Amazon Inc is a multinational company that mainly belongs in the E-commerce industry. The company is headquartered in Seattle in the United States of America. Since the company belongs in the ecommerce industry, its main focus has always been in the online retail market. This evidently lays emphasis on the fact that the company strives to maintain its position at the top as the most valuable retailer in the United States of America. In order to maintain its position at the top, the company ensures that it caters to its society and community diligently (Qin and Liu 2022). This mainly lays emphasis on the fact that Amazon as a company ensures that it maintains its corporate social responsibility so that it can function ethically in its designated industry. The following paper essentially strives to shed light on the way the company conducts lean manufacturing and the strategic changes it can implement in its practices. In addition to this, the paper also presents a SWOT analysis of the company along with the Porter’s Five Forces that help in understanding the competitive environment of the company.
In regards to the porters five forces framework, the company has an extremely competitive environment.
In regards to Amazon, the threat of new entrant is low. This evidently suggests that since Amazon is a multinational company it means that the company has a massive group of investors backing it up. This also means that the company deals on a much larger scale when it comes to distributing its product (Alshmrani 2021). This is why new companies who enter the retail industry are highly unlikely to compete with Amazon as it is at the top of the E-commerce market. In addition to this it is also imperative to note that Amazon has created for itself a brand name. This mainly suggests that the company has successfully earned the loyalty of its customers which makes it very unlikely for new entrants in the market to compete with the company.
In regards to Amazon, the bargaining power of buyers is extremely high. This is because the company is primarily customer centric. The company conducts its business through selling a wide range of products to its customers. Therefore, in order to be at the top of its designated industry the company must ensure that it is keeping its customer base happy. This is why the bargaining power of buyers is extremely high for the company (Onyusheva and Seenalasataporn 2018).
In regards to the company the threat of substitute is extremely high this is because Amazon is an E-commerce market place that sells its products on an online website. This makes it extremely easy for other companies to not only copy its products but also sell them for a lower price. This lays evidence to the fact that Amazon as a company faces an extremely high threat of substitution (Omsa et al 2017).
This evidently focuses on the power that suppliers possess in the E-commerce industry. It is not unlikely for the suppliers to have a certain amount of power since it supplies resources to the retail market in order to make sale. However, since Amazon is at the top of the E-commerce industry, the suppliers have very little power for bargaining. This is because Amazon is ruling its designated market which makes suppliers want to constantly work with them. Therefore, it can be said that the bargaining power of suppliers is low when it comes to Amazon.
Since the E-commerce industry is constantly expanding, many new companies enter the market. This makes the level of competitive rivalry extremely high. While companies like Amazon are hard to compete with, it is not unlikely for existing companies such as Walmart and Target to compete with the company and set an extremely high bar for competition (Islami et al 2020).
In regards to Amazon, the company’s strength factors rely on its product focus, brand recognition and cost differentiation. This has enabled the company to flourish in its designated industry as it has created a reputation for itself that has helped it earn the loyalty of its customers (Baboolal-Frank 2021).
In regards to Amazon, the weakness factors include the company’s distributed focus. This evidently lays emphasis on the fact that the company sells a variety of different products on its website that differ from its authentic eBook and IT assistance Alexa range. This distributed focus acts as a weakness as the company is unable to focus on the full and complete development of any one of its products.
In terms of Amazon, the company faces opportunities such as expanding its range of products both on its own catalogue as well as on the variety of different brands that it offers. This mainly lays emphasis on the fact that since the company has created a reputation for itself and is also at the top of its designated industry, the company has positioned itself to expand its product line so that it can cater to the upcoming needs and demands of its customer base (Cheng et al 2021).
This essentially sheds light upon the fact that the company evidently faces threats from hackers. This refers to the fact that since the company conducts its business online, clients often choose to pay online. However, this system and practice is threatened when hackers attempt to steal personal data of every client that shops from the website (Watanabe et al 2021). This causes the company to lose its customers as it faces the threat of being unable to protect their personal data.
