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Information System Management Amazon

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Questions:

1.Give a Brief Introduction of the Business.

2.What is the Innovative Business Model using IT?

3.What are Innovative Business Processes using IT?

4.What are the Innovative Products or Services offered using IT?

5.What are the Innovative Business Values?

6. What are the Revenue Streams or Revenue Model?

7.What Technologies are most Important for this Model (RFID, ROBOTICS, 3D Printing. Or all).

8.Evolution: How this model has been Emerged?

9.Leadership: Background of the people behind it.

10.Who are the Stakeholders?

11.How do they do Competitive Advantage?
 
 

Answers:

1.Introduction on Amazon  Business

The report depicts the importance of implementing Information Technology in Amazon.com. The organization was founded by Jeff Bezos in the year of 1995. Initially, Amazon created a virtual platform for the book lovers and used to serve books. Amazon.com serves their services to the consumers, sellers, buyers and enterprises all over the world (Amazon 2015). The company has recently built a mobile application for the consumers, which could be accessed by the consumers regardless of their location and time. The price range and delivery time for the products are comparatively less than other online stores. Thus, most of the consumers prefer to use this online store to get their desired products. The integrated Information System used by Amazon.com includes supply chain management and customer relationship management to the customers. Due to innovative business strategy, Amazon.com has become one of the most successful online business organizations. The Electronic commerce business model used by Amaazon.com is found to be very much beneficial from the business perspectives. As, the number of consumers for the organization is growing rapidly thus, they need to add certain business and information strategy to satisfy the consumers (Varia and Mathew 2014). They provide their comments and responses only for the branded products served by Amazon.com. From the current annual report of Amazon.com it has been found that, though certain consequences are associated to the system but still the revenue structure is higher than other online service providers.  Moreover, in order to grab competitive advantages from marketplace the organization uses different innovative business strategies and integrated Information System.

2.Innovative Business Model Using IT Used by Amazon.com

The Chief Executive officer of Amazon.com stated that the concept of Business model innovation is referred to as a new emerging technology nowadays and it is the core or base for the entrepreneurial startup. In order to speed up the delivery of products and services, RFID tagging technology has been introduced by Amazon (Girotra and Netessine 2013). With the help of this technology the products tracking and monitoring has become more efficient.  The existing software and robotics based infrastructure of Amazon is merged up with RFID and thus the delivery has become faster than others. It helps the organization to gain competitive advantage from the marketplace. Recently Amazon has received a high quality deal of attention to plan for the unnamed aerial vehicles widely known as drone to deliver products rather services to the consumers regardless of their location.  It also improved its automated warehouse with addition to a virtual work zone for the robot and workers at the same time. In order to resolve the existing business inefficiency, Amazon implemented a centrally controlled system that will provide a routing instruction to the business organization.  The instruction will be provided to the robots those are outfitted with the RFID tags. The technology will help to boost up the productivity of private and public automated warehouse of Amazon. The Amazon Web Service (AWS) provides a wide range of accessibility, data storage, backup resilience and disaster recovery to the organization.

The evolutionary business model of Amazon.com shows that from 1995 to 2010 the business model is continuously changing by the developers. The inventory changes according to changing year are as follows:

Year

Inventory changes

1995

An online book retailing portal

1999

An auction and zshops

2000

Marketplace

2001

Partnership and logistic as well

2002

e-commerce platform

2007

E books

The business model canvas of Amazon.com is build up of 9 building blocks such as consumer segmentation, revenue stream, cost structure, different key resources, consumer relationship management, key partnership, channels, key activities and value positioning (Madduri et al. 2014). All the components of the business model are interrelated to each other and none of the component could be executed singly. The service oriented architecture of Amazon.com is distributive by nature and the decentralized service platform makes it more robust and scalable.

