Background
Amazon is one of the most influential and powerful corporations globally. It is an e-commerce and cloud computing company headquartered in Seattle. Moreover, it is the most prominent Internet retailer in terms of revenue and market capitalization. The company was founded in 1994 as a bookstore; however, after years of successful development, it successfully diversified its offerings and became one of the most influential players in the market (Ives et al., 2019). A high level of innovativeness, technological development, and creativity characterizes the company. Many Amazon solutions have resulted in a radical change in the market, helping it preserve its competitive advantage.
However, it currently faces a specific business problem related to the introduction of new technology. Amazon Go is a convenience store designed for buying products with minimal contact with shop assistants. The only requirement is a credit card and a smartphone with the specific application (Ives et al., 2019).
However, regardless of the advantageous nature of the decision, a high risk of disruption emerges. First, cashless solutions are not suitable for those without credit cards. Second, privacy issues may arise due to scanning (Ives et al., 2019). In this way, the current business problem is the effective use of technology and how to strategically share it with retailers to maintain leading positions.
Challenges
The major challenges in utilizing the technology and reaping its benefits are linked to the peculiarities of its use. First, Amazon Go has unresolved privacy concerns, as the innovation requires controlling all individuals, their actions, and purchases. Furthermore, the option does not apply to those who do not use credit cards for payments. Finally, Amazon remains uncertain whether it can use it by itself or share it with partners (Ives et al., 2019).
The organization has experience in employing disruptive technology to gain a competitive advantage. The opening of Amazon Go demonstrates that the corporation can utilize this technology to enhance its presence in the retail market (Ives et al., 2019). Moreover, the competition from AiFi requires the company to perform some actions. It means that Amazon plans to make its own technology available more quickly and open its stores to attract a specific category of clients. Additionally, it can be shared with other retailers when the advantage is acquired.
Change Management
The company’s evolution demonstrates the effectiveness of the change management approaches employed by its CEOs. Implementing organizational change requires a focus on culture, vision, and mission (Phillips & Klein, 2023). Founded as a book-selling company, Amazon managed to grow by introducing new ideas and a visionary approach, which laid the groundwork for its successful transformation. Second, the case evidences that the corporation employs a disruptive change model, radically reconsidering the existing approaches. Disruptive innovations in dynamic environments might help to generate a competitive advantage and acquire additional benefits (Chemma, 2021).
Amazon has already launched numerous incentives that contributed to the change in thinking and methods employed by other companies. Additionally, the focus on innovativeness and creativity is another important aspect of change management (Cameron & Green, 2019). In this way, Amazon’s approaches to change involve creating unique offerings that are not typical for the market and making them attractive to the target audience. Later, it can be shared with parties interested in using these approaches, which makes Amazon one of the leaders in the sphere.
Recommendations
Analyzing Amazon’s case, several recommendations can be given to attain better outcomes. Thus, the change process creates time pressure, which is especially relevant in disruptive contexts (Manisaligil et al., 2023). It means the company introducing a new solution should be ready to exploit it immediately; otherwise, the risk of substitution and similar offerings increases. In this case, AiFi has the same technology, which could be more promising in the future.
For this reason, for Amazon, it is crucial to take steps as soon as the technology becomes publicly known. It means that the corporation should license its retailing technology and, at the same time, open its own stores, such as Amazon Go. It would help to preserve the competitive advantage and, at the same time, continue testing the approach to ensure its continuous development. Furthermore, solutions for buyers without cards should be created, as this will help include a significant segment of clients. The given approach is crucial for Amazon to maintain its leading position.
Conclusion
Altogether, Amazon’s case shows the importance of effective change and disruption management. The corporation’s ability to benefit from its unique approach depends on how it can be integrated into the existing market and whether the challenges can be resolved. That is why the need for a clear vision and strategy is the central takeaway. Unusual solutions should be considered in light of the context and existing demand.
For this reason, it is crucial to analyze the market to determine whether substitutes are present and could threaten the current position. Finally, companies should realize that disruption might also lead to the emergence of new problematic issues, meaning that it should be used carefully.
References
Cameron, E., & Green, M. (2019). Making sense of change management (5th ed.). Kogan Page.
Chemma, N. (2021). Disruptive innovation in a dynamic environment: A winning strategy? An illustration through the analysis of the yoghurt industry in Algeria. Journal of Innovation and Entrepreneurship, 10(34).
Ives, B., Cossick, K., & Adams, D. (2019). Amazon Go: Disrupting retail? Journal of Information Technology Teaching Cases, 9(1), 2–12.
Manisaligil, A., A., Golgeci, I., Bakker, A., Aysan, A., Babacan, M., & Gur, N. (2023). Understanding change in disruptive contexts: The role of the time paradox and locus of control. Journal of Business Research, 156, 113491.
Phillips, J., & Klein, J.D. (2023). Change management: From theory to practice. TechTrends,67, 189–197.