Business Structure of Amazon Company

Being a B2B and B2C business, Amazon, in reference to The Economist, was started by Jeff Bezos who owned an online bookshop, had its initial public offering in 1997 and since then it has been developing at quick stride, bringing large-scale disturbance not only to retailing but to a variety of businesses straddling logistics, entertainment, advertising and manufacturing in their home countries. It has also been developing its empires abroad. Amazon already has e-commerce sites in 14 markets and is planning additional growth. (The Economist) Business Model: Amazon makes business relations with businesses of all volumes, from single proprietorships to companies.

New and un-established industries can jump with personal accounts and then upgrade to a business account when their sales rise. Amazon’s numerous platforms and facilities are the basics for numerous of Amazon’s companies and associates. These corporations take advantage from the client exposure and improved sales opportunities whereas Amazon produces income over its own product sales, also through salaries from associations, fees and directives. (Chron, Charmayne Smith) Other than that according to Smart Insights it is said that there have been a variety of business model improvements that are concentrated on new services and hardware: For example kindle e-readers, Fire Tablet, smartphone and growth to the business-oriented Amazon Web Services. Amazon Major, and yearly membership program that contains limitless free shipping. AWS is not known outside of tech people, but Amazon is still following this mist service insistently. In 2011, 82 new features and services were introduced.

There are now 10 AWS regions in the world, which include the East of the United States., two on the West, Europe, Singapore, Tokyo, Sydney, Brazil and China. (Smart Insights, Dave Chaffey 19 Jan 2018) Source: (comScore, Bloomberg, JP Morgan estimates Jan 2011 Business Canvas: Chaffey’s Model Amazon’s Business Model Canvas Key Partners: Logistics associates Authors and publishers System of retailers Key Activities: Marketing Manufacture and design. Value Proposition: Suitability Price Massive variety Customer Relationship: Self facility Automatic facility Customer Segment: Single power Group power Worldwide customer marketplace Key resources: Substantial warehouses Human: Web application and Improvement Cost Structure: Low cost structure Economies of scale Revenue Streams: Sale of assets E books and content Instruction on reseller transactions. E-business Strategies: As it is said in Smart Insights, the preparation for numerous online stores, the lowermost prices are mostly for the famous products, with fewer famous products imposing greater prices thus a better margin for Amazon. Also, free shipping suggestions are used to animate growth in basket size because consumers are to spend above a definite amount to collect free shipping. Amazon connects the agreement in numerous methods, which include demonstration of modern inventory accessibility report, delivery time estimations, and choices for accelerated delivery.

The American customer satisfaction Index gave Amazon.com a score of 88 which was at that time the uppermost customer fulfillment score ever documented in any service business, whether it was online or offline. It has been noted by Round (2004) that Amazon has always focused on f customer satisfaction. Amazon’s each site is carefully checked with regular service obtainability observing for site obtainability and download speediness. Fascinatingly it also inspects per minute site revenue upper/lower boundaries – There is an alarm system more like like a control plant where when the revenue on a site is falling below $10,000 per minute, the alarms is to go off! (Smart Insights) Source: (Data compelled by eMarketer) Amazon has always focused on making the consumers happy. The budget for their advertising is small for its amount of the corporation, but they have always focused on being an indispensable part of their achievement. "If you do build a great experience, customers tell each other about that. Word of mouth is very powerful."

Amazon has also spent the amount of 2.8 billion dollars on digital marketing. Their sales from 2014-2015, was $71.84 billion. Over 90% of Amazon's marketing budget was concentrated on SEO and PPC in 2015. It is notable that the only other huge brand that has consumed more of their budget on search marketing is Etsy. Succeeding Amazon, the account for Apple was 85%, and the others Target, Best Buy, Home Depot and Kohls were all less than 20%. (Profit Works) Issues faced by amazon in e-business strategies: Recently, Wal-Mart scored a big win against Amazon.com. Wal-Mart’s on-line sales growth outpaced the sales of Amazon.com for the period ended Dec.31. Wal-Mart’s gains against Amazon.com follow a well-crafted strategy, which includes the acquisition of on-line search technologies and the building of warehouses. In 2013, for instance, Wal-Mart Labs, Wal-Marts e-commerce technology arm, acquired four start-ups: Torbit, a cloud-based website accelerator service; Inkiru, a predictive intelligence platform; OneOps, a cloud based automation technology; and Tasty Labs. Amazon remains the on-line leader, beating Wal-Mart by 7-1. Nonetheless, Wal-Mart’s strategy demonstrates that Amazon doesn’t have a sustainable competitive advantage. Any retailer with deep pockets to recruit or acquire the best talent can make a foray into its markets.

And Wal-Mart isn’t just any retailer. It is the biggest retailer in the world. And it got there by competing on pricing. That’s what makes Amazon’s problem big. It has been accustomed to competing on razor-thin margins, focusing on sales growth rather than profitability. Wal-Mart’s foray into Amazon’s markets may change the rules of the game— it will become extremely difficult for Amazon to raise the price of its “bundle,” or worse, it could fuel a price war that may extinguish Amazon’s thin profit margins. (Forbes) By contrast, Amazon.com followed a different strategy. First, it built the warehouses -- it stacked the books, and filled the orders. Second, it launched a shrewd strategy of promotions (discounts and free shipping) that allowed the company to attain economies of scale. Third, it branched out to all sorts of merchandise, to attain economies of scope—sometimes by signing up on-line affiliates. Fourth, it expanded into the content development business, by partnering with first time and recently with experienced authors. Fifth, it jumped into the electronic device market, which provided a vehicle to sell electronic content and other online merchandise. In a sense, Amazon.com has been applying a number of strategies regular companies have deployed for years, including Standard Oil, the famous monopoly of the 1880s. Amazon.com has been expanding both horizontally and vertically, raising barriers that keep competition off its turf, as other successful web-based have been doing, But with customers resisting a price hike, Amazon may find itself with too much capacity in the face of slowing demand, extinguishing already thin profit margins. (Forbes)

According to Harvard Business Review when Amazon decided to enter the Indian e-commerce market and after a decade into the new period, India, with a population of billion-plus citizens and mainly unused e-commerce marketplace, signaled. The country modeled a definitive circumstance of good and bad news. The good news was that the country had a very young population more than 65% under age 35 with increasing stages of salary, and omnipresent cell phone possession (80% of the populace, by approximation). The bad news was that the 67% of the populace lived in countryside branded by an undersized substructure. And only around 35% of India’s populace is associated to the Internet. Cash is mainly used not credit cards or inspecting accounts, is quiet the rule. And India endorsed a stiff FDI rule limiting foreign multiband merchants from marketing straight to customers online. That destined that for Indian made products any venture would basically be a third-party retailer. Mostly vendors in the country and small and there is no shortage of good produced by Indians. About three years ago, comparatively few sellers vended their goods online because they supposed e-commerce to be moreover multifaceted and time consuming.

Amazon established a platform to recruit any crowd of contractors and persuade them it was a dependable associate that could actually benefit them to upsurge the market for their products and so it launched its first Indian website in 2013. Amazon rolled out a schedule called Amazon Chai Cart, which were mobile teacarts that directed city roads, assisting refreshments to owners of small businesses while educating them the qualities of e-commerce. The Chai Cart team apparently toured more than 9,400 miles through 31 cities and affianced with around 10,000 suppliers. To support these suppliers get online rapidly and discourse their oppositions to e-commerce, last year Amazon made Amazon Tatkal, a self-described “studio on wheels” that provides a suite of launch services, such as registration, imaging, cataloging, and sales training. (Harvard Business Review JULY 20, 2016)