Figure 1: Business Model Canvas of Amazon.com

(Source: Girotra and Netessine 2013, pp- 540)

3.Innovative Business Processes Using IT used by Amazon.com

With the help of new cloud service currently Amazon is serving a automated business process. In order to provide large scale management services and transaction throughput Amazon.com is adapting significant Business Process Management (BPM). With the help of Simple Work Flow (SWF) service launched by Amazon Web Service (AWS) the customers of Amazon.com are capable to access both the cloud based and on premises business applications (Kalin 2013). The technology driven components of the business process help the service providers to make effective control and co ordination with the implementation steps including tracking and monitoring. In order to create image processing, video encoding, infrastructure provisioning the business process of Amazon is using the Simple Web Flow (SWF). Different work flow of the business model plays different organizational tasks in a co-ordinate manner. The architecture of the business process includes the workers and the deciders as well. All the tasks of SWF are executed with the help of the workers and the deciders. Different programming languages could be used for writing the workers and deciders with the help of the SWF by using the API web services (Slagel et al. 2015). The program could be executed in cloud, on premises or in both platforms. Before adapting the SWF an enterprise could also test its efficiency. Though, the business process of Amazon is not available all over the world but still they are trying to serve the requirement of the consumers.

 

4.Innovative Products or Services Offered by Amazon.com

Amazon prime is referred to as membership programs that provides consumer access to the streaming video, music, e-books and free shipping also.  This is a paid service that serves different sort of advantages to the consumers in terms of trial version. In order to get distinct advantages a user should subscribe to Amazon Prime. Amazon prime gives different deal and discounts to the users. Amazon Web Service (AWS) serves a large set of global could based products including computer, storage area, memory, data storage, analytics, networking, developing tools, management tools and internet of things also in terms of security and organizational application (Bernstein 2014). Another important service of Amazon is Amazon Go it is a new kind of store that has no associated checkout system. Amazon serves one of the most advanced shipping technologies and the free checkout shopping experience helps to get competitive advantages. Currently Amazon Go is open to the employees in the Beta programs but will be soon open for public also. Amazon has a cashier free self checkout system that is designed with the help of Robotics.  

Other list of products and services served by the organization are as follows:

Products

Services

Amazon Advertising and  Amazon Alexa

Connects the brand to the consumers and serves Voice control system.

Amazon Dash, Amazon Drive

It is a good ordering services and it also serves unlimited backup, disaster recovery and application resilience for photos,  video, files sharing

Amazon Echo, Amazon  Fire OS

Hand free speaker for voice controlling and Fire range of devices for the employees d consumers also.

Amazon Tap

Portable Bluetooth and wi fi services for the consumers and for the employees at the same time.

Amazon workspace and Amazon Web Services (AWS)

Serves a suite of cloud computing services for the consumers. It serves a secured desktop that run on the AWS.

5.Innovative Business Values

The robotics of Amazon is continuously focusing on Reimagination aspects for faster migration and continuous development.  A better picture imagined by Amazon has developed an effective connection which is capable to drive a complex issue to a simple one (Irani 2015). The simplicity of the solutions helps to drive the business faster easier and consistence as well.  It helps to mitigate the range of challenges by meeting the desired requirements of the consumers. Amazon store is using the RFID enabled tags abut they are not implementing it in their stores.

The innovative business models used by Amazon B2B and B2C, provides value to its consumers. Mainly in order to meet the requirement of the consumers the business is focusing to become a consumer centric business model. As the number of distributors and manufacturers are entering to the B2B e-commerce business model, thus the business is becoming more capable to serve the desired strategies (Sultan 2013.). The innovative business strategies are found to be very much beneficial.  The IT based model rather the integrated information system has efficiently built a supply chain management system and effective consumer relationship management system for achieving the desired business revenue model.  