Since the company is a leading organisation in its designated industry, it is imperative that it follows through the rules of corporate social responsibility. This primarily lays reference to the fact that the company has responsibility towards the community and the society that it functions in. In regards to Amazon, the company is committed to supporting local communities. This illuminates the fact that the company strives to support independent delivery service partners during the trying times of the pandemic. The company, in light of the recent pandemic has chosen to contribute heavily to independent delivery services so as to eradicate some of the negative impacts that the pandemic has had on small businesses. In addition to this, the company also donates electronic devices and gift cards to public schools. This is because even though Amazon is an E-commerce company that sells a variety of different products, its own products include technical gadgets such as the Alexa series, the echo dot etc. This is why the company contributes to its community by donating electronic devices to public schools. Moreover, the company also conducts a programme which supports women who are interested in IT services such as coding. The company also contributes heavily to local and national non-profit organisations in order to bring about a change in the world. Furthermore, it is also imperative to note that in light of the recent coronavirus pandemic in the year 2020, the company endeavoured to allow all its global employees to work remotely from the safety of their homes so as to curb the spreading of the disease as well as maintain the safety and protection of their workforce (Correll et al 2016). Finally, it is also essential to note that Amazon as a company fully supports gender equality and fair treatment of minorities. The company has announced an affinity group known as the employee resource group which takes care of gender equality and fair treatment of minorities within the organisation. The company also launched a business project that supported women in the supply chain business and eventually enabled them to flourish in their chosen industry. In regards to helping the environment, the company also ensures that it does not use energy liberally. This means that the company takes care of its energy consumption and strives to use wind and solar energy in order to conduct all its business operations. The company has also been working on reducing its waste production and eventually recycling it. The company also focuses on its water consumption and also plans on recycling water to power itself. It is imperative to note that the company has committed to minimising its carbon footprint by coming up with new technologies that would enable them to deliver the products to their customer base without having to expense too much carbon into the environment. Therefore, it can be said that in terms of corporate social responsibility the company takes its responsibility and position within its industry very seriously and strives to do better every year.
Lean manufacturing essentially refers to the idea that the productivity of an organisation is maximised while minimalizing the total waste produced. This mainly lays emphasis on the fact that lean manufacturing refers to a production process which enhances the productivity of an organisation while simultaneously decreasing their waste production (Naeemah and Wong 2022). In lean manufacturing, the lean principle refers to waste as something that does not add value since it cannot be sold to the customers. Therefore, an organisation that follows lead manufacturing must make sure of the fact that they are maximising their production while decreasing their waist count which cannot be sold to the customers (Sergeeva et al 2022). In regards to Amazon, the company has been following Lean manufacturing since the very first day. This is because the CEO of the company Jeff Bezos focused on customers since the very first day. This means that the company created products that had very minimal waste as waste could not be sold to customers and was hence a waste of money as well as time. The company’s commitment to its customers enables it to follow a variety of different lean principles that enable it to reduce their waste production. In addition to this the company strongly believes in serving the customers to the best of their abilities. This is why Amazon as a brand and company strives to cut down its waste production by creating products that can be sourced sustainably. This sustainable seeking and sourcing of ingredients and materials enables the company to cut down its waste reduction by a lot since the materials are purchased from local vendors. It is also imperative to note that the company focuses on measuring, improving, controlling and analysing every part of their manufacturing process (Garrett et al 2021). This means that Amazon as a company takes care of the way it creates its products as well as the way it manufactures them to its customer base since the success of the company relies completely upon the hands of the customers. Amazon as a brand focuses on optimising the utilisation of resources this evidently lays reference to the fact that the company believes in completely utilising every resource that it seeks. This enables them to create a sound, rhythmic and stable production system which promises improvement in terms of performance every year.
