Research proposal and paper
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SampleHIGHPRODUCTIONCOSTINAMAZON-Spring2020.pptxHigh production cost IN amazon
John Doe
University of XXX
Dr. ABC
April 11, 2020
Introduction
Product development is a process where the company creates a new product which will either add to a product that is already extant in the market or occupy an independent market niche or when the company modifies or update a product that is already extant.
New products are essentially critical for the viability of a company, in the sense that if a company does not come up with new products then, there is a greater chance that they will die.
In that respect, this discourse shall address the problem that is related with the high costs of development of products as well as the high IT costs.
Brief company background
Amazon.com, Inc. is a company that engages in providing retail shopping services online.
The headquarters of the company are in Seattle, WA and it was funded by Jeffrey Bezos in 1994.
The business segments that it operates in include North America, International and Amazon Web Services (AWS).
Business problems
The amount spent on research and development by Amazon by the close of 2018, was about 22.6 Billion U. S dollars.
In the digital arena, companies compete on maximizing spending on research and development. It is the perception of such companies, Amazon included that much spending in these field is associated with success of the innovation after the research and the development.
The problem arises from the fact that Amazon spends much of the R&D expenses on obtaining these services, consulting as well as modification and integration of costs in order for its operation to be continuous. Additionally, Amazon scouts for talent teams and the costs of acquiring these teams also augment the expenses of the company.
High level solution
Digital companies like Amazon, consider high Research and development costs as a representation of innovation, which is not always the case.
Noting that these costs affect the profitability of the company, there is a need for a long-lasting solution that will address the issue of high costs of research and development as well as the high costs of Information Technology.
This is the process of incessantly reviewing the process of development of products and identifying areas within the process map which can be done away with or improved.
Benefits of Solving the problem
There are many benefits that will arise from implementing the solution in a bid to solve the problem.
Firstly, lowering the costs will provide the company with the flexibility of price control, which may win new businesses for the company or increase the profit margins of the company.
Secondly, lowering the costs of Information technology will ensure a fast production time.
Lastly, building on the first benefit of lowering costs subject to exploitation of already existing research, will provide the company with better development of products as well as improved products.
Business APPROACH
The lean improvement will be able to achieve two critical things which are imperative for cutting down the costs of production as well as the costs of Information technology.
Firstly, through sieving the process of production, the company will be able to cut down on the cycle time.
Using the lean process improvement will ensure that the company retains only the manpower whose work cannot be done by other people, this will reduce the headcount and consequently reduce the R&D costs.
Business process changes
Several process changes shall be implemented with the implementation of this solution.
Firstly, there is the redesigning of the product development process.
Secondly, there will be a simplification of the product development process.
These process changes will ensure that the cycle time of product development is reduced greatly and consequently, all the benefits of a reduced production cycle time shall follow.
Business practice used to Augment The change
Various business practices will be used to amplify this change.
They Include :-
Goal Setting
Monitoring of Results
Implementation of Corrective action.
Conclusion and Recommendations
Most digital companies believe that spending much on research and development translates to higher innovation.
This perception is not entirely true as the opposite is true.
Amazon Company should, therefore, identify within its budgetary expenditures under the research and development costs on the spending which can be improved or done away with without affecting negatively the production cycle time or otherwise impeding the success of the products with regard to sales and marketing.
References
Amazon FBA - A Beginner’s Guide to Selling on Amazon, Launch Private Label Products, and Earn Passive Income While You Sleep. (n.d.). (n.p.): Adidas Wilson .
Jameson, G. (2014). Amazon's Dirty Little Secrets: How to Use the Power of Others to Market and Sell for You. United States: Morgan James Publishing.
Cohen, S. (2009). Amazon Income: How Anyone of Any Age, Location, And/Or Background Can Build a Highly Profitable Online Business with Amazon. United States: Atlantic Publishing Group.
Pissano, G. P., & Wheelwright, S. C. (2014, August 1). The New Logic of High-Tech R&D. Retrieved February 5, 2020, from https://hbr.org/1995/09/the-new-logic-of-high-tech-rd
Hannigan, T. J., Mudambi, R., & Swift, T. (2017, December 6). Sometimes Cutting R&D Spending Can Yield More Innovation. Retrieved February 5, 2020, from https://hbr.org/2015/01/sometimes-cutting-rd-spending-can-yield-more-innovation
