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Amazon .Com
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Introduction
Amazon.com is the largest e-company in the United States that offers a range of products and services through e-commerce and its website. Their main products include media, electronics and merchandise. Their company vision is to provide various products to consumers in an easy manner that is e-commerce (Amazon.com Store Support Group). The company's value has continually increased from year to year as it has grown, with their profits substantially increasing as well (Bauer 67). Today, Amazon.com operates approximately 1,404 online websites in North America with more than 50,000 employees (Amazon.com Store Support Group). Amazon .com's top three direct competitors are Best Buy, EBay and Netflix, but they have created a market niche by providing many appealing services for consumers, which helps them stand out from their competition.
Based on their mission statement, Amazon.com presents itself as a company dedicated to improving their customer's lives through quality online services. Amazon .com's dedication to their customers is shown through their partnership with different media, electronics and merchandising companies (Amazon.com Store Support Group). To help understand how
Amazon.com has reached the point it is at today after 28 years of growth and serving communities across North America (Bauer 69). This report will discuss the history, leadership, globalization, ethics, sustainability, and financial analysis of Amazon.com, Inc.
History and Founding of the Company
Incorporated by Jeff Bezos in July 5th 1994, Amazon.com was originally known as Cadabra. The name however was changed a year later due to frequent mispronunciation and the fact that one of the lawyers of the company misheard the name. In 1994 the name was changed to Amazon.com and the company went public on the stock market in 1995 (Amazon.com Store Support Group). By 1998, they were operating more than 800 stores, including online websites and online pages (Bausch 56). Amazon.com decided to change the emphasis of their name from 'mart' to `Smart' in 2004, therefore changing the capitalization of letters in the name from Amazon.com to Amazon.com and bringing more attention to the company's smart solutions to consumer needs. (Amazon.com Store Support Group). Then, in 2012, Amazon.com launched their corporate philanthropy program, Amazon.com Gives Back, which focuses on enriching people's lives through the power of online purchasing (Amazon.com Store Support Group). Their latest endeavor was acquiring the online subscription service in 2014 (Amazon.com Store Support Group).
Amazon .Com was initially an online bookstore that also dealt in selling of DVDs and video as well as video games and soft wares. In need of a more seasoned leader, Samuel J. Parker was brought on as CEO (Reference for Business). Under Bezos's experienced guidance, Amazon.com quickly blossomed and grew into one of the most successful retailers in the nation (Bausch 67). After taking the company public in 1993 and leading Amazon.com through a series of acquisitions, Samuel Parker retired from the position of CEO, staying on as a chairman and naming Jeff Bezos the next CEO of Amazon.com in 1995 (Reference for Business). Hansen left the firm in 1997 after the company experienced financial problems and Bezos returned as CEO until now.
Present Leadership of the Company
Currently, a brand new management team is leading Amazon.com. New CEO Jeff Bezos has 25 years of retail experience and most recently served as CEO of Collective Brands, Inc., the owner of Payless ShoeSource (Phoenix Business Wire). Michael earned his Bachelor of Arts in History and French from Indiana University and his Doctor of Law from Washington University School of Law in St. Louis (Amazon.com Store Support Group). Other chiefs of the company include: Carrie Teffner, CFO, Michael Goodwin, CIO, and Brock Weatherup, CDO (Amazon.com Store Support Group). Carrie TefFner, who has been CFO since June 2013, has more than 20 years of experience, formerly serving as CFO for Weber-Stephen Products LLC, The Timberland Company, Sara Lee International Household and Body Care, and Sara Lee Foodservice (Amazon.com Store Support Group). Michael Goodwin, who has been the CIO since June 2014, has over 20 years of information technology experience, most recently serving as CIO of Technology and Business Enactment at Hallmark (Amazon.com Store Support Group). He earned a bachelor's degree in computer science from the U.S. Military Academy in West Point, N.Y., and his MBA from the University of Kansas (Amazon.com Store Support Group}. Brock Weatherup joined Amazon.com as CDO in September 2014 after Pet360, Inc., was acquired by Amazon.com (Amazon.com Store Support Group). He was CEO of Pet360, the leading consumer engagement, digital media, and subscription Commerce Company in the industry, and earned a bachelor's degree in Marketing from the University of Colorado (Amazon.com Store Support Group).
Globalization of the Company
Amazon.com operates in two main segments which are North America and the global world. For globalization, they focus their operations through international websites in which they offer various online services to individuals all over the globe. Their international market further focusses on digital content subscriptions and they also engage in exporting sales to consumers outside North America and all over the globe (Miller 78). Amazon.com has chosen to expand beyond North America, but with its retail website, Amazon.com.com, in addition to its 1,404 storefronts, their thousands of products are able to reach millions of residents in the United States, Canada, and Puerto Rico.
