MBA503 Operations Management And Decision Making Models

Introduction

The purpose of this report is to answer the questions related to the Operation management of Amazon, the impact of e-commerce in retail business and the Amazon’s inclination towards the Australian retail market. As a matter of fact, this report can deliver a clear identification of the current trend in the retail business sector around the world and subsequently tries to point out the intensity of the Amazon Inc. in order to establish dominance in the global retail market.

The operating management of Amazon is considered to be one of the largest online retailers providing variety of categories coupled with satisfying the desire of the customers. In this regard, it can be argued that the business model of the company is very important in terms of coping with the growing change in the international trade as a result of globalisation (Chen and Shi 2017). It can be argued that on the eve of the globalisation it is important for the global organisations to encompass various approaches in the form of product diversity, large warehouse inventories and maintain the quality of the product.

In this regard, the product diversity is one of the key features that the Amazon Company has possessed in order to maximise its business expansion. The Amazon Company puts focus on the designing of the goods and services in this regard. It can be argued that technology plays a major role in diversifying the products and get in touch of the customers. For an instance, the advanced communication and information system of the Amazon is entitled to deliver a better online retail service and at the same time ensures efficiency in targeting the customers (Sestini et al. 2015). The extensive automation plays a pivotal role in streamlining the business process. Moreover, the effectiveness of the supply chain management is able to develop a better framework where the customers can contact with the suppliers whenever they need.

In this context, the role of the inventory management is highly essential. The Amazon Company in its inceptive phase was inclined to sale only online books and printed forms as well. In course of time, the Company has started to expand its market occupation by selling CDs and DVDs and after that intensely capitalise the market with clothes, electronics, toys and other daily items. Therefore, the inventory management becomes a pertinent factor that is beneficial to boost the market capitalisation of the Amazon Company. In fact, the Amazon Company maintains an optimal inventory ordering and holding (Cui, Zhang and Bassamboo 2018). As a result of that it is beneficial for the Company to foster a better in-time inventory management where the finished products after arriving the Company fulfilment centres are immediately shipped off for the delivery. Moreover, the warehouse employees are well trained and swift enough to enlist the orders and the products in a company database. The optimisation of the online retail inventory size is coupled with minimizing the costs and is able to satisfy the market demand.

Quality of the product is another aspect of creating a link with the change in the global market in the light of the globalisation. Product quality is very important in this regard. As a matter of fact, the Amazon Inc. puts emphasis on maintain the quality of the product so that it can generate customer maximisation in course of the market capitalisation (Flanagin et al. 2014). Furthermore, in order to make the customer more satisfied with the service, the Company is going to maintain a continuous improvement effort in its business (Porter and Heppelmann 2015). Organisational culture is considered to be highly beneficial for the company that is intertwined with the incorporation of the innovative ideas and problem solving tools.

With the rapid transformation of the global market and the introduction of internet in 1990s the orientation of the customer perceptions changes its nature. In the previous days people were more familiar with the practice of visiting retail stores and choosing the best item of their needs (Chiu et al. 2014). However, Amazon creates a heavy impression on the global market place with its virtual market. The wave of technology and the convenience approach facilitates the customers to incline towards choosing e-commerce as the best options for meeting their requirements. According to the study carried out by Qu et al. (2015) it can be argued that there are approximately 800 stores in US that are closed due to the lack of visitors. It is not a case of lack of location strategy or the absence of knowledge regarding the customer behaviour. It is rather the impact of e-commerce that facilitates an end to the in-person shopping. In this regard, there are some advantages of the e-commerce that are responsible to play a pivotal role, such as,

Impact on consumer behaviour

It can be seen that the online shopping offers ease and interactive solutions to the customers and as a result of that the clients are getting more comforts in shopping and quality of products. Moreover, the customers can access various numbers of products that are not available in a retail store all the time.

Waste of papers can be prevented by implementing the online retail purchase. In the traditional online purchase wastage of packaging was a very detrimental aspect that the companies were very concerned with. However, in the online system there is no such issue regarding wastage of packaging (Hannak et al. 2014). Moreover, the carbon footprint is also an important aspect of the e-commerce purchasing practice. It can be stated that now the customers can get whatever they want by using the e-commerce facility (Yu et al.2014). Therefore, transportation costs, time and energies are being saved that is so essential to protect the environment. Moreover, comparing the prices of two or more products and also having details of the suppliers are able to provide a better decision making process for the customers.

Advantages to the company

The e-commerce system is considered to be beneficial for the companies as well. In this regard, the Amazon Inc. is able to maximise the market capitalisation by implementing the e-commerce strategy. It helps the company to save its expenses to develop an online service instead of building and maintaining the retail stores (Yu et al. 2014). However, from the intense competition point of view, the e-commerce strategy is very beneficial to attract more customers because in this process the customers do not need to visit the stores in person rather the store supplier will deliver the product at the door step in time (Cui et al. 2017). Therefore, these advantages forced the Amazon Company to introduce a better framework with the incorporation of the e-commerce.

It can be argued that the lower price is considered to be an important aspect for maximising the market occupation for a company. In this regard, the Amazon Company is going to implement the lower price strategy in order to encapsulate the market more intensely (Yang 2018). In fact, Amazon offers many products at a low price in compare to the other retail stores and customers existed in Australia. In addition to this, special offers and packages for the customers are also an integral part of the pricing strategy of Amazon.

The free shipping strategy enables Amazon to maintain lower price in the items. It is an attractive feature of the company that will help to attract more customers to buy Amazon products. Besides this, the frequent shipping facility helps the company to deliver the products within one or two days from the date of the order placement (Cavallo 2017).

In expanding its business further Amazon is going to implement a registration of the online marketplace in a robust manner. It means the companies who are willing to make partnership with the Amazon Inc. can access their fulfilment by Amazon service, packages and shipments on behalf of the seller (Perry 2018). In fact, the Amazon Inc. wants to start slowly in the Australian market. The reason behind this policy is that the Amazon management wants to understand the perception of the customers and their behaviour at first. It will help them to set a price and develop the services as per the behaviour of the potential and target customers (Liu and Hong 2018). As a matter of fact, the intense competitiveness in the Australian market is a grave concern for the Amazon Inc.

Product variation

It can be argued that in the modern business paradigm, product diversity is considered to be an important aspect that all the companies must put into their objectives. In this regard, the Amazon Inc. has a wide range of products from books to household items. As a matter of fact, the Company encompasses a number of products that are not present in the other retail e-commerce retail Companies in Australia. It facilitates a better advantage to Amazon in capitalising the Australian market extensively (ABC News 2018).

Conclusion

Therefore, it can be concluded that the report tried to put emphasis on the current trend of the international market and the way Amazon operates its production, services and vision of market in reference to the transition in the global market. The e-commerce framework practiced by the Amazon Inc. plays an important role in this regard and is a strategic step in order to establish a better market holding in future by the Amazon Inc.

Reference

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