 

6.Different Revenue Streams or Revenue Model 

From the current scenario it has been found that Amazon.com is one of the greatest revenue generating online organization over the world. Due to the introduction of different innovative business models Amazon is making profit from the marketplace. Before implementation of this business process, the developer of the online organization has gone through a “Regret Minimizing Framework”. Amazon is capable to make a large set of money with the help of the additional business properties and E-commerce venture as well. Instead of short term impact Amazon is currently focusing on the long term business profit generating models (Zheng et al. 2014). The revenue stream of the business organization showed that they could easily beat their competitors. After adapting an automated system flow Amazon is efficiently grabbing a large number of consumers throughout the world regardless of their location. Not only is this but also the organization is investing a lot for building robots that will allow the users to become more friendly. It is also able to automate the data warehouse process used by Amazon.com. In the initial phase the organization was not at all profitable from the business perspectives but after the implementation of Amazon Web Services (AWS), in the year of 2003, the business is exceeding the margin of the standard profit level. The revenue of AWS makes a 7% profit but the total revenue is all about 50% of the total revenue structure (Yadav 2013). Again the services and products served by Amazon.com are found to be the main reasons behind the success of the online organization.

7.Important Technologies in terms of RFID, ROBOTICS, 3D Printing           

Amazon.com is using B2B and B2C business model for their business development and different technologies such as ROBOTICS, RFID and 3D printing could be used for the business model. There technologies used by different business models have their own value and features. Each and every business features are effective and beneficial from the organizational perspectives. Microsoft has developed RFID as an alternative for 3D printing (DaSilva et al. 2013). In order to track a set of orders and for gathering information from different resources, for the manufacturer, barcodes and electronic chips these kind of applications are used by most of the online shopping supporting business organizations. The technology used for 3D printing is also known as additive manufacturing. Though, for most of the end products this technology is not fund to be cost efficient. The 3D printer provides a lower range of price point and high valued system features for the computing system. The high valued commercial expectation of Amazon services are running faster and the due to these innovation the shortcoming are mitigating at a rapid rate. Across the product spectrum, the speeds of the printers are increasing at a rapid rate. The concept of prototyping modeling has driven out the usage of the 3D printing.  The RFID system works in two divided segments such as a tag or a label and a reader. The labels are associated to the transmitter and receiver to receive the radio frequency and transmit it to the desired location (McCreary and Kelly 2014). The Robotics of Amazon.com is looking for the continuous development and innovation In order to adapt large scale business growth, they are focusing on Reimagination. In order to turn complex business problems a simple solution, a better connection is required to be developed in terms of Reimagination. From the technological perspectives it has been found that 3D printing, robotics and RFID all of these are associated.  

8.Evolution of the Business Model in Amazon

The business models used by Amazon are B2B and B2C and about 800 pound of gorilla of the E-commerce has announced the launching story of the business models in the real world of application. After platform migration the developers realizes that implementation of B2B is a little harder than the others.  The seller of amazon.com has offered their services in around 45 business specific categories (Klaus 2013). The category includes IT, tools and food at the same time. In addition to this, the features of the business model is consists of different business pricing, quality amount of discount, seller programs etc.  Amazon performs an exceptional and efficient measure against the revenue per visitor that is referred to as one of the key measuring tool for the commercial website. In the initial day the organization used to serve only book for the book lovers butt gradually they implemented online website that was consists of several categories (Girotra and Netessine 2013). The major vision and the strategy of Amazon is to develop a consumer centric business model for the consumers. The Amazon online value positioning is communicative and it could communicate both online and offline.  The online website is user friendly and through the online communicating platform the users and the service provider could interact with other efficiently. The consumers who want to access the official website of Amazon are required to register themselves with the website. Amazon has over 76 million of consumer accounts but only 1.3 million of sellers in the marketplace (Bergvall?Kåreborn and Howcroft 2014). With the help of B2B business model the organization is capable to serve online secured payment service also.

9.Leadership Principle in Amazon

While analyzing the leadership strategies for Amazon it has been found that the principles of leadership management are precisely used by the organization. The main leader behind the success of Amazon is Jeff Bezos. The leadership strategies helped the organization to operate efficiently (Varia and Mathew 2014).  A list of leaders and executives are found while evaluating the success of the business organization. The founder of Amazon is the pioneer of e-commerce business strategies used in different business organization. The leaders motivate the employees to earn their trust and commitment at the same time. The leadership principles used in Amazon are as follows:

Consumer obsession: The leaders of Amazon.com are strictly consumer focused and work at the backend of the business organization. In order to keep the trust of the consumers the organization is working vigorously (Madduri et al. 2014). They also keep their attention on the competitors to increase the growth revenue structure.  

