7008IBA Amazon case study

7008IBA CASE ANALYSIS 1

Amazon case study – see Fortunate magazine article titled: Amazon was built for the pandemic—and will likely emerge from it stronger than ever by Brian Dumaine, 18 May, 2020

 NOTE: Only one member of your group is required to submit the case analysis through the submission point. You must use this template for your analysis. All members must individually complete an electronic coversheet.

See marking rubric for criteria for guidance. Criteria includes critical analysis, comprehensiveness and clarity in writing within 500 word limit (+/- 10%), as well as application of coursework theory to the case study and use of at least five peerreviewed articles.

Question 1: What are Amazon’s core competencies and how are they being integrated into the firms routines and recombination capabilities to deliver their product/service?

Question 1:

Amazon has evolved to become the world’s largest ecommerce marketplace and it is known for its technological innovation. One of the most significant core competencies that allows Amazon to stand out in the competitive market is leveraging technology. An example of this is where the CEO, Jeff Bezos invested billions incorporating advanced technology that allows its packages to be delivered by self-driving vans, small robots and drones (Dumaine, 2020). Prime Air is a future delivery system from Amazon designed to safely get packages to customers in 30 minutes or less using drones (Vincent & Gartenberg, 2019). Prime Air aims to increase overall safety and efficiency of the transportation system. Certainly, automation will increase productivity and efficiency, it is also an opportunity to relieve humans from repetitive working environments.

Self-sustaining platforms is another indispensable factor. Amazon has created a closed ecosystem for buyers and sellers by introducing Prime, Marketplace, FBA, and AWS. The Prime membership system uses its digital power to integrate into customers' daily lives. It attracts a large customer base by providing free delivery services, video and audio, and subtly makes customers feel dependent (Dumaine, 2020). The large product range is the most significant feature of Marketplace's third-party seller platform and It meets the needs of customers all over the world (White, 2019). FBA logistics service simplifies the purchase process and achieves quick and effective delivery. Sellers ship their products to the fulfilment centre, and the Amazon platform is responsible for the pickup and delivery product. AWS provides a stable and secure operating platform for the seller’s IT system and uses cloud computing services to integrate transaction data. Therefore, the closed ecosystem gradually formed a flywheel effect and formed a virtuous circle, locks people into the Amazon ecosystem and eliminates competition. 

REFERENCES

Dumaine, B. (2020). Amazon was built for the pandemic—and will likely emerge from it stronger than ever. Retrieved from https://fortune.com/2020/05/18/amazon-business-jeffbezos-amzn-sales-revenue-coronavirus-pandemic

Vincent, J., & Gartenberg, C. (2019). Here’s Amazon’s new transforming Prime Air delivery drone. Retrieved from https://www.theverge.com/2019/6/5/18654044/amazonprime-air-delivery-drone-new-design-safety-transforming-flight-video.

White, L. (2020). Amazon VRIO Analysis - Competitive Advantages, Core Competencies - Rancord Society. Retrieved from https://www.rancord.org/amazon-vrio-analysiscompetitive-advantages-core-competencies.

Question 2: Describe any boundary rationality issues Amazon is experiencing at present or could experience in the future?  

For any company to become competitive in the global market, it must consistently improve its products, processes, sales technique, services, and adaptability to new situations. Many businesses have been affected because of the Covid-19 pandemic. Amazon, which is ranked second on the Fortune 500 companies, has also been impacted because of the pandemic. Few of the challenges Amazon is facing are;

  • Employee welfare: Amazon has hired 175,000 additional frontline workers to meet the surge in online shopping which is being driven by the COVID crisis. The employee's unrest and the outbreak come at a time when Amazon needs all handson deck. The company has a massive surge in orders in weeks since the widespread virus. The company faced the challenge of keeping the workforce safe from the virus while continuing to keep worldwide delivery and logistics engine running. But the mounting cases are causing frustrations sparking walkout which has caused an unprecedented challenge for the tech giant. Meanwhile, workers in Amazon are facing difficulties and tradeoffs of their own (Nicklesburg, 2020)
  • Growth Concerns: Investors were surprised as Amazon issued lighter than expected fourth quarter, forecasting between $80 billion and $86.5 billion in revenue for the holiday quarter versus analyst's estimate of $87.4 billion. Other cloud rivals like Microsoft, Azure, and Google cloud have progressively gained market share in the evolving market for cloud service.
  • Shoring up trust: Third-party sellers have made up an increasing share of products on Amazon in recent years. This comes with its host problems such as fake, counterfeits, and unsafe products. This puts the company's reputation online. (Xin Li, 2020)

REFERENCES

Nicklesburg, M. (2020). Amazon faces unprecedented challenges as dozens of warehouses grapple with COVID-19 outbreaks. https://www.geekwire.com/2020/amazonfaces-unprecedented-challenges-dozens-warehouses-grapple-covid-19-outbreaks/. Xin Li, S. B. (2020). Modern challenges in comapany

classification. https://www.weareworldquant.com/media/1905/wq-perspectives-companysector-classifications-v3.pdf.


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