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Amazon.com has merely invaded the market and reached every family in the globe. Its activity has a direct influence on the U.S. economy, impacting both investments and job opportunities. Currently, the enterprise is aiming to expand its presence and looks to open the second headquarters in one of the U.S. cities. The purpose of this research is to study the giant’s present situation, discuss the applied strategies, and make forecasts regarding its future.
It is known that the corporation has the largest market value among all online stores and continues to invest in technologies that assist it with expanding business assets (Columbus). One can assume that in the upcoming years the company will merge with a part of small businesses creating even stronger completion to the rest of the market players.
Amazon’s Current Situation
At present, Amazon is a global e-commerce giant with the greatest market value in the world. Among all groups of products that the company has in stock, the highest revenues come from electronics. In 2017, the mentioned category of wares brought the corporation an estimated $8.5 billion in sales (Columbus). This year, the retailer announced a multi-year partnership with Best Buy, which involves the launch of HD Fire TV Edition model variations from Toshiba and Insignia (Columbus).
Currently, the company operates in the three major dimensions: Amazon Prime, Amazon Marketplace, and Amazon Web Services. Amazon Prime represents the subdivision that is known to every consumer. It covers e-commerce activities, customer communication, product description, and after-sale services. Amazon Web Services introduces a specially designed computing platform for developers, while Amazon Marketplace offers web hosting for third-party sellers.
Regarding the size of the company, the retailer employs an extended number of workers. By October 2018 the employee count has reached 575,000, which includes both part-time and full-time hires (Columbus). Hiring contractual workers helps the corporation to keep its expenses in constant check. Market researchers, however, admit that with the rapid growth the company demonstrates, Amazon seriously affects other retailers forcing them to cut back on wages and strictly limit workplaces (Columbus). Thus, regardless of how favorable the situation within the firm is, Amazon’s impact on the overall unemployment rate is not always positive.
When discussing the company’s financial portfolio, one needs to operate with both income and investment statistics. At the end of 2017 Amazon’s annual returns showed $22.28 billion in cash equivalents (Columbus). The enterprise also had $737 million of equity investments in private and public organizations (Columbus). The given statistics relate to the fact that the corporation not only focuses on consumers’ satisfaction but pays attention to the importance of aiding smaller businesses.
By allowing third-party sellers to list their products on the site, Amazon creates favorable conditions for attracting new customers. Columbus stresses that 900,000 people have been employed owing to the company’s platform for entrepreneurs. It is known that the enterprise is currently in search of a city, which would be the home for its second headquarters. With regards to this fact, one may conclude that additional job opportunities will soon be created granting a chance for new talents to disclose their full potential. However, the number of jobs and average wages depend on the tax regulations applied to the state where the city is located.
At the moment, the company utilizes some strategies to attract new customers and increase its revenues. One of these strategies is focused on the “hunt for underserved market areas with high transaction volumes and undifferentiated channels that deliver margin growth” (Columbus). While the rest of the corporations adhere to the policy of defending acquired territories, Amazon attempts to conquer free zones and expand sales outlets.
The given approach allows the enterprise to go beyond the existing model of business and consolidate with the formidable market players. Each time such an opportunity arrives the company refers to its second strategy aimed at integration and combination of assets. Acquiring C.H. Robinson, for example, would allow Amazon to scale up its third-party logistics services and enter new market areas (Columbus). The fact that C.H. Robinson is advanced in using cloud-based applications only makes the idea of consolidation more attractive.
Another strategic model is linked to learning and exploiting AI technologies. The corporation makes focuses on developing and further use of virtual assistants that would help consumers to immediately resolve the occurring issues and thus, allow the e-shop to reduce the number of complaints (Columbus). Amazon is also seeking to provide its programming community with the basic AI tools to strengthen its contribution to the company’s market growth.
Successful implementation of virtual intelligence would lead to much lower operational costs and additional income from the raised number of platform users. As referred to the customer communication, the retailer works on expanding the available Alexa voice services. Recent company reports have shown that options integrated into the Amazon Echo stimulate customers to order more goods. With regards to this fact, adding new functions to a machine interface is a correct strategic decision that might raise the volume of sales. By optimizing the product search, the enterprise demonstrates its intention to continue conquering the market.
The vision of the Company’s Future
The company’s future is tightly linked to improving logistics and making shipping fast and convenient. Amazon has recently unveiled the concept of creating flying warehouses that are operated remotely and accommodate drones capable of delivering packages to the ground (Columbus). This airship would remain at high altitudes and would be regularly refueled by an aircraft. At the moment, the enterprise is working on the enhancement of its robots and adapting them to air conditions. Market researchers admit that the introduction of drone delivery would be a considerable step into the future.
Regarding Amazon’s financial situation, economists already make forecasts for the next 10 years. If the corporation manages to keep a yearly growth rate at 20% during the outlined period, it can raise its revenues to $1 trillion by 2027 (Columbus). The mentioned goal is much easier to achieve if the company’s intentions are supported by a cost-effective price policy. Lowering prices, in this case, could seriously assist with the task.
Amazon is a global giant, which disposes of extensive resources and has strictly defined strategies to successfully compete on the market and conquer new territories. A favorable economic situation within the company allows the enterprise to think of opening the second headquarters and creating additional jobs. Also, a clear vision of the future contributes to the corporation’s faster development and leads to the introduction of revolutionary services in the upcoming years. The given advantages stimulate returning consumers to order goods on a more frequent basis.
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Columbus, Louis. “5 Acquisitions that Will Fuel Amazon’s Next Growth Phase.” Forbes. 2018. Web.