e-commerce in Australia has come up with dominate shopping experience which can overshadow the mainstream retail. The growth of online sale in Australia has been observed in both B2B and B2C businesses. Two global e-commerce giants Amazon and Alibaba have taken the market and these e-commerce companies have a serious posed threat to the retail operators like Myer, Coles and Woolworths. In Australia, Myer has experienced declining of stock and sales.
Amazon has brought up the disruptions to the logistics as Amazon’s logistics vendors are playing a very important part in increasing the demands of the e-commerce. Industries which are associated with the e-commerce in Australia are rising, like industrial real estate, packaging, warehousing and online advertising. According to Sohaib and Kang (2014), e-commerce companies have brought digital disruption and e-commerce companies also altered the consumer-business relationship.
Consumers of Australia have no control over when, how and where they purchase the products. In addition, small companies can sell their products through Amazon and the buyers also consider new products for purchasing and the power of purchasing has shifted towards buyers again. Bargaining power of consumers makes alarm the vendors to provide more service, better delivery, convenient shopping and boost the competitiveness in the market (Youtube.com 2017). The report published by ABS, it is to note that 85% of Australians aged above 18 access to internet and Smartphone (Gregory et al. 2017). It is quite obvious that the people will access website and apps of Amazon.
In Australia, the customers’ shopping preferences have been changed and consumers are used to shopping through online as it saves time, the products are delivered in doorstep and the companies are trustworthy. The local shops and retail stores are in utter danger as the pricing of the e-commerce is lower than they offer to the customers. As stated by Scarborough (2016), Australians mainly buy appliances, home ware, recreational and personal items, fashion and electronic products. In addition, Australians also buy computers, accessories, meals, books and event tickets from e-commerce sites.
Australians spend the most time in the variety and departmental stores and it is 30% of their online shopping. Amazon dominates the American market and Amazon has come with unmatched product selection in Australia. Amazon is gradually increasing the Prime service and Amazon is planning to start the retail offering stores named Marketplace. Amazon’s arrival in Australia opens up for the sellers for the wider audiences for the additional revenue. Amazon has the USP to deliver the products within three-hours and it is difficult in Australia as it has the sparse population and vast geography (Daniel et al. 2015). Amazon provides drone services in America and it is not lucrative for Australia as it has large rural areas (Youtube.com 2017).
Amazon has set its distribution center near Melbourne, Sydney and other large cities. The well-established delivery network will enable Amazon to reach large numbers of customers which will pose a competitive threat to the retail stores. Retails, JB Hi-Fi and Harvey Norman face a hard time competing against Amazon at this time and retail stores will be stagnant while losing against the innovative concept of Amazon.
References
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Cavallo, A., 2017. Are online and offline prices similar? evidence from large multi-channel retailers. American Economic Review, 107(1), pp.283-303.
Chaffey, D., 2015. Digital business and e-commerce management. Sydney: Pearson Education Limited.
Chow, M.Y.K., Danchin, M., Willaby, H.W., Pemberton, S. and Leask, J., 2017. Parental attitudes, beliefs, behaviours and concerns towards childhood vaccinations in Australia: a national online survey. Australian family physician, 46(3), p.145.
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