Amazon is a multinational company with its headquarters in Seattle, Washington. The company was started by Jeff Bezos in the year 1974 as an online marketplace for books but later expanded to sell other products such as electronics, video games, software, furniture, food, jewelry, and others. It is one of the most valuable companies globally and has become the second-largest private employer in the USA (Yang, 2019).
The company is well known for being the largest online marketplace for books, furniture, and others. It is also famous for providing technology-based services such as cloud computing, live streaming services, and artificial intelligence assistant provider. It can provide all these services since it has a well-established technology and innovation industries under its supply chain and brand. Amazon has been rated the largest internet revenue globally, overtaking companies such as Facebook, Apple, and Google. Through its features such as Amazon Music, Prime Video, Twitch, and others, the company can provide its customers with video streaming and downloads (Hanrahan, Martin, Willamowski, & Carroll, 2019).
The company also has a publishing section, film and television studio, web services such as cloud computing through Amazon Web Services and other segments. The company has been able to make this tremendous growth due to its partnership with manufacturing companies such as DC Comics and Toys R. it has also made pilot partnerships with companies such as Nike and Apple Inc. It also has able leadership with the president being Jeff Bezos, the founder of the company that gives it an upper hand in decision-making.
This report will focus on Amazon's practice and challenges, how the company mitigates the challenges and risks associated with revenue generation, minimization of liabilities, and how the company increases its efficiency in the digital marketing industry.
` The secret behind Amazon’s tremendous growth over the years has been the dedication shown by its able leadership throughout the years. The board of directors is made of the founder Jeff Bezos and ten partners who are other business owners and founders. These directors are from different fields of business and companies, which makes it reliable as ideas shared tend to cover a wide range of businesses in the market and the world (Hanrahan, Martin, Willamowski, & Carroll, 2019).
Another business practice that has made the company expand and become a force to reckon within the digital industry is partnership and business deals. It has been able to make since it began in the year 1994. These partnerships have been able to make the company remain above the competition. They have made Amazon become the largest internet revenue in the world. The company has partnerships with Nike, DC Comics, United States Postal Services, Apple Inc, Borders Group, and others.
The company has been expanding to other products such as electronics, furniture, baby clothes, software, beauty products, etc. The expansion from the online marketplace for books to other products such as food has been a major boost to revenue generation. Product diversification has been why the company has been at the top of the competition from other digital market companies. The business diversification has also boosted the brand and helped the company maintain its efficiency as one of the world's largest internet revenues. This is because maintaining an efficient brand positively impacts corporate financial performance (Wang & Sarkis, 2017).
The company also employs social media platforms to market its goods, products, and services. It is not uncommon for one to log in to any social media platforms such as Instagram, Facebook, or Twitter and find an advertisement for a product on Amazon. The company's advertisement and marketing department are working diligently, which has been the main reason many people worldwide have become aware of Amazon. This has made Amazon become a multinational company providing services and delivering its goods to all parts of the world. Social media marketing is effective for the success of any digital marketing company in the world and can influence a positive corporate or organization's financial performance (Hou, 2019).
The biggest challenges faced by Amazon Company include; keeping up with eCommerce, maintenance of international market and performance, keeping with competition from rivals, the balancing of investments and profits, and also dealing with intense government scrutiny (Bidkar, 2019). Keeping up with eCommerce in the digital market has been a great challenge to the company. This is because the company's online business that accounted for above 50% of the revenue generated has been experiencing slow growth with a rate of 10% per year. If this growth rate remains the same, it will be hard for the company to keep up with eCommerce.
The challenge of maintaining the international market and performance has become an issue that the company must carefully reconsider its marketing strategies and come up with better and efficient ones. The loss of the company to its rivals would mean the loss of the international market and a decline in the company's growth rate. This will also impact the company's corporate financial performance as a whole (Laemmel, Alon, & Vega, 2019).
Amazon Company has the challenge of keeping its rivals at bay, such as Walmart, which is working hard to take its online market. This has been the company many times to do pull back on the prices of its products and also promotions to maintain its large client base. The rival companies have been working hard to get Amazon less aggressive in the market and take advantage of it.
