Internet technology plays a prominent role in today’s society. The Internet is used in all industries. Select an organisation of your choice that uses Internet to operate the business. Based on the selected organisation, analyse and report the following:
1. The organisation and type of products sold.
2. Features and functionalities of the website.
3. The information requirements and the type of systems used in the website.
4. Impact E-commerce has on the organisation. You may include benefits, challenges and risks.
Amazon.com. Inc, popularly known as Amazon is a retailer organization that sells products over the internet. Headquartered in Seattle, Washington, the efficiency of the electronic commerce and cloud computing services of the organization has made it the largest inter based retailer that presently operates in the United Sates (Amazon.com, 2016). The organization had initially started as an online bookstore: however it slowly diversified into selling digital materials like that of audio books, mp3s, Blue Rays, DVDs, CDs and so on and so forth. At present, the organization sells a wide range of products: starting from software to jewelry, books, apparels, household items, food products, furniture, toys and much more. Amazon has also started consumer electronics under their brand name: the e-book readers popularly known as the Amazon Kindle being the most popular ones along with Fire Phone, Fire TV and Fire Tablets (Curty and Zhang, 2013). Bedsides this, at present, Amazon is being considered as one of the largest cloud infrastructure service providers of the industry, surpassing the US based retail-giant Walmart in terms of market capitalization.
Thus, it can be said that the main goals of Amazon .com include the maintenance of a link between the consumers and the suppliers, improving communication with the retail customers, improving the sales target and enhance the level of services being provided to the customers. Besides this, the organization also intends to serve customers from various markets and create more customers from the daily visitors. Trough this report, we intend to explore the extent to which the electronic commerce facilities provided by the organization facilitate the process of realizing their goals.
2.1 Features and functionalities of website
In this section of the report, we intent to discuss the various features and functionalities that are available on the e-commerce site of the amaazon.com. As present in all other electronic commerce sites, Amazon has a dedicated home page. The home page hosts the various promotional offers that are currently being made available to the customers, information regarding the top selling products of the website, the new products or services that are about to be launched by the organization, the price reductions that are currently available, etc (Huang, and Benyoucef, 2013). Besides this, the home page also contains information regarding the promotional offers that would be available in the near future, along with the links to the products pages.
Amazon displays all available products and services under different categories. All electronic gadget are to found under the ‘Home, Kitchen & Pets’ section, computer devices and accessories are to be found under a separate section of their own, the books available on the store are either available under the kindle readers and e-books category or under the ‘books’ category and so on and so forth (Rahman and Dominic, 2012). The various features that are available in the products ages have been discussed in the following sections of the report:
2.1.1 The transaction processing system:
Once the customer visits the products page, he or she is able to select a specific product by scrolling down the entire webpage. Amazon allows their users to select and buy products and services through easy steps and make online payments through secured transaction gateways: the following processes help in providing the said services to the customers:
1. One click ordering: Amazon provides one click ordering facilities to the customers which allows them to select and order the products on a single click (Bao and Chang, 2014). Besides this, the facilities of personalized purchase services and easy online transactions are also available to the customers. One of the commonly used features that deserve a special mention include the one click ordering services available to the existing customers: while new customers have to fill up the order details after making a ‘one-click purchase’, the existing customers are exempted from performing this activity.
2. Secured card payment: Amazon.com not only encourages the customers to make payments online but also provides secured gateways to make payments through debit and credit cards.
2.1.2 The product recommendation system:
Amazon generates list of products, based on the last purchase habits of the customer and the products (belonging to the specific category that the customer is visiting) that are most popular among the other customers. This list displayed in the products page, as the customer scrolls down to search for specific items. Needless to say, such a recommendation system encourages the customers to purchase products in much larger volumes than they would have made by going through all the available products by themselves and selecting one from those (Turban et al. 2015).
2.1.3 An interactive searching option: While a customer can go through the entire range of products present in particular methodology, the website also provides them with options to select products based on certain filtering criteria ( like that of price, color, features, material etc) (Klaus, 2013). This interactive searching option makes that task of purchasing items from Amazon.com much easier.
2.1.4 Order tracking: Amazon.com allows their customers to review the status of the orders placed by them (Eames et al. 2014). Besides this, the customers are also provided with various updates as and when the orders are processed.
2.2 Information requirement and types of systems used in the website
On its initial days, Amazon used separate system for taking orders from the client and a separate system for fulfilling the orders: the objective behind such a system was to avoid the internet security issues that might result from maintaining both the systems on the same server. At present, the organization had renovated the entire system and utilizes software packages (Epiphany for data analysis and the ‘Manugistics’ for the maintenance of their logistics) from reputed IT vendors, for collecting and analyzing the customer and enterprise data(Imran, 2014). The database maintained by the company runs on Oracle DBMS.
In order to maintain information related to the large number of services and products that are available on the website the organization utilizes the custom made Simple Storage Service (SS) and the Amazon Web Service (AWS) (Crowston, 2012) .
