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Amazon Company’s Environmental Scan Essay


Introduction

Business like any other human activity through which man attempts to adjust his surroundings so that it can provide for his needs and wants operates within a matrix of a multi-faceted environment. Modern business organizations operate within physical, social, economic, legal, political, international and technological environments Paul (2006).

These environments are the fundamental source of internal and external factors which impacts up on the success of a business organization. A business organization can control internal factors but external factors are beyond its control (Jain et all 2009).So that in the long run the success of a business organization to a large extent depends on the adaptability of its policies and strategies to an ever changing external environment.

It is worth noting that modern business environments are increasingly competitive and fluid specifically because of the giant steps made by man in the field of information and communication technology (ICT).The purpose of this task is to conduct an environmental scan of the Amazon company in relation to its quest for survival and success amid business conditions which are increasingly global and tricky to manage thanks to advancement in ICT.

Amazon.com, Inc

Amazon Incorporation was established in 1994 as an online internet bookstore by Jeffery Bezos, Allan (2001). Amazon website became operational in July 1995.Today Amazon.com, Inc. is one of the biggest and most successful multinational e-commerce company. Its headquarters are in Seattle Washington.

Just like its name which suggests bigness, Amazon is the biggest online seller in the United States boasting almost three times internet sales of the second largest online retailer Staples, Inc as at January 2010.The name is derived from Amazon River which is the second longest river in the world. In the 1997 December 27 Times Magazine issue Amazon.com founder Jeffery Bezos was featured in the front cover as the “Person of the Year.” Allan (2001)

Amazon started as an online internet bookstore but it has since expanded its products to include items such as electronics, apparel, DVDs, CDs, MP3 downloads, computer software, video games, furniture, food and toys Allan (2001).In its efforts to expand its client base it has founded separate websites in giant world economies, that is, Germany, Japan, Canada, France, Italy, the United Kingdom, and China. Nowadays Amazon provides shipping services to specific nations for its products.

Amazon.com, Inc products

Amazon offers a wide range of products and services as noted above. For purposes of this task we shall describe a few of the products. We shall focus on Amazon books, Office products &office supplies and computer software.

Amazon.com books

Amazon, Inc is well known for its online book stores. Amazon facilitates shopping for millions of new and used books on thousands of topics at a retail price. They have a wide category of books which you can shop online. They have new and used books, text books and children’s books.

In fact, it is books that gave Amazon.com Inc, its start up in this industry. Today the mention of the name Amazon brings to the minds of many especially its older clients the picture of an electronic bookstore. Amazon offers competitive market pricing on various genres of books which customers can sample and shop online. The best and the latest books are always available on their website including those in the publication process.

Consistent Amazon book shoppers have access to book previews pages posted on their website. This enables them to determine which book out of a given topic category best go well with their needs. Allowing customers to access basic information about a book makes it feel like traditionally picking a book in a physical book shop and perusing through its pages to find out whether it contains the kind of information you are looking for.

Amazon.com offers delivery service of the books shopped online at a small reasonable charge to their customers within the United States as well as those abroad. Amazon books as they are popularly known have accelerated transfer of knowledge and ideas across our ever shrinking globe.

Office products & office supplies

Amazon offers an incredible collection of office products & office supplies. Their office products and office supplies included pencils, pens and paper.

They also comprised of stationeries such as office chairs and computer desks. These products are designed and assorted to suit business, small office and even home needs. Online purchasing of office supplies at the Amazon.com offers clients opportunities for the products to be easily delivered to them. That convenience coupled with Amazon’s office &office supplies give you the benefit of saving money and time on office supplies.

Amazon Office products are classified into three categories namely: Office supplies category like desktop calendars and planners, envelops, file folders, memo pads ; technology category which comprises products such as computers & accessories, copiers, drives &storage ; and office furniture category which entails products like chairs &sofas, desk accessories, desks &work statins,file&storage and drawer organizers .

Amazon Computer Software

Advancement of Information and Communication Technology (ICT) is facilitated by computers and Computer software. There is an ever increasing demand for computers and computer software and Amazon.com has not been left behind in satisfying customers needs for computers and computer software as well as computer accessories.

Computer software is one of the fastest growing industries during this era when every sphere of human life is becoming deeply computerized. And as Amazon sought to diversify their operations they were able to identify a ripe market for all sorts of computer software.

At Amazon.com various categories of computer software is available. They have computer software for business & office, accounting, education, entertainment and others. You can download software through their website and pay for the same electronically. This enables consumers as well as businesses to shop for their wanted software conveniently and economically since they can easily choose from a wide pool of soft ware available online on the Amazon website.

Environmental Scan of the e-commerce retailing industry

Amazon.com is a leading player in the e-commerce retailing industry. As noted earlier Amazon’s sales are more than three times that of the Staples Inc. which is the second largest e-commerce retailer in the United States. Business environment in this industry is the main source of the factors that determines whether it will continue succeeding and maintaining its client base.