The making of new initiatives such as logistics, payment, and healthcare has made it hard for the company to balance investment and profits. The challenge is brought about by the investment the company keeps making on new technologies that are aggressive and can bring up big rewards, making it hard for the company to balance investments and profits.
The frequent changes in government laws and regulations on giant tech companies pose a challenge to Amazon. The company has to frequently change its procedures and protocols to fit government laws and regulations (Hanrahan, Martin, Willamowski, & Carroll, 2019).
One of the ways that the company can optimize risk is through the use of its market landscape. This is because about 72% of its customers use it as a reference platform for the price discovery of products in the market. 92% of its customers also use it to compare prices of products in the market, and 56% prefer Amazon for their purchases without checking anywhere else (Yang, 2019). The company understands this, and thus it tries its best to maintain a strong relationship with its clients. It can do all these by using some strategies such as customer centricity, which deals with the optimization of the product pages through the use of product pictures and images, description, enlisting of key features, and reviews of the products by other clients. This is a market strategy that makes the company maintain its massive clientele.
The second strategy is the Amazon Enhanced Brand Content, a tool used to optimize the product description for free. The supply chain partners mainly use this and product manufactures. It boosts sales as it enhances a richer visual experience of the product, and subscribed users can only use the tool.
The company also enables sellers to advertise on their platform through the Amazon Marketing services, and products are targeted to visitors according to customer's interests, keywords, and related products. The availability of these features and tools on the Amazon platform enables the company to remain on top of digital marketing and the world's largest internet revenue. Supporting other businesses makes the company maintain a high digital marketing platform and also be able to expand internationally.
When a company can maintain its clientele base by coming up with the best marketing strategies and policies, it can maximize profits, enabling it to make investments and expand (Dwivedi et al., 2020). This has been the case with Amazon; it has efficiently used social media marketing and made tremendous revenue generation and remain on top of the hierarchy of the digital or online-based market.
There are many advantages associated with the aggressive use of social media platforms to influence the market and consumer behavior when it comes to the digital marketing industry, and Amazon should make proper use of this. It will leave its rivals, such as Google and Walmart, at bay.
Secondly, Amazon, the number one choice digital marketing platform, should have the most intelligent information systems to collect customer behavior changes. This can be done by heavily investing in the formation of the information systems and updating the obsolete ones.
Thirdly, the company should develop strategies to help balance investments and profits to avoid making losses or the availability of unaccounted profits or investments, which might lead to misallocation of the fund. This will lead to losses and a slow growth rate. There will be no digital marketing company that can rub shoulders with the Amazon company if doing this and more.
Bidkar, S. V. (2019). Paradigm Shift in E-commerce - A Case Study of Amazon. Sumedha Journal of Management, 445-452.
Dwivedi, Y. K., Ismagilova, E., Hughes, D. L., Carlson, J., Filieri, R., Jacobson, J., . . . Rowle, J. (2020). Setting the future of digital and social media marketing research: Perspectives and research propositions. International Journal of Information Management.
Hanrahan, B. V., Martin, D., Willamowski, J., & Carroll, J. M. (2019). Investigating the Amazon Mechanical Turk Market Through Tool Design. Computer supported cooperative work, 1-20.
Hou, T. C.‐T. (2019). The relationship between corporate social responsibility and sustainable financial performance: firm‐level evidence from Taiwan. Corporate Social Responsibility and Environmental Management, 19-28.
Laemmel, J., Alon, I., & Vega, D. (2019). Alkosto faces up to Amazon in Colombia's e‐commerce market. Global Business and Organizational Excellence, 31-41.
Wang, Z., & Sarkis, J. (2017). Corporate social responsibility governance, outcomes, and financial performance. Journal of Cleaner Production, 1607-1616.
Yang, S. (2019). The Study of Customer Experience Design and Optimization of Shopping Website: Case Analysis of Amazon in China. Asian Business Research, 1.
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