Amazon’s Business Strategy

Three fundamental points form the Amazon’s business strategy. First is to be customer focused as depicted in its mission, to be innovative and expand its products and services. Lastly, to enhance its distribution channels by forming a direct link to the customers by getting rid of the middleman factor. Having a competitive advantage over its rivals is also a long-term goal (Agarwala, Katiyar, & Singh, 2015; Bluschke, 2016; Lang, Tinder, Zimmerman, & Harrison, 2012). The practices of hiring and training employees support the business strategy. The company has created an organizational culture of focusing on customer service and information dissemination. The hiring process thus selects employees with talent, based on experience in similar roles. The culture is maintained through training and constant reminders especially during company meetings. Therefore, employees become tuned to the system that Bezos created. Moreover, Amazon through its career choice program pays tuition fees for employees undertaking courses in line with Amazon’s requirements. It has also put in place strategies to cater for employee satisfaction (Agarwala et al., 2015; King, 2015; Lang et al., 2012).

Amazon follows a vertical organizational structure where there is the management team including the CEO at the top levels and employees at the lower hierarchies. The executives receive a modest salary as earnings are directed towards the shareholders. Most shareholders are company employees. A board of directors composed of nine members is also in place (Lang et al., 2012). Amazon’s organizational structure is effective because even with the levels of authority, employees who also double up as shareholders are motivated to work for their own benefit rather than taking it as a directive from the management. The top executive team enjoys stability in their positions as they have retained their titles for close to two decades now. Thomas J. Szkutak has served as the VP and CFO while Michele Wilson has been the senior VP and General Counsel (Lang et al., 2012).

The team spirit cultivated by Amazon’s leadership should be emulated. Aside from working hard and outdoing themselves to become even better performers, employees are encouraged to have fun. The management advises and assists them to overcome barriers in their day to day activities. Specifically, employees are taught to tackle a problem beginning from its roots before it escalates out of control and so many resources have to be used to solve it (King, 2015). Cultural diversity is also appreciated and accommodated with Muslim employees being given longer breaks (Boewe & Schulten, 2017). However, King, (2015) and Boewe & Schulten, (2017) highlight that the leadership is also extremely strict. In meetings, employees are afraid of airing their views and opinions because of too much criticism and this has the potential of psychological consequences. There is also too much competition among employees and departments, as they try to outdo each other (Boewe & Schulten, 2017; King, 2015). The company uses information systems to monitor all the activities of its employees electronically, therefore, marking their speed and efficiency. It also employs KIVA robots in its packaging section that can perform the tasks efficiently and swiftly (Bluschke, 2016). In 2000, workers in the UK were being paid 5 pounds/hr. and this is not so different from the current $6.50 and$8.25 per hour for day and night shifts respectively (BBC, 2013). These payments seem to tally with the rest of the competitors’ rates. Amazon plans on venturing into video content and due to its receding profitability, it may change how it uses its profits by channeling earnings to expansion projects.

References

Agarwala, A., Katiyar, V., & Singh, R. (2015). The Economist Investment Case Study Competition: Amazon vs Walmart. Emory University Goizueta Business School, 1–20.

BBC. (2013). Amazon workers face “increased risk of mental illness.” Retrieved April 16, 2018, from http://www.bbc.com/news/business-25034598

Bluschke, N. (2016). ”To E or not to Be” Amazon’s role in the retail industry. Modul Vienna University.

Boewe, J., & Schulten, J. (2017). The Long Struggle of the Amazon Employees. Rosa-Luxemburg-Stiftung. Brussels.

King, R. J. (2015). Culture Controversy at Amazon , Decoded. LinkedIn Pulse, 1–9.

Lang, S., Tinder, L., Zimmerman, J., & Harrison, J. S. (2012). Amazon .com : Offering Everything from A to Z December. University of Richmond, 1–17.