In order to align its services as well as its practises with lean manufacturing, the company also focuses on educating its workforce. This evidently lays reference to the fact that the company also strives to educate its workforce about the eradication of waste production. This evidently helps the company to manufacture sustainably since the work force is motivated and driven to decrease their day to day waste production which eventually helps the company flourish in its purpose.
Furthermore, it is also imperative to note that since the company strives to educate its work force, it also successfully improves the transparency practised within the company. This is essential as it motivates the workforce of the company to enhance their performance. This means that Amazon as an employer, endeavours to educate its work force to enhance and improve their workplace environment. This motivates an encourages the employees to work diligently and enhance their overall productivity. This enables the company to be at the top of its designated industry. This also strengthens the bond between the company and their employees. Furthermore, a motivated and driven work force also means that the employees are less likely to make mistakes and hence contribute diligently to reducing their waste production. This helps the company reduce downtime that would have been otherwise used to resolve issues. This also helps Amazon as a brand to save costs and funds which they could use elsewhere such as in enhancing their product quality. Therefore, it can be said that through lean manufacturing the company not only takes care of its waste production but also increases its level of manufacturing. It is also essential to note that by educating its work force about this reduction, the company enables itself to be in an extremely lucrative position where they can save funds and use it to enhance the quality of their products and can also encourage their work force to enhance their performance and enable the company to reach the top of its designated industry among its fellow competitors.
In regards to Amazon, the company can implement a variety of different steps that can enhance its lean manufacturing approaches. This evidently lays emphasis on the fact that the company can integrate certain practises within its functioning so as to improve its lean manufacturing practises. One of the changes that the company can implement is by reducing unnecessary inventory. This lays emphasis on the fact that companies as big as Amazon have to take inventory of all its materials and ingredients. One of the easiest ways for the company to reduce its waste production is by minimising its inventory list. This would enable them to not only manage the ways that they produce products but would also help them in cutting back costs for unnecessary equipment and materials. In addition to this, the company can also work on shortening its production cycles. Since Amazon is a big company that deals with a variety of different products and serves a wide range of customers, it is not unlikely for the company to have an elongated production cycle (Sadq et al 2018). In order to strategically align their production with lean manufacturing, the company must work on shortening its production cycles. This means that Amazon as a company must utilise high end technology that not only speed up their production rate but also minimise the time of production. By conducting production in smaller batches, the company is more likely to create less waste as the production will be mindful and not fast paced. Another step that the company can implement within its functioning is to speed up its response time. This suggests that since Amazon has a variety of different orders to take care of on a daily basis, speeding up their response time in terms of taking orders enables the company to work efficiently as well as in a more stable environment. This contributes to lean manufacturing as the employees are able to make accurate predictions that align with the requirement of the market that the company is serving. This aligns with the company’s approach to shortening their production cycles which enables them to create less waste. Another step that the company can implement is to elaborate their employee autonomy. This lays reference to the fact that since the company is extremely vast and caters to a wide number of orders on a daily basis, it is more likely to be able to manufacture responsibly if it enables employee autonomy. This means that Amazon as a brand must give more employees authority to take decisions in different aspects of manufacturing. This not only helps the company divide its work but it also ensures that the production is conducted diligently without any mistakes which eventually reduces waste production. The company can also develop its lean manufacturing practises by making their suppliers their partners. This evidently illuminates the idea that Amazon being a vast company has a variety of different suppliers. By creating partnerships with these suppliers, the company enables itself to be in a position to work with suppliers who would also contribute to creating less waste. Therefore, Amazon will not only be able to practise lean manufacturing through its production but would also be able to practise it through getting supplies from suppliers who believe in reducing waste as well. This way Amazon as a brand can not only enhance its production but also bring about a lucrative change for both its suppliers as well as to serve its own purpose. This also helps the company strengthen its relationship with its suppliers. By cutting down waste production on both ends of the spectrum, Amazon positions itself to be at the top of the industry and hence contribute to the development of the society and community that it functions out of. The company can also ensure that the ingredients for the products are quality tested. This primarily brings to light the fact that as a brand, the company has a certain level of responsibility towards its targeted customer base. This means that the company as a service provider, must ensure that its products are top quality. In order to align this practice with its lean manufacturing strategies, the company must ensure that it ensures that all its products maintain their premium quality. This can be conducted by ensuring that the suppliers provide Amazon with quality ingredients. The company enables itself to practice lean manufacturing by not only having the suppliers check the quality of the ingredients they provide the company but also have the company itself inspect the quality. This double checking system, when conducted by different sections of the work force of the company enables the manufacturing process to be diligent and stable. This also enables the company to cut down upon its waste production by a lot (Pandiarajan 2022). In addition to this, this practice also enables the company to save its funds in terms of purchasing poor quality products. Thus, it can be said that Amazon as a brand practices lean manufacturing in a variety of different ways. However, through the implementation of these steps, the company is bound to bring about a drastic change in their product production rate as well as their waste management levels.