The Smart Analysis search or the SAS allow the organization to map the characteristics of the purchase behavior indicated by the purchases made by the clients and the products that they are currently searching for, in order to make recommendations to them (Solaymani et al. 2012).
2.3 Role of information system in achieving the goals of the organization
In this section of the report, we provide a brief description on how the various business goals of Amazon.com are met by the information system that is currently being used.
1. Smart Innovation Strategy: Although Amazon conducts business based on the basic business to consumer or the B2C model, yet bringing about strategic changes in the way in which their website operates have been helpful in generating a sense of curiosity among the target customers (Beynon-Davies, 2013). As for example, at present the organization allows small business groups to utilize their platform, in exchange of which they receive commission from them. Thus the business model has changed from sales to sales and service. The goal of maintaining the links between the suppliers and the retail customers and providing services to both the groups have become possible due to the utilization of this model.
2. Customer relationship management: Maintaining a good relationship with the customers and providing efficient and timely services to them is one of the major goals of Amazon.com. The information system has been effective in fulfilling this goal as the Simple Storage Service (SS) and the Amazon Web Service (AWS) help the organization to record all information related to the purchase orders placed by the customers (Marz and Warren, 2015). This in turn facilitates the process of after sales services.
2.4 Impact of e-commerce on the organization (Amazon.com)
In this section of the report, we discuss about the effects of electronic commerce system on the operational system of Aamzon.com. A brief discussion has been provided in the benefits of the e-commerce system, the challenges that Amazon.com experiences due the e-commerce system and the risks associated with this system.
2.4.1 Benefits of e-commerce system on Amazon
1. The first and foremost point that should be considered while discussing the benefits that Amazon avails from its electronic commerce system huge operational costs that the organization saves. Maintaining a physical store is associated with various costs like that of paying rents for the store space and paying electricity bills, along with the initial set up cost that the organization would have to incur. Besides this, the ecommerce model helps Amzon.co to serve larger customer base than a physical store could have (Traver and Laudon, 2012).
2. Availability of large scaled customer information helps in decision making.
2.4.2 Challenges of e-commerce system of Amazon
At present, Amazon.com faces the following challenges:
Uniqueness of content: Since Amazon sells a large number of products to the customers, the description of each of the products must be unique. Such uniqueness would ultimately reduce the time required to search products from the store. However, currently, such unique contents are not available in Amazon.com (Crowston, 2012).
2. Improve the mobile version of the website: The full-fledged mobile version of the website puts certain restrictions on the purchase of products. Although the organization encourages the customers to use their smart phone applications, yet the mobile website should also be enhanced (Klein, 2012).
2.4.3 Risk associated with the e-commerce system of Amazon.
In the very recent past, Amazon has invested highly in developing their cloud service infrastructure. At present, the cloud infrastructure of the organization is considered to be at the same level as that of Microsoft. However, the later, having high scale revenue generating from the said infrastructure would be able to make further investment on it (Bergström, 2013). On the other hand, it is less likely that that Amazon would be able to upgrade the cloud infrastructure on a regular basis (due to very high investment issues) thus any break down of this infrastructure actually has the potential of destroying the entire business venture of Amazon.
3. Conclusion & Recommendations
This report provides a detailed discussion on the various aspects of the e-commerce business model used by Amazon.com. The business goals and objective of the organization have been discussed in the introductory section of the report, along with the background of the organization. In the following section, the features and functionalities of website have been reviewed. The discussion made in this section of the report is indicative of the fact that the business success of the organization is largely based on the features that have been included in the e-commerce site. These features have been custom built so as to provide better buying experiences to the customers.
In section 2.2, a discussion has been provided on the information systems that are currently being utilized by Amazon to maintain the functionality of their website. The research work that has been conducted so as to reveal the true nature of the IT system of Amazon has lead us to believe that the organization utilizes custom-made cloud-based platforms in order to store, manage and analyze the huge amount of data that are being generated and accessed through their website on a regular basis.
The next section provides a discussion on how the e-commerce model is being helpful in realizing the business goal of the organization. It has been noticed that the e-commerce site not only helps to cater to the needs of large section of target customer, but Amazon can better understand the requirements and the buying behavior of the customers by analyzing the huge amount of data that is collected through the website. The availability of large scale of data also facilitates the process of developing business/ market strategies.
While considering the effects of e-commerce on the business of Amazon, it has been noticed that the very same cloud based infrastructure that is providing Amazon an added benefit over the other market competitors is also the sole risk sector of the organization. Besides this, Amazon should also emphasize on developing unique content for each of their products and re-designing their mobile website for enhancing their services.
In the light of the discussions made in the report, the following recommendations are being made to the management of the Amazon.com:
1. Regular up-gradation of the cloud infrastructure should be performed so as to maintain the sustainability of the e-commerce platform.
2. The mobile website and the applications should be re-designed from time to time in order to keep pace with the emerging technologies, besides catering the security concerns of the customers using such devices.
3. The management should also start investing in innovative technologies in order to enhance their brand value: as for example delivering products using unmanned drones might be considered as an interesting option.
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