Sustainability of the Company
One of the most common definitions of sustainability is to "meet the needs of the present without compromising the ability of future generations to meet their own needs." (Amazon.com). Amazon.com published a sustainability report under the leadership of Bob Moran, which explains in detail their sustainability program which began in 2011. Their “Think Twice" sustainability program was created to illuminate, inspire, and involve associates in environmental sustainability (Amazon.com). It includes four main components of sustainability:
l. Cultural, Economic, Environmental, and Social Sustainability
Cultural sustainability focuses on the intangible qualities of the individual employees of
Amazon.com that define the company, including race, age, gender, and language, culture, ideas and life experience (Amazon.com). The unique perspectives and qualities brought by the diverse staff make Amazon.com a stronger, better-rounded company (Amazon.com). Economic sustainability encompasses their belief in "doing the right things to delight our customers, improves store productivity, drive differentiation and consistently promote shareholder value" (Amazon.com). Environmental sustainability is their goal to create simple, informative and engaging ways to consider the environment in everything they do (Amazon.com). Finally, social sustainability is about creating positive impacts in the communities where they operate, through Amazon.com Charities, various adoption partners, the United Way, and volunteering (Amazon.com).
Ethics Issues Facing the Company
There are a number of ethical issues that have faced Amazon.com over the years. The major business ethic that has troubled the company is the idea that Amazon.com pays employees to quit their jobs in the company as a move to reduce their workforce. They do this in order to determine which employees are not satisfied with the position that they have and then fire them from the company (Mueller 78). The CEO Jeff Bezos argues that employees who stay where they are not properly motivated to do their work are unhealthy and non-profitable for the organization since the employees will not be productive. He therefore says that the paying of employees to quit is just a move to ensure that they get the best suited candidates for their jobs.
The organization has however been faulted with this move of paying employees to quit with many renowned institutions arguing that the company should be in a position to create a healthy and sustainable environment where the employees are happy to work in. The move to pay the employees to quit is just an escape route for the company as they do not want to take responsibility for their company and the existing conditions (Mueller 98). Paying them to quit also shows that the organization does not value their employees and their input to the company and this move does not help in cultivation improvement and self as well as mutual respect culture. Some people however argue that it is a smart move as this will help save the company money that would have otherwise been paid to the employees as very expensive severance packages.
Financial Analysis
The results of the Z-Score calculation for 2014 and 2013 are well above the minimum requirements of the safe zone which is 3.79. Their sales revenue and operating income have also risen tremendously throughout the last few years. Back in 2013, investors were very interested in Amazon.com stock, bidding up the price to more than double what it was in 2010 (Oursler}. This peaked interest could be due in part to Amazon. Com’s fairly strong current ratio for the year ended 2014, as shown in the attached financial model (Mueller 78). The ratios of Amazon.com were decent compared to their competitors, making Amazon.com a very and sure safe investment.
As large companies including EBay compete with Amazon.com for online retail space, its’s income has remained relatively flat (Financier Worldwide Magazine}. The company expects similar sales figures in 2015 but plans to introduce a large strategic overhaul including cost cutting measures which will generate synergies of up to $200 million (Financier Worldwide Magazine}.The various measures that are cost cutting that they introduce on a daily basis are excellent in the implementation of Amazon.com strategic plan to capitalize on our opportunities for growth and meet the needs consumers (Financier Worldwide Magazine).
Conclusion
According to most analysts, Amazon.com stock is a good investment. The Street Ratings team rated Amazon.com as an A as of December 2014 (Fukushima). With their earnings per share improvement and continuous growth in revenues, Amazon .com's numbers show it has been able to withstand the various economic fluctuations that have occurred throughout their 21 years of business. Due to the nature of Amazon .com's business focus on retail sales which include media, electronics and merchandise, the demand for their products and services is fairly inelastic and less affected by consumer spending trends (Yoon) Amazon.com has been increasing their online retail presence as well, adding real-time inventory availability information for various products to their website so customers can determine if a specific item is available at their stores (Yoon). By continually looking for new ways to grow and bring more customers through their doors, Amazon.com should continue to succeed in the competitive world of online supply retailers.
Works Cited
Bauer, Stefan. Getting Started with Amazon Redshift. Packt Publishing, 2013. Print.
Bausch, Paul. Amazon Hacks. Sebastopol: O'Reilly, 2003. Print.
Miller, Michael. Selling Online 2.0: Migrating from Ebay to Amazon, Craigslist, and Your Own E-Commerce Website. Indianapolis: Que, 2009. Print.
Mueller, John. Mining Amazon Web Services: Building Applications with the Amazon Api. San Francisco: Sybex, 2004. Print.
Sherman, Josepha. Jeff Bezos: King of Amazon. Brookfield: Twenty-First Century Books, 2001. Print.
Spector, Robert. Amazon.com: Get Big Fast. New York: HarperBusiness, 2000. Print.
Stone, Brad. The Everything Store: Jeff Bezos and the Age of Amazon. N.p., 2013. Print.
