Overview of Amazon Company

Discuss about the E-Business Applications for Amazon Company.

The internet development has led to a dynamic change in different business industries and the shopping habit of customers across the globe. Traditionally, consumers bought products through physical stores such as retail stores and supermarkets. However, advancement in technology has resulted in the emergence of e-business which involves the purchase of goods and services through the internet. The online business is continually positioning itself as the most successful business strategy. The e-mails success and effectiveness mainly depend on the presence of an efficient marketing strategy, strategic supply chain management and high level of network security. Amazon Company is an example of e-commerce companies that has utilized technology to penetrate in the world markets; therefore, this paper seeks to focus on e-commerce strategies of Amazon Company.

Amazon is one of the leading American multinational e-retail companies that provide various types of products. This giant online retail store is based in Seattle, Washington, United States of America. The enterprise has originally established a bookstore. However, it has continually diversified its commodities over years. The major strategic objective of this enterprise is providing a one-stop store experience for its esteemed customers, where they can purchase all the organization’s products. Amazon operates as an online retailer that does not have any physical store (Berman 2011). The company’s items are transported and delivered to its loyal customers through Amazon’s supply chain system which consists of networks of distribution centers. This type of operation helps Amazon to provide a wide range of high-quality types of products at affordable costs. Online retail chain system has lowered its cost of operation and thereby, Amazon sells products at relatively low prices. Moreover, it increases customer satisfaction since it facilitates customer convenience (Bradshaw & Brash 2011).

Amazon has incorporated various marketing strategies to help it get the lion’s share of the market. Since the company targets middle and upper-class customers, its products are designed in a manner that meets the financial capability of these classes. Product differentiation is a marketing strategy that has helped the company to expand its market share across the globe. Although the company was initially established as an online store, it has continuously diversified its products by developing and providing new products in the market. Currently, the company provides a variety of products ranging from e-books, electronics, games applications, and kindles. Product differentiation has enabled Amazon to attract many customers and hence, increasing its sales. Also, the prices of the company’s products are much lower as compared to those of its close competitors such as e-Bay and Walmart (Chaffey 2011).

Marketing Strategy

The supply chain of the company has helped it to reduce its operation costs by eliminating intermediaries such as wholesalers. Therefore, the company can sell its products at relatively low costs without making losses. Moreover, the Amazon utilizes technology in product promotion and marketing of its services. The company’s website attracts high traffic jam, which enables it to be easily accessible by online communities. It uses its website to advertise its products and services. Moreover, Amazon makes good use of social media platforms such as Face and Twitter to reach out to the young generation and persuade them to consume its products.  Another crucial marketing strategy adopted by this online store is the free delivery of goods to its customers. Immediately after the client has ordered and made the necessary payments for the product, the Amazon Company makes arrangement for the shipment of the product to the customers. This after-sales service has helped the company to retain more customers (Chen & Chang 2013, p. 557).

In create its unique niche and differentiate its products and service from its key competitors in the market, Amazon has developed various e-commerce and IT start-ups such as Zappos.com, audible.com, pets.com, and Woot. These applications enable the company to offer high-quality goods to its customers by utilizing the existing technology at affordable costs. The e-commerce company has also attained economies of scale by offering diverse products to its clients. These products range from DIY, electronics, computer games, e-books to apparels. These e-commerce applications give the company a competitive advantage in the industry which has enabled it to position itself among the major successful e-commerce enterprises across the globe (Hernandez & Bennison 2010, p. 358). 

Other e-commerce applications utilized by this giant online company include push strategy, product page, and online transaction systems. The push strategy directs the company’s website contents on services and products. Companies with smaller sites utilize this technique for one product per page. However, large websites like that of Amazon expand the push strategy by developing catalog or an online mall for many products in which each item dominates a particular web page. Push strategy enhances online buying of products since it has features that draw the attention and creates the interest in the website’s visitors to purchase these products. Attracting visitors who are searching for particular products is an excellent strategy of establishing a profitable online store (Johnson & Whang 2012, p. 415). The product page contains the product description information and an attracting design that comes with high-quality professional photography and page layouts that provide an interactive and user-friendly interface. Also, the product pages on the company’s website are designed with features that enable the prospective buyers to provide feedback on the products.