Ownership: The business leaders are the owners and their active participation helps to increase the long terms values for the short term business results. The owner plays active roles behalf of other employees of the business organization.  

Invention and simplicity: The business leaders of Amazon are focused on innovation and invention from their project development team members (Kalin 2013). They are focused to new technologies development in order to simplify the work load and pressure.

Hiring and developing the best: The leader of the HR department of Amazon, raise the bar of performance after each hiring approach. They look for exceptionally talented person who will be able to serve innovative ideas to others.

10.The List of Stakeholders of Amazon.Com

Amazon is one of the most well-known online E-commerce organizations that is capable to satisfy their stakeholders throughout. It uses Carroll’s model of corporate social responsibility (CSR) to measure the satisfaction of its stakeholder and the required responsibilities that are needed to be served by Amazon (Mathew and Varia 2014).  From global aspect it is found that, Amazon should respond to the requirement of the stakeholders by evolving comprehensive CSR business strategies. With changing time Amazon’s stakeholder’s interest also keeps on changing. For global reach the condition needs a broad range of scope in terms of business strategy, policies and programs as well.  It needs to provide more effort to satisfy their stakeholders. Amazon maintains the CSR to target the interest and requirement of the stakeholders (Bergvall?Kåreborn and Howcroft 2014). Most of the E-commerce organizations face major challenges and pressure from the stakeholders and to avoid this problem, Amazon has designed an effective CSR program to gratify their stakeholders. The groups of stakeholders of Amazon are as follows:

 


Consumers: The designed CSR provides high level of priority to its consumers. It has considered that consumers are their primary determinant to increase the business success.  The mission and vision statement of Amazon implies this clearly as it highlights the centrality of the consumers.  Amazon’s CSR has advanced communication and information strategies for secured transaction, logistics and product delivery as well (Varia and Mathew 2014.). By maintaining the competition among the sellers Amazon provides fair price with a maximum benefit.  In order to ensure the consumer convenience, Amazon maintains advanced pricing and marketing mix business strategy.

Employees: Employees are the group of significant determinants to Amazon as the organizational performance is dependent on their individual performances (McCreary and Kelly 2014). They provide high compensation, special training and development programs to develop their skills.  

Communities: It also maintains CSR for communities because they play important roles to change the perception regarding the services and products of the consumers. The interest of the community includes development support through education, environmental conservation and healthcare communities.  

11.Competitive Advantages in Terms Of Porter’s Five Forces

Amazon competes with many online organizations including smaller to larger online retail stores. Strong focus on the external market helps Amazon to enhance their resilient and conditional changes in the business organization (Amazon 2015). While evaluating the intensities of Amazon, the five factors that came under consideration include:

 


Competitive rivalry: It competes against many large to medium online retail industries throughout the world. Most of the retail firms are found to be very much aggressive in nature and thus they exert a strong range of competition to Amazon. The major competitors of Amazon are Walmart, Flipkart, Myntra and many others. Due to high availability, Amazon has faced strong force of substitutes (Girotra and Netessine 2013). In order to achieve competitive advantages, they must adapt strategic priorities in terms of long terms competitive solution.

Bargaining power of the buyers: The mission and vision statement of Amazon implies that, due to the consumer centric approach the consumers are capable to access a large set of category regarding sells and services.

Bargaining power of the sellers: The suppliers control the availability while supplying materials to Amazon as per the requirements of the E-commerce operation (Mathew and Varia 2014).  Amazon experiences moderate range of intensity for the bargaining power.

Threat of the new entrants: The consumers of Amazon could easily access as  per their needs and high availability of products help them to compete against medium to large business organization.

Threats of the substitution: Many new business organizations are innovating everyday which provides potential threat to the online retails business of Amazon (Madduri et al. 2014).  The consumers of the business organization could easily switch from one firm to the other whenever they want.  Based on the external factors it has been found that, due to minor strategic issues, Amazon’s performance as an online retail industry is getting affected currently.

