Amazon company is one of the leading global companies which seeks to offer the world`s biggest selection and to be the world `most customer-centric firm where clients/customers can discover and find anything they may need to buy online. Amazon Company was the first internet retailer which secured 1 million customers. Amazon Company is known for huge sales of toys, electronics, hardware, and tools. This discussion aims to evaluate this famous company regarding its historical perspective, current sales and profits, challenges facing Amazon and the strategic plans that the CEO has raised to solve the various existing issues.
Historical perspective
It was started in 1994 by the name Cadabra at first. Amazon went online at amazon.com in the year 1995. The company was founded and launched in the year 1995 in Washington, United States. Moreover, what started as an online bookstore has today resulted as the largest online seller in the whole world? Its name, Amazon has developed within a short time.
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Current sales and profits
Amazon sales have been growing by $15 billion from one year to another, and its competitors don't even come close to that level of development. However, in 2018 sales, the company broke a pattern as it exceeded the expectations of wall street when it recorded 2.5$billion second-quarter profit which raised the company`s stock to 4% in after-hours trading. The big story of Amazon surprising profit was as a result of the company`s net sales of fifty-two billion dollars which were below the analyst's targets/projections. Amazon's net income of $2.5 in Q2 was more than ten times income level in last year in the same period. It was intentional that this company tend to strengthen its worst segment by managing to spend more and sell more. For this company to have recorded the huge and unexpected sales, it decided to take the risk of net loss of about $ 494 million in the year 2018 so far. "We`re very bullish on international investment,” said Mr. Olsavsky, the Amazon chief financier. Having made that huge and unexpected sale and profits, Amazon concludes that it will remain the leading company as an internet retailer of various products globally.
About the CEO
The American entrepreneur, Jeff Bezos is the Chief Executive Officer and the founder member of this great company, Amazon. He is also the owner of the `washing post.` Bezos` successful business ventures have turned him into one of the wealthiest individuals in the history of America and the entire world. The e-commerce pioneer, Jeff Bezos was born in Albuquerque, New Mexico on 12 th January 1964. It was during his early age in high school that he set his first business. Jeff has appointed some senior managers to help him manage the various Amazon segments. These general managers include David Zopolsky, Andrew R. Jassy among others who are in charge of variable sections of the Amazon Company.
Challenges faced by Amazon Company
Even though in the year 2018 Amazon Company has not incurred any loss, the existence of its various competitors has become a hindrance. Many Amazon sellers do not sell one type of items. They tend to sell items purchased by suppliers and whole sellers in bulk. If one buys it in bulk, it means that any other person can do too. In other words, Amazon is engaging itself in competition for similar items hence reducing its profit margin. Another challenge that affects profitability is that Amazon is expensive and complicated. When any business` terms and conditions are simple and clear, it is always likely to make high sales and profits. It is true that when one sells on FBA program with Amazon, the agreement is when one sends his/her item, to a houseware, they tend to seat there till the customer/client buys them. Learning amazon`s prep systems is also not easy thus decreasing their chances of becoming more competitive therefore the profit made seems to be less, but if the terms and prep systems are easy to learn, it would have made more profit. Even though Amazon Company can make a huge profit, some issues need to be addressed so that it may make more realistic profits.
Amazon faces various growth challenges which tend to pull it back despite Jeff `s effort of maintaining Amazon as the leading internet firm. The first growth challenge is that Amazon is unable to refocus to various countries. The fact that 95% of this company`s revenue is generated from Germany, Japan, and U.K, it is evident that Amazon company does not break out all the nations in detail. Moreover, it is likely that Japan, Germany, and the UK are the only countries that this company can ever achieve to reach. The company should aim at serving various countries instead of spreading itself so thinly. Another growth challenge is Amazon's land –grab attitude. In this case, the problem comes in when Amazon realizes its restricted window of opportunity to develop itself in the existing key markets before other companies become excessively entrenched. The land-grab attitude leads to Amazon's plan of spreading its ventures thinly across several markets instead of establishing and focusing on a few. Nonetheless, it is true that in several markets, it probably takes longer for a company to establish the best dominant location in the online trade that Amazon needs to grow. Even though Amazon was the first company to develop online markets, it is true that the quality of Amazon's marketplace is decreasing.
Competition is also a significant challenge that greatly influences this company. It presents the salient management risk that is faced by this Company. The general merchandise trading industry includes formidable competitors thus highly competitive. These competitors include target corporation, wall-mart-stores, wholesale corporation and Costco wholesale. All these retailers have greatly involved themselves in online sales networks in response to developing customers tastes and preferences. The developments of well-regarded e-commerce have greatly threatened the existence of Amazon Company. The existence of various competitors has endangered this global company thus a need to set up the necessary strategies that will assist it to continue as the leading online company.
