The Amazon brand is known for its fast-paced growth into a multi-billion-dollar business under the leadership of Jeff Bezos. In 1994, Bezos was working on Wall Street when he realized that internet revolution was about to break out ( Sherman, 2011, p. 11). Settling on selling books online, the company has since grown to stock all kinds of items. Amazon is now the largest e-commerce company in the world and accounts for 53% of the e-commerce growth in the United States. According to Forbes, Jeff Bezos has also replaced Bill Gates, now worth more than $90 billion courtesy of rapid increases in the value of Amazon stock ( Singh & Useem, 2016, p. 8). Bezos achieved this success by coming up with clearly marked strategies that have propelled the company to experiencing vast growth.
When it comes to customer service and satisfaction, Amazon ranks high. Bezos is known for his belief that customers have to receive special treatment, even more than the employees do (Sherman, 2011, p. 11). He believes that a company’s focus should be on its customers rather than on strategies to beat the competition. Bezos talks about the power of the word of mouth, calling it a more effective marketing tool than any other existing, especially in the internet age (Sherman, 2011, p. 13). In the physical world, an unhappy customer would influence the attitudes of five people but online, an unhappy customer can influence the opinions of thousands. Therefore, Amazon has worked very hard to ensure that their customers are satisfied on all fronts such as product quality, delivery time, packaging, availability of products, return policies and others.
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Flexibility of the company has enabled quick implementation of ideas. Amazon has developed a culture where ideas quickly go from concept to execution, making it a highly innovative company (Drapkin, Lowy & Marovitz, 2011, p. 18). In the event that there is new technology, the company gets to implement first and make the most of the new technology before other companies adopt it and lower returns by increasing competition in the market. Bezos believes that the end of a business comes when it has ceased to evolve and modify its business practices. Therefore, Amazon has continued to embrace change.
Similar to the idea of flexibility, Amazon has built an internal environment that promotes fresh thinking and conception of new ideas. Constantly working on new and more effective solutions to customers’ needs has enabled Amazon to innovate and to increase the value delivered to its customers (Sherman, 2011, p. 14). From drone-aided delivery to the possibility of using artificial intelligence in operations, Amazon has acquired a reputation for implementing new daring concepts into its business structure.
The fourth success strategy is diversification. Amazon started as an online store that sells books only but has now grown into a store that sells all things, from food, automotive, health, electronics, beauty, and clothing to equipment. A search through the company’s site shows that diversification is not just in the item kinds, but there are thousands of choices for each item (Singh & Useem, 2016, p. 10). For example, searching for ‘soups’ produces more than 3,000 soup listings. Customers now have the privilege of choice. Interestingly, Amazon does not only work with consumers, business owners have the opportunity to contract with a large company that has a wide reach to consumers across the world. Therefore, Amazon has ensured diversity in terms of the supply, which in turn attracts a diverse audience.
Amazon also uses economies of scale as a success strategy because when the supply price is low, the company will also offer its products on low prices ( Drapkin, Lowy & Marovitz, 2011, p. 20). With large warehousing and a large customer base, the company is able to source its goods and services at low prices, attracting consumers in large numbers. Although the baseline is to make a profit, Amazon is also interested in maximizing its free cash flow by ensuring a large outflow of goods and services, and this is only possible using low prices to attract customers. Economies of scale have allowed the company to meet both its profitability and traffic targets.
In conclusion, much like other successful tech companies, the success of Amazon has been closely tied to Jeff Bezo’s leadership. Bezos’ emphasis on the need to treat customers specially, flexibility through the quick implementation of ideas, fresh thinking and innovation have all contributed to the company’s sporadic growth. Diversification of products and low prices has also ensured traffic to the company’s site. However, some strategies like innovation and diversification have not always brought the expected outcome. In trying to offer everything, some ventures fail and cost the company money. For example, the Fire Phone, which was praised as the future of Amazon, was a market flop, with its price even falling to 99 cents yet this did not entice consumers. The device caused a huge dent in Amazon’s finances. There is also a claim that Amazon treats its sellers unfairly, which soils the company’s reputation among customers. That said, Amazon maintains its primary duty as ensuring superior customer service and a dedication to research and development.
Going into the future, Amazon will profit from continuously working on its core primary missions especially due to the development of machine learning and artificial intelligence to create virtual assistants for its customers. Customers remain a key element of any business and the company ought to improve both its reputation and the quality of service to its customers.
References
Drapkin, M., Lowy, J., & Marovitz, D. (2011). 3 clicks away: Advice from the trenches of eCommerce . New York: John Wiley.
Sherman, J. (2011). Jeff Bezos: King of Amazon . Brookfield, Conn: Twenty-First Century Books.
Singh, H., & Useem, M. (2016). The strategic leader's roadmap: 6 steps for integrating leadership and strategy . Philadelphia, Pennsylvania: Wharton Digital Press.
Stone, B. (2013). The everything store: Jeff Bezos and the age of Amazon . London: Bantam Press.