E-Commerce Applications

Customer reviews and product information forms a powerful strategy that helps to convince and persuade customers that make the right decision by purchasing Amazon’s products. Moreover, the product pages contain information that provides the key features and benefits of the products. The other important tool for online business is transaction system. The system of ordering is in the form of the shopping cart. On the other hand, its purchasing systems have a user-interface with a bank account which helps online buyers to use electronic debit and credits to purchase goods.  The Company allows its customers to use online payment systems such as PayPal and Skrill which are more convenient, with a high level of security (Fernie & Sparks 2014).

For any e-commerce enterprise to successfully meet the needs of its customers, it requires an efficient supply chain management to ensure the continuous supply of commodities and develop sustainable competitive benefits in the industry. There are many benefits associated with an efficient and effective supply system. Such benefits include shorter product life cycles, inventory reduction and quality improved service delivery. A successful online enterprise requires its supply chain linked to its competitive strategy goals. Amazon considers its clients as high responsiveness. For the organization to respond to high uncertainty demand and availability of brand products, the enterprise has established various components such as outsourcing, inventory management and transportation of products that drive its outcome (Dupuis & Prime 2016, p. 33). 

One of the essential benefits of outsourcing is that it assists the business company to specialize on its primary functions as a strategy of lowering its operation costs. Amazon is one of such companies that need to take the advantages of these advantages associated with inventory outsourcing. However, it has outsourced only some part of its inventory as a mechanism of controlling risks and service optimization (Liebermann & Stashevsky, 2012, p. 292).

The company offers various delivery options for its clients as a strategy of managing transportation costs. Amazon offers free shipping services so as to achieve longer lead-time of transportation. It helps the enterprise to reduce transportation and benefit from the economies of scale. The company partners with the third party logistic firms in the transportation of its products to the customer. The key logistic company that partners with this giant e-e-commerce enterprise is DHL. However, Amazon uses order to check and package systems in tracking its product while on transit. Also, the company makes use of applications such as Linux, SQP, and Oracle to enhance service delivery (Chopra & Sodhi 2014, p. 53).

Supply Chain

Under online business, a security transaction passes through key steps such as identity verification of the concerned parties, data encryption, verification of the data integrity and preventing any of the involved parties from denying the trade outcomes. The Amazon Company uses high-security measures such as the application of digital certificates, identity verification and data encryption to prevent its network from being comprised with security threats. Also, the company uses Secure Electronic Transaction (SET) and Security Socket Layer (SSL) which protects its customers against online fraudsters and hackers (Allen, & Fjermestad 2011, p. 14). SET is a security technique that protects online stores, e-wallets and certificate authority from against access by unauthorized individuals. Its role is to protect the confidentiality of data and reliability of information as well as identifying the accounts of online buyers and sellers.

Also, financial institutions such as banks use SET protocol to approve online transactions as a mechanism for maintaining a high level of security in e-business (Marchany & Tront 2012, p. 2502). SSL protocol is designed to protect the integrity, confidentiality, and openness of information to the entire online payment system. It is mainly utilized in preventing data and information in web pages of the online transaction from theft and destruction.  The users of the Amazon’s online payment system are given various forms of passwords and usernames which play the same role as an encryption technique. This technique is utilized to authenticate the authorized users to log into their accounts on the Amazon website (Akkermans,  Bogerd, & Vos 2014).

Conclusion

The existence of an effective supply chain management, use of effective marketing and security strategies are major factors that have contributed to the success of Amazon Company. This e-commerce company’s main objectives are to provide a one-stop service center where consumers can get all products on one site, and will deliver the products to customers on time. To achieve these goals, the American e-retail store needs to establish a productive relationship with its customers and partners through a multi-tier inventory system which facilities timely delivery of unlimited products to the clients. Also, Amazon has maintained an efficient distribution and supply chain to transport goods to the customers.

List of References

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