Help with Essay in MGMT

17 November 2016

Jeff Bezos, CEO of Amazon, runs the company as a low-margin business; barely making a profit off of the items it sells. In fact, Amazon does not make a profit every quarter, but they have convinced shareholders that Amazon is taking the right approach. Brad Stone, an author of The Everything Store, a book written on Bezos and Amazon, writes, "The long-term mission for Bezos is to build the biggest retailer in the world and maybe the most major company." It is because of this mission that Bezos says it is a fair trade to take company losses now to secure its long-term future. (Rushton, 2014).

Their management team must be quick to learn and move forward fast with appropriate changes in the market such as price, new product availability, etc. Amazon's leadership team is valuable and desirable because of the people already involved. Jeff Bezos has a reputation to succeed, and therefore "everybody invested in Amazon is also invested in the peer group of this ecosystem" (Shaughnessy, 2012). By placing successful people into leadership roles, it will only attract more successful people to the company to further its growth.

Although the mission statement has been celebrated for its consistent practice, it could be improved to encompass better what specifically the company does. The company doesn't mention its products, technology, concern for survival, self-concept, concern for public image and employees in its mission statement. It also provides little information for firm's stakeholders of what is the company's ‘reason for being in business. Amazon also uses this mission as a vision statement, making it even less valuable as a communication tool. Besides, the company makes no mention of the values in the statement or somewhere else on their website. It is left up to the consumer to interpret the words of the CEO to understand clearly what the direction of the firm is.

Although Amazon.com has internal strengths that benefit them, there are many weaknesses as well. There is the sentiment that Amazon.com is trying to diversify itself so much that they do not have a clear direction. As more products are being offered online, Amazon runs the risk of offering new categories that hurt their brand. We understand from the mission statement that the company's focus is primarily customers. However, it does not distinguish what business or industry they are focused on bringing to the customers. Amazon.com also offers free shipping on many of their products, and it could jeopardize their position and financial outcome during slower economic periods. Lack of diversity on Amazon.com includes not having different language versions of their website which hurts their global expansion success.

It needs to concentrate on their competition and determine how they can overcome their weaknesses. Amazon.com can further their e-commerce by making a concerted effort in expanding to every country throughout the world. As society progresses towards technology oriented living, Amazon needs to have an online presence in all countries with access. They can also expand and further improve their automated distribution centers as a part of their global mission to increase their efficiency and customer satisfaction.

As for Amazon's weaknesses, they need to create a multi-lingual version of Amazon.com and study the market demographics to ensure they understand who to market what products to and avoid products that aren't going to sell. Next, to improve Amazon's opportunities, they need to make their brand more appealing and internationally recognizable. Amazon.com needs to try and establish partnerships with software companies that can utilize their coding capabilities to bolster their network security and improve their user interface. They also should run periodic specials to compete with the brick-and-mortar stores as well as the other e-retail competition. Finally, they should work to drive down the cost of the products. Their significant competitive disadvantage is the enormous transportation costs they incur from getting their products delivered. These values result in Amazon financing the majority of its actions through debt and having a high debt-to-equity ratio. Amazon should look to establish partnerships with UPS, FedEx or the USPS to take advantage of their efficient and cost effective shipping methods.

Amazon needs to continue to be innovative and continue to push the industry into the cloud-computing era. For Amazon to continue to drive revenues up, they should work on more deals with large retail stores to use Amazon's software for their websites. Amazon should also continue to strive to gain more local manufacturers or stores to use them for their product sales.

Referenes

Shaughnessy, H. (2012, April 29). Why Amazon Succeeds. Retrieved November 30, 2014, Forbes Magazine: http://www.forbes.com/sites/haydnshaughnessy/2012/04/29/why-amazon-succeeds/

Rushton, K. (2014, January 11). Will Amazon evolve into the biggest retailer in the world? Retrieved November 30, 2014, from The Telegraph: http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/10564752/Will-Amazon-evolve-into-the-biggest-retailer-in-the-world.html