The global financial crisis has become one of the greatest influencers on the financial performance of Amazon, as the selling of products is directly related to the clients’ purchasing power. When customers experience financial problems, the company has a decrease in sales and the annual statement for the year fluctuates. According to the financial statement produced in 2008 with the analyses of 2007, the global financial crisis of 2007-2008 caused massive losses in the number of customers and a decrease in the average selling price. Moreover, the changes in the exchange rate caused a twice increase in operating expenses in 2007. The same problem occurred when Amazon was close to the sales recovery, but COVID-19 happened. The recovery process continues these days, and workers are implementing more strategies to return to the previous level of sales before the crisis.
Marketing and the wise spread of finances helped the company to survive in the fast-changing economy. The improvement process is seen in the property statement. Even with the decrease in sales, Amazon continued expanding the number of properties and locations around the world. Based on the data provided in 2008, the company had 15,837 square footage (in thousands) of different properties like office facilities, warehouses, and customer service offices. In 2021 the situation significantly improved, and the company opened more physical stores, which increased the square footage to 570,560. The transaction was smooth and slow as Amazon understands all risks at every step of performance improvement.
Amazon constantly meets financial risks, and they are clearly described in the annual statement to show what techniques were used to eliminate the negative influence of potential problems. In 2007 the most common issues appeared in the money market when Amazon started to pay more attention to the digital aspect of their business (Amazon, 2022). The company was one of many who switched all operations to the official website, and new competitors appeared. To hedge the exchange exposure, Amazon introduced easy and fast online shopping and was not aiming to beat high-performing organizations but to become the best among small companies (Amazon, 2008). The expansion of physical operations and introduction of new products related to technology, like Prime Video, allowed Amazon to become one of the greatest organizations well-known worldwide (Amazon, 2022). The changes in the. There was a change in the stock market as strong communication was built between the company and existing customers. The popularity of investments has increased, and Amazon has been showing stable growth from the period between 2007 and 2021, even during the financial crisis.
With the switch to digital technologies, the company started to record all financial data and networks related to the business. This strategy helped to avoid issues in the international market segment, as every country has specific development plans, and the time spent on changes can vary (Amazon, 2008). By analyzing data on internet use in different countries and exchange rate fluctuation, Amazon built more specific approaches to financial support and further growth.
The company’s ethical aspect is one of the most stable as they employ people from around the world and deliver products to people of different nationalities. In 2007 it became important for Amazon to improve ethical communication with suppliers as, during the financial crisis, their help could help to survive (Amazon, 2008). Moreover, legal rule following stayed important due to increased government investigations. By 2021, the business achieved this goal and became one of the best in providing customer service.
To avoid financial problems in the future, similar to the crisis in 2007-2008, Amazon started to control the timing and merchandising. Stability in internal operations can improve the quality of external work in communication with the connected parties. The collection of data and relevant information should continue operating as more specific strategies may appear to ensure the company’s growth.
References
Amazon (2008). Annual report. Web.
Amazon (2022). Annual report. Web.