Operations Management at Amazon

Operations Management at Amazon
Amazon is the most cost-effective way to reach out to a wider audience and
prompt a response from the business. However, its effect on the commercial
outcome has been mixed. While Amazon has paved the way for many
businesses to grow, it has also provided small and mid-sized organizations a
competitive advantage. The initial foundation of Amazon was built on the belief
that selling books online would give them a significant appeal. Jeff Bezos, the
founder and CEO of Amazon, made the right decision by starting his company
in books. This product’s popularity among the users convinced Jeff Bezos to
place his trust on the brand. Initially, he wanted to call it Cadabra, but he
changed it to Amazon when it was confusingly called cadaver. A vision of the
CEO of Amazon.com coming out with smart decisions and a well-planned
strategy was realized in the company's recent acquisition of eBay. The e-
commerce giant then started diversifying its offerings, which included a wide
range of products and services.
Extensive R&D by amazon
Extensive research conducted by Amazon's R&D team is a critical success
factor that sets the company apart from the competition. The Amazon Case
Study shows how the company's R&D department spent over $35 billion in
2019. Some of the greatest innovations that Amazon has brought to the market
are Alexa, Prime Pantry, Amazon Music, and Prime Now. This organization has
taken advantage of the various resources it has to meet its business needs. It has
been able to sustain itself through the continuous improvement of its operations.
This organization values the diversity of products and services that it offers and
believes that this will enhance its commercial essence and position.
Major steps taken by amazon
Every venture is different and each one has its own set of risks and
opportunities. In 2014, Amazon heavily invested in two of its ventures, which
both failed spectacularly. On June 18, 2014, Amazon launched the Fire Phone,
the company's first ever smartphone. The device was designed to work
seamlessly with various media streaming options. Amazon ended its Fire phone
production due to a $180 million loss. In the same year, it also acquired Twitch,
which would help expand its gaming operations.
Supply chain management
Amazon is a pioneer in the field of supply chain management. Through its
continuous efforts in improving the efficiency of its supply chain, it has been
able to reap the benefits of a $100 billion profit in the last two decades. During
the initial period of Amazon's existence, employees were understaffed and
unable to meet the deadlines. This issue became the reason why the company
failed to meet its goals. Through the introduction of a two-day delivery service,
Amazon was able to stimulate its sales. Amazon has gained the reputation for its
impeccable inventory management and transportation services. This is
evidenced by the company’s continuous efforts to improve its efficiency and
streamline its operations.
Using drones for deliveries
Amazon Prime Air is a drone-based delivery system that will allow customers
to order food and other items from their homes or offices within a radius of 10
miles. This assignment highlights the company’s continuous effort to provide
the best possible service to its customers. It is also an indication of the
company’s excellent supply chain management.
Amazon’s operations management in light of increasing
globalisation
With regards to the international sales, Amazon has shown a drastic rise of 25%
and 12% respectively. Due to the complexity of their operations, this company
is not able to conduct international sales effectively. This is mainly due to the
insistence on their organizational infrastructure and the scope of their
operations. China and India are the new emerging economies that Amazon can
expect good returns from. Hence, the need for understanding the local factors
and their relative importance has been identified.
Challenges faced by amazon on international growth
The records revealed that Amazon had a higher profit percentage in North
American sales than in the international sales. However, the global sales were
significantly lower than those of Amazon. The core supply chain system of
Amazon tends to cover up the areas that are closer to the international markets.
This is where the need for infrastructure reforms comes into play. Some of the
factors that have restricted the opportunities that Amazon can offer are its land
grabbing mentality and limited opportunities.
Connecting small sellers with bigger clients
Amazon is the largest online marketplace that provides a huge variety of
products and services to its customers. The sellers have the ability to display
their products through Amazon is very beneficial for small businesses. They can
easily apply for a brand umbrella to represent their products and reach out to
potential customers. The aspiring online entrepreneur is given the necessary
resources and equipment to start their business. They are then asked to place
their products on Amazon for further exhibition. Contrary to the Amazon's
practice, many third-party sellers don't use their warehouses and fulfilment
services. They often drop out of the business deal. This is the reason why this
section of the workforce is focused on attracting leads and converting them into
orders.
Shopping online or in person
It is difficult to pick between online and offline shopping due to the varying
advantages and disadvantages of both the modes of commerce. However, it has
been observed that online shopping is becoming more prevalent and is capable
of attracting large number of customers. An online shopping portal is a great
way to reach out to the customer in a more personal manner. It saves the
customer time and helps them save money. However, it also requires a huge
amount of work and resources to set up. An in-person shopping experience also
encourages a customer to shop for more products that are not available online.
This is because it provides a more personal touch to the customer.
Conclusion
An acknowledgement of Amazon's achievements is necessary to acknowledge
their continuous efforts in taking the e-commerce industry to the next level.
Their intelligent business decisions and innovative strategies have helped them
achieve this feat.

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