How the CEO, Jeff Bezos addresses the challenges
Bezos makes it clear that most technology companies obsess over competitor rather than customers. These companies tend to wait and see what the rivals /competitors introduce and later try to match with it — instead, the Bezos advice that the companies should be listening to the clients/customers. He says that many firms term themselves as customer-focused, however, very few that walk the walk. He says “our goal is to invent new options that no one ever thought of” In other words, Bezos tries to put across the solution to reduce the issues of competition in Amazon by focusing on the tastes and preferences of customers is much important than focusing on what the competitors are doing.
Bezos addresses employees as the owners of the company. He argues that subordinates are the most important individuals in the company. Retaining motivated employees and identifying their talents will lead to a more productive company. Amazon Company has made it just because the subordinates are motivated and are taken as essential beings. Motivated employees will try their best in production thus recording high profits. When employees are respected and seen as any other person in the organization, be it a manager or the CEO, they feel that it's their responsibility to give their best in the company thus producing the highest quality of goods or services. Bezos explains that Amazon's success will be attained when the existing employees will be exposed to a situation of thinking like the owner, this will make them feel responsible for every mistake they make in the company hence reduction of risks at the workplace. Bezos argues that sharing of various benefits, whether it's a profit, bonuses or stock will make every individual in the company feel the success of the company thus reducing employee turnover to maintain the talents and abilities in the company to increase the profit/productivity.
Unsolved issues
Although Mr. Bezos has addressed the issues affecting Amazon Company, some of the problems are still unsolved. One the unsolved issues are unreasonable expectations and high standard. According to the current report of Amazon Company, it sets expectations that are unreasonably high. Even though these standards and expectations are devised with the aim of developing the abilities and talents of the employees, the unrealistic measures and expectations pressure employees who fail to meet them leading to significant distress. Another issue that is unsolved is setting unhealthy competition among workers. One can only work hard, long or smart, but the Amazon Company, employees, are not expected to choose 2 out of 3. Amazon`s culture is transparency of who is the highest achiever and who is not. Employees are expected to work long hours.
Moreover, the emails that are sent by Bezos at midnight expecting responses from his employees denies his employees the right for work-life balance. Disregarding employees ‘requirement for work-life balance will make them feel not contented with the work which leads to employee turn-over thus lowering productivity/profitability. Another unsolved challenge is insensitive management. In Amazon Company, employees who go through personal hardship-such as miscarriages, cancer, and other crisis are unfairly judged and are forced to recover and produce at their highest ability. The unsatisfied employees tend to produce low-quality products hence dissatisfying the customers as well. The issue of favoring criticism over harmony is also unsolved by Bezos. He believes in overvaluing of harmony in the working area forgetting that he suppresses honesty. Lack of employees` expression will lead to poor productivity and low profits in this organization. Generally, the unsolved issues in the Amazon Company lead to low earnings due to the production of low-quality goods and services which are as a result of dissatisfied employees who lead to customer dissatisfaction in this company.
Strategies
Amazon has deployed various approaches that have helped it have the innovations, ideas, partnership, and technological research. The first strategy made by the CEO Jeff Bezos is the setting of realistic and clear expectations. He explains that if one wants to raise his/her standards in a given area, he/she must first take a course of action to evaluate the quality of products that fit that particular area. He also says that setting realistic expectations for oneself is crucial such that one will be able to know how much work is needed to achieve that particular level of quality. The second strategy that is put across is staying across with the people one is serving; whether one is selling a service or a good, it is essential to make sure that one interacts freely with the people he/she is serving irrespective of how hard it may appear. To make this realistic, the CEO states that he still finds his customers feedback by reading the emails from his public inbox. He insists that focusing more on what clients are saying is more essential than concentrating on what the rivals are doing and for that reason he always compares the company`s data and the customers feedback to see where the company`s officials misalign. Another strategy that was set by the CEO Amazon company is `standards are contagious.` Bezos states that he believes that high standards are teachable, instead of sticking on the same group leader who may not be productive, introduce a more productive one onto the high standard team, and the team members will quickly adapt. He says that if the team or company operates with low standard, new employees may often work even unwittingly thus adjusting to work ethics is essential. It states that it's essential for individuals to discover their `blind spot ‘thus making a list of duties may help in evaluating the employees` strength. Following the huge sales and profits that Amazon has posted this year, it is clear that the CEO`s strategies are much working and successful irrespective of the existing unsolved issues, meaning that if these strategies are deployed continuously, the company will continue taking the lead in the online market.
Point of view
Even though the set strategic plans have worked out since Amazon has posted the huge sales/profits, the unsolved issues are still drawbacks of this company, and for this reason, Amazon needs to work out on its overall strategy. If I were the CEO, Amazon Company, I would have made every strategic initiative clear and realistic. For example, I would have dealt with the issues of work-life balances in a more positive way. As much as he argues of setting realistic expectation, he should know that that comes with relaxation of employees` mind by giving them time to cope with their life issues while outside the company, not sending them emails at midnight expecting responses and on the following day, expecting that particular employee to produce at his/her highest level.
Another thing that I would rectify is the issue of quality of goods and employees. As much as the CEO wishes to raise the quality and standard of products, it is important to note that long-serving employees are the best because they are experienced. I would train my existing managers rather than going for new ones who will need training from scratch.