Figure 2: Porter’s Five Forces for Amazon

(Source: Madduri et al. 2014, pp-2269)

From the overall discussion it could be concluded that, the marketing tools and technology used by Amazon are very much effective from the business perspectives and the goal of the business organization is becoming very much straight forward. From the Middle East and Arab word regional aspect it is found that due to the efficiency of the logistics, most of the people are interested in online shopping. Amazon is capable to grab a large set of consumers from this region only. The advanced and innovative business strategy and price range is comparatively lower than the other retail online organizations. It helps to increase the business revenue structure and due to this Amazon is capable to gain competitive advantages from the marketplace.  In order to convert the analogue information to digital information application of digitization technology is the simplest way. Not only this but also Amazon.com is capable to prosumers also. The term prosumers means those consumers who are very much brand conscious. The products and services served by Amazon helps to build a consumer centric business and thus the revenue model of the organization are growing day by day.  In order to simplify the Service work Flow (SWF) the implementation of AWS SDK a component of Java is found to be very effective and beneficial from the business perspectives. On the other hand, the electronic consumer unit and the Amazon Web service provide different offerings to the organizations. Sometimes, if the consumer electronic numbers are not found in the exact location that time, the Amazon has turned into the Amazon’s profit generating unit

 

References

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Bernstein, D., 2014. Containers and cloud: From lxc to docker to kubernetes. IEEE Cloud Computing, 1(3), pp.81-84.

Bharadwaj, A., El Sawy, O.A., Pavlou, P.A. and Venkatraman, N.V., 2013. Digital business strategy: toward a next generation of insights.

DaSilva, C.M., Trkman, P., Desouza, K. and Lindi?, J., 2013. Disruptive technologies: a business model perspective on cloud computing. Technology Analysis & Strategic Management, 25(10), pp.1161-1173. DaSilva, C.M., Trkman, P., Desouza, K. and Lindi?, J., 2013. Disruptive technologies: a business model perspective on cloud computing. Technology Analysis & Strategic Management, 25(10), pp.1161-1173.

Fernandes, D.A., Soares, L.F., Gomes, J.V., Freire, M.M. and Inácio, P.R., 2014. Security issues in cloud environments: a survey. International Journal of Information Security, 13(2), pp.113-170.

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Girotra, K. and Netessine, S., 2013. OM forum—business model innovation for sustainability. Manufacturing & Service Operations Management, 15(4), pp.537-544.

Irani, L., 2015. Difference and dependence among digital workers: The case of Amazon Mechanical Turk. South Atlantic Quarterly, 114(1), pp.225-234.

Kalin, M., 2013. Java Web Services: Up and Running: A Quick, Practical, and Thorough Introduction. " O'Reilly Media, Inc.".

Klaus, P., 2013. The case of Amazon. com: towards a conceptual framework of online customer service experience (OCSE) using the emerging consensus technique (ECT). Journal of Services Marketing, 27(6), pp.443-457.

Madduri, R.K., Sulakhe, D., Lacinski, L., Liu, B., Rodriguez, A., Chard, K., Dave, U.J. and Foster, I.T., 2014. Experiences building Globus Genomics: a next?generation sequencing analysis service using Galaxy, Globus, and Amazon Web Services. Concurrency and Computation: Practice and Experience, 26(13), pp.2266-2279.

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Sheng, Q.Z., Qiao, X., Vasilakos, A.V., Szabo, C., Bourne, S. and Xu, X., 2014. Web services composition: A decade’s overview. Information Sciences, 280, pp.218-238.

Slagel, J., Mendoza, L., Shteynberg, D., Deutsch, E.W. and Moritz, R.L., 2015. Processing shotgun proteomics data on the Amazon Cloud with the Trans-Proteomic Pipeline. Molecular & Cellular Proteomics, 14(2), pp.399-404.

Sultan, N., 2013. Knowledge management in the age of cloud computing and Web 2.0: Experiencing the power of disruptive innovations. International journal of information management, 33(1), pp.160-165.

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