In regards to Amazon, the mission statement of the company is to “serve consumers through online and physical stores and focus on selection, price and convenience.” In regards to the vision statement of the company it aspires to be Earth’s most customer centric company, where customers can find and discover anything they might want to buy online and endeavours to offer its customers the lowest possible prices.” Both of these statements align perfectly with the company’s lean manufacturing practises. This is because the mission statement of the company is to serve its consumers through online and physical stores that focuses on selection. This means that the company is committed to providing its customer base with top quality products at a convenient price and in a convenient way. This mainly refers to the company’s decision of managing its carbon footprint by creating technology that would enable them with the ability to deliver the products sustainably. In addition to this, the mission statement also aligns with the company’s approach towards lean manufacturing as it believes in managing prices. This management of price can also refer to the company enhancing its productivity while simultaneously decreasing its waste production and save a lot of funds while doing so. This evidently refers to the idea that through conveniently pricing their products on the basis of quality and value, the company enables itself to attract a ton of customers. Furthermore, this also enables the company to save money since it has chosen to double check the quality of its ingredients as well as its products which helps it manage its waste production and also cut down on costing. Thus, Amazon fulfils the promises it makes in its mission statement while also benefitting from its lean manufacturing approaches in a lucrative sense. In regards to the company’s vision statement, it aspires to be the most customer centric company in the world and enable its customers with the facility of being able to find anything that they might want to buy online in one store or website. This aligns perfectly with the company’s lean manufacturing practises as they are able to keep their customers happy while also connecting with their suppliers to provide better quality products all in one place. This evidently suggests that since Amazon, because of its lean manufacturing practises strives to partner with its suppliers, it will be able to provide its customer base with the best quality products while also minimising its waste production (Luo 2020). This will not only enable the company to enhance its production as well as sales but would also enable it to be a contributing and responsible member of society as it would decrease its waste production.
Conclusion
Therefore, in conclusion, it can be said that Amazon as a company focuses heavily on the satisfaction level of its customer base. The company believes in catering to the needs and demands of its customers but also contributing to the betterment of the environment that it is a part of. The above paper shed light on the SWOT analysis of the company which helps in assessing the macro environment of Amazon. In addition to this, the above paper also discusses Porter’s five forces of the company. The paper also discusses the corporate social responsibility of the company which sheds light on everything that the company does so that it can give back to the community. In addition to this, the paper discusses the concepts of lean manufacturing which mainly refers to enhancing productivity while decreasing waste production of a company. The paper also elaborates on how Amazon as a company practises lean manufacturing within its functioning. The paper further discusses certain recommendations that the company can implement in order to enhance its lead manufacturing approaches. Finally, the paper assesses the vision as well as the mission statements of Amazon as a company and justifies whether these statements align with the company’s lean manufacturing practises. It is also important to note that Amazon as a company believes in not only serving its customer base but also contributing to the betterment of the planet which is why the company practises lean manufacturing diligently and also takes its corporate social responsibility extremely seriously.
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