Therefore, Amazon executives as well as employees shoulders the demanding responsibility of understanding all kinds of environments in which their company operates so that they can put in place the necessary measures to insulate their organization from the adverse effects of the environments.

Environmental scan is a major element of the planning processes in business. It is also known as a situation analysis or background review (Gorchels 2003; Alok &Mridula 2010). A business organization aims at achievement of certain identified desired goals and objectives. In addition to conventional goals of generating profits and remaining solvent, modern day business organizations have increasingly complicated goals and objectives to achieve within complex environments.

Without planning an organization lacks the needed sign post which acts as indicators of where it has reached in relation to its journey towards realization of its goals and objectives.

Gorchels (2003) argues that environmental scan is the step where product managers as well as other managers answer important questions such as where are we now. Followed by the all important question where do we want to go? This is one of the main features of a successful business plan. According to Gorchels (2003), the gap in between these two questions is the focus of the action plan.

Action plan offers approach and ways that explain how you will move from where you are to where you want to be after a definite period of time usually after one trading year. It offers you a road map towards the realization of the set goals and objectives. A typical business planning is finalized by determining the required resources both financial and non financial needed to carry out the strategies identified under action plan Gorchels (2003).

An environmental scan is a fact finding or data gathering stage aimed at driving a concrete decision making later Gorchels (2003). The need for reliable data during this phase in planning is anchored on the premise that managers can only answer the above questions truthfully by referring to a reliable data record of the previous events within and without.

Environmental scan has five main dimensions namely: upstream business goals, your customers and markets, the competitive situation, the business environment for your industry and an internal assessment Gorchels (20003).

Technology is a societal element which affects the society and which is in turn affected by the society. The internet has become a part and parcel of our lives in all aspects and the speed with which it has configured business or trading is alarming. According to Roger et all (1999) estimates show that there is a strong expansion in volume and value in e-commerce currently. This trend is projected to continue during the years to come.

Presently the number of players doing business online is increasing. This to the already established key players like Amazon.com, Inc. and Staples Inc. implies that competition is building up day after day as the internet sweeps the world of business. There are many advantages for both the buyers and sellers that accrue from the use of the internet as a trading tool like the prospect of finding much more information about a product or a service and customers than it is in ordinary trade.

Regardless of the various strengths that are associated with the idea of e-commerce many companies have encountered difficulties in making their e-commerce business a success and profitable. During the last one decade or so there have been a minority companies that have great success story to showcase in this industry and others in e-commerce business on the internet.

Examples include Amazon.com, Inc., CISCO, Dell and Staples, Inc.However, as more and more people embrace the use of the internet as their main source of virtually all information they need in their day to activities, business organizations will have no option apart from establishing a high profile web presence. The newspaper industry has already felt the pinch of this fact in the face of decreasing traditional readership as more and more young people turn to other sources of information on the internet.

There are various change means which are relevant to the industry of e-commerce trading. Demographically, Population increase as well as the number of people using and able to access the internet in the developed and the developing world might create a large market size and more business opportunity that will in turn benefit Amazon Roger et all (1999).

For the legally or regulatory environment a positive improvement on the traditional problem of secure transactions online is expected to increase the number of those willing and ready to spend online. Also Amazon and others are bound to be affected by a legislation regulating business in this industry.

For example, they are expected to use the US Federal Trade Commission (FTC). Otherwise a proliferation of defrauders and conmen posing as online sellers is bound to scare shoppers from buying online thereby hindering development and expansion of the e-markets.

Technologically; availability, affordability and accessibility of reliable internet tools that can enable sellers as well as buyers go online are obviously expected to determine how the market structure and situation of this industry will develop in future. Amid increasing competition Amazon.com should remain ahead of others by adopting development in any areas of It systems.

Impacts of Change Agents on the Market situation, structure and Competitiveness

Michael E.Porter (1979) identified five competitive forces through which the competitiveness in industry can be viewed in relation to the planning strategies of a company. The forces are: potential new entrants, bargaining power of the buyers, bargaining power of suppliers, threat of substitute products and rivalry among competitors (Kurtz et all 2009; Grünig, 2010).

Change agents relevant to this industry are inevitably bound to work to the advantage of many external forces like competitors, new incomers, end consumers and suppliers up whom the players in this industry do not have any control.

In a desperately competitive market with forces that are far beyond the control of the players in the industry, business organizations are bound to reconstruct their business values so as to safeguard their client base through innovation and optimization of assets utilization Kurtz et all (2009).So that competitiveness of a company will depend on its innovativeness as well as their ability to focus on prime assets.

Generic Strategies Used by Amazon.com for the Products Described Above

Amazon.com stands out as the best online book selling site and provider of computer software and office products and office supplies.Amazon.com ensures that people visit their site by offering them user friendly design, products, books and a high search capability of their site.

