Determination of the external environment of Amazon

Technology plays an important role in helping the contemporary business organizations to gain competitive advantages in the market. This is due to the fact that, technology refers to the use of updated and latest methods and processes in order to accomplish the particular task effectively (Nicholas and Steyn 2017). However, there are some business organizations, which have leveraged the maximum benefits with the use of the technology. Amazon is one such organization, which have used technology to gain competitive advantages in the market along with changing the existing business scenario (Thamhain 2013). Amazon first initiated the use of technology by introducing the concept of online shopping when this concept is relatively new in the market. However, with the help of the latest and updated technologies, they have been able to provide and enhance customer convenience, which helped them to grow further.

This report will discuss about the various areas where Amazon is currently using technologies along with its advantages for them. Moreover, the impact of the technology on the business portfolio of Amazon will also be discussed. Accordingly various recommendations will be discussed, which will further help them to enhance their competitiveness.

To determine the effectiveness and viability of the technologies being used by Amazon, it is important to evaluate the external environment of Amazon. This is due to the reason that, technology will only be proved viable if they are being effectively aligned to the external environment of the organization.

As discussed earlier, Amazon involves extensive use of technologies for their daily operations. One of the prime technologies being used by them is their online marketplace. Initiation of the online marketplace involved latest and updated technologies for them as well as for their customers. Moreover, their online portal is being updated on a regular basis according to the change in the preference and taste pattern of the customers.

Another technology being used by them is the automated mechanism for inbound and outbound facilities in their supply chain and logistics management. Using of automated technologies in their warehouse enabled them to incur less time in delivering the products to their customers (Seuring 2013). Recently, they have started the use of robot in their warehouse facilities. Using of robots in the warehouse helps them to reduce the cost of inbound and outbound facility along with increasing the efficiency. This is due to the reason that, mechanical robots are being capable of transporting more payloads compared to the manual employees along with less probability of error.

Another attractive and contemporary use of technologies being initiated by Amazon is the use of the drone. They have initiated the use of drone to deliver the products to their customers in less time compared to the current time taken for delivery. Thus, it is another updated technology being used by Amazon in enhancing the customer convenience (Chen and Tsou 2012). In addition, it will also help them to deliver the products in less time. According to the reports by Amazon, with the help of the drone, goods can be delivered within 30 minutes of delivery.

Initiation of technologies by Amazon

Amazon is also having an effective customer relationship mechanism to address the grievances of their customers and other customer queries. Amazon maintains automated customer queries management such as chatbots to provide proper mechanism to meet the customer requirement (Wang and Feng 2012). Moreover, they are also updating themselves according to the development in the communication technologies in the market.

For the contemporary business organizations, managing the human resource effectively is having much importance due to the reason that the personal skill and expertise being possessed by the employees are important to gain competitive advantages in the market. The internal stakeholders in Amazon are being connected through an online portal, where they can communicate with each other. In addition, it also helps them to establish the communication channel between the upper level management and the employees.

Challenge: 1

From the above discussion, various issues that may be faced by Amazon are being identified. One of the key issues will be the cost involved in initiation of new technologies. It will involve huge investment for Amazon to introduce new technologies due to the reason that, new infrastructures and the skilled employees should also been involved. Thus, with the rapid change in the technology, it will cause Amazon huge investment (Dabholkar and Spaid 2012).

For instance, EBay started their business as online auction portal but with time they also have to enter in online shopping market due to the change in the preference pattern of the customers. Thus, this caused huge investment to change the business perspective frequently.

Challenge: 2 

Another risk being identified is the uncertainty regarding the potentiality of the particular technology in the market. In the case of Amazon, they will involve huge investment in introducing new technologies or technological products.

However, if the technology fails, then it will have adverse impact on the performance of the organization. For instance, Amazon has invested huge capital in developing Fire phone to compete with the likes of android and Apple. But due to various reasons, the project failed in the market and along with Amazon faced a huge loss in the market.

Challenge: 3 

Another key issue that may be faced by them is the frequent change in technology. This is due to the fact that, in the current business scenario, technology is rapidly developing and evolving. Thus, it is important for Amazon to periodically update their existing technologies along with introducing new technologies to cater to the changing market scenario. It will pose challenge for Amazon due to the reason that, it will be difficult for them to invest more frequently and rapidly change the technology being used by them.

For instance, at one point of time, Amazon used the man power only to deliver their products. However, with the rapid change in technology, they involved drones and other GPS enabled devices to deliver their products.

Challenge: 4

Another challenge is having the proper and suitable market for the new technologies being initiated. This is due to the reason that, initiation of the new technologies will succeed in the market only if the majority of the target audience is comfortable with it (Dabholkar and Spaid 2012). Thus, involving of huge investment in initiation of the new technologies may get failed if the target audience cannot accept.

Technology in supply chain management

For instance, Amazon started to sell hotel deals as Amazon Destinations online, which got failed due to less interest in the market. Thus, the target audience was not ready to accept the new concept. It caused investment failure for Amazon.

Conclusion 

Thus, it can be concluded that, initiation of technology is helping Amazon in gaining competitive advantages in the market and on the other it will also pose some challenges for them. In this report, the various types or areas of technology being used by Amazon are being discussed. It is being evaluated that, Amazon is using extensive technological practices in order to cover all the probable areas to cover the requirement of the customers along with enhancing their convenience. However, there are various issues are being identified in this report, which need to be overcome by them in order to enhance the effectiveness of their technologies. The following sections will discuss about the recommended steps that should taken by Amazon in order to overcome the challenges. Moreover, it can also be concluded that, technological development will be inevitable and thus, business organizations have to update their technology with the change in time. Thus, it will be beneficial and helpful for the business organization such as Amazon to gain competitive advantages with the help of newer technologies.

• Amazon should initiate proper market research prior to the introduction of the new technology in the market. This is due to the reason that, majority of the new technologies being introduced by them will be targeted towards their customers (Gharajkhani and Eslami 2012). Thus, it is important for them to initiate effective market research in order to determine the acceptance level of the target audience along with determining the requirement of the market. Accordingly, the technologies should be designed and modified.
• New technologies should be made available with the help of the third party vendors. This is due to the reason that with the help of outsourcing, the cost involved in initiation of the new technologies in the market will be reduced along with reduction in the associated risk (Sparrow 2012). Thus, outsourcing will help Amazon to reduce the cost in research and development and reduce the risk of uncertainty regarding the initiation of the new technologies.
• In the introduction of new technologies for the internal stakeholders, it is to be considered by Amazon that the inputs or feedback from the employees should be given importance. This is due to the reason that, gathering of the opinion from the employees will help the organization to design their new technologies accordingly (Ruck and Trainor 2012). Thus, it will be effectively accepted by the employees. Concept of co-creation will be beneficial for Amazon due to the fact that, it will enable them to effectively gather the feedback and requirement from the employees.
• As being earlier discussed, it is important for the internal and external stakeholders to have the knowledge about new technologies being introduced. Thus, it is being recommended that, Amazon should train their employees regarding the specifications and the operations of the new technologies (Ji et al.2012). This will help Amazon to have the equipped employees, who will further help the customers to get accustomed with the new technology. Thus, eventually, the target audience will be equipped and trained with the new technology.

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