The Attractiveness of their site draws a larger pool of online shoppers. Unfortunately, due to the increased power of the customers when it comes to buying, shoppers turn to other players such as Buy.com.In addition, there are many new entrants in the industry all over the world who are proving to be real threats to Amazon.com like Staples, Inc. and Buy.com.Lower prices and high products offered by competitors like Buy.com that can satisfy customers needs in the industry is robbing Amazon.ocm its customers.

Ideal Vision and Mission for Amazon.com

Given the foregoing in this industry as far as the market structure, situation and competitiveness is concerned it is high time for Amazon.com revisited its strategy, vision and mission so as to safeguard its clientele and continue increasing its sales.

It should purpose to be the leading online retailer that offers products and services at the most competitive market pricing with less charges up on delivery of products to its customers. Its new mission should be to offer clients from all walks of life high quality products and services that can fully meet their changing needs.

This can only be achieved through establishment of a firm principle of customer service and satisfaction. Amazon.com executives should realize that embracement and maintainance of a superior customer service originates from a happy workforce who in turn gives happiness and satisfaction to the customers. However, they should remember that customer service that befits to be termed to as superior should be coupled with perfect products that can satisfy your customers’ needs fully.

Amazon.com planners can conveniently adopt some or all of the planning tools available Kurtz et all (2009). These tools include first and second mover strategies as well as SWOT analysis.Innnovatively, Amazon.com should purpose to develop long-term relationships with its suppliers and customers by being the first inventor of superior products or services. It can as well creatively improve on the old products in order to make them new and appealing.

Second mover strategy which the founder Jerry Bezos used to improve on Books.com founded by Charles Stack should be perfected so as to position Amazon .com as a provider of high quality products and services worth customers’ money. SWOT analysis planning should be used regularly by Amazon planners in comparing Amazon’s internal organizational strengths and weaknesses with external opportunities and threats Kurtz et all (2009).

During this age of welfare economies, social responsibility is becoming part and parcel of business organizations’ goals and objectives. Amazon.com should establish a high profile social or communal presence. It should objectively make sure that the society feels its presence through active participation in community development projects like giving to the less privileged and taking an active role in environmental management.

Amazon can also go the way of other big business organizations and form a foundation for helping the less privileged of the society and facilitating communal participation. This will attract people towards associating with it via consumption of its products and supporting Amazon.com sponsored projects.

Amazon’s ability to achieve this strategy and mission is firmly anchored on its ability to improve on its core competences (Daniell, 2004; Thompson &Strickland, 1997). It’s already smart marketing strategy should be reinforced by enhancing its web presence and going beyond the big economies internationally where it has established separate websites. It should be the first to explore the unexploited markets in the emerging economies of Asia and Africa by taking advantage of its financial might.

Since its inception Amazon has intensively diversified but it still has potential to diversify further. Technological competences like One-click shopping and Email alerts which are unique to Amazon.com should be strengthened and improved and others innovated to make achievement of this strategy a reality. Where necessary Amazon should seek to partner with companies that can enable it provide its services competitively in new markets.

Conclusion

Leadership, corporate culture and financial capability of an organization are critical in determining whether it will be able to achieve its strategy and vision. The leadership guides other stakeholders in the execution of the tactics determined as the pathway to the desired position in the market. Amazon should take advantage of its world class leadership and corporate culture coupled with its giant financial capability to attain this strategy and vision. Its operating revenue of over US$1.4 is more than enough to make this possible

Reference List

Allan, Roy A. (2001) a history of the personal computer: the people and the technology. Glasgow: Allan Publishing.

Daniell, Mark H. (2004). Strategy: a step-by-step approach to the development and presentation of world class business strategy. London: Palgrave Macmillan.

Gorchels, L. (2003). The product manager’s field guide: practical tools, exercises, and resources for improved product management. Ontario, Canada: McGraw-Hill Professional.

Goyal, A. and Goyal.M. (2010). Business Environment. New Delhi: FK Publications.

Grünig, R. (2010). Process-based Strategic Planning. New York: Springer.

Jain, TR et all (2009).Business Environment. VK Publications.: New Delhi.

Kurtz, David L. (2009). Contemporary Marketing. New York: Cengage Learning.

Paul. (2006). Business Environment. Ontario, Canada: McGraw-Hill Education.

Roger, J. (1999). Business and work in the information society: new technologies and applications. Amsterdam: IOS Press.

Thompson, A. and Strickland, A. J. (1997). Crafting and implementing strategy: text & selected readings. Chicago: Irwin.

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IvyPanda. (2019, May 7). Amazon Company's Environmental Scan. Retrieved from https://ivypanda.com/essays/amazon-com/

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"Amazon Company's Environmental Scan." IvyPanda, 7 May 2019, ivypanda.com/essays/amazon-com/.

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IvyPanda. "Amazon Company's Environmental Scan." May 7, 2019. https://ivypanda.com/essays/amazon-com/.

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IvyPanda. 2019. "Amazon Company's Environmental Scan." May 7, 2019. https://ivypanda.com/essays/amazon-com/.

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IvyPanda. (2019) 'Amazon Company's Environmental Scan'. 7 May.

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