Question

Case 4: Amazon-Keeping the Fire Hot, p. C-5

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Case 4 Amazon—Keeping the Fire Hot

Amazon, the number 1 e-tailer in the world, keeps introducing and upgrading its products and services.

Amazon's focus on innovation has continued to push the envelope in the home automation—or smart home—space. Products such as the voice-enabled Amazon Tap have fundamentally changed the way that customers interact with and purchase content from a variety of providers falling under the shadow of the Amazon umbrella.

Decision Making and Innovation

From its modest beginning in Jeff Bezos's garage in 1995, Amazon has grown into the most megalithic online retailer. Amazon is constantly striving for innovation to integrate its products and services into customers' everyday, at-home experience. Alexa is a great example of this. Billed as a “personal assistant” that gets smarter and smarter—more synced with users—Alexa lives inside the Amazon Echo. It can perform a wide range of services, including changing thermostat settings or the television channel and going online to Amazon.com and buying products!

Despite Amazon's relentless focus on innovation, there is no shortage of competition. Amazon has squared off against Netflix, Apple, and Google in hardware and digital entertainment. It bought top-shelf audio book vendor Audible.com and later added shoe and clothing merchant Zappos.com. Then came acquisition of Boston-based Kiva Systems. Kiva's automated guided robots deliver product to workers at pick stations, allowing Amazon increased efficiency (and reduced labor costs) in its worldwide distribution centers.

Bezos as a Decision Maker

Rather than sticking to just the analytical step-by-step process, Bezos uses creativity, flexibility, and spontaneity when making key decisions. He seems comfortable with abstraction and lack of structure and also isn't afraid to fail.

Seeming not to worry about current earnings per share, Bezos keeps investing to make his company stronger and harder to catch. Its millions of square feet of distribution fulfillment space keep growing domestically and around the globe. In fact, Amazon didn't actually make a profit until the second fiscal quarter of 2015, a relatively small profit of $92 million, given the size of the company. However, in the second fiscal quarter of 2016, the e-tailing giant posted a profit of $857 million, with an annual increase in sales of 31%!

Even as Amazon's stock values fluctuate, Bezos still believes that customer service, not the stock ticker, defines the Amazon experience. “I think one of the things people don't understand is we can build more shareholder value by lowering product prices than we can by trying to raise margins,” he says. “It's a more patient approach, but we think it leads to a stronger, healthier company. It also serves customers much, much better.”

What's Next?

Amazon has quickly—not quietly—grown from a home operation into a global e-commerce giant. By forging alliances to ensure he has what customers want and making astute purchases, Jeff Bezos has made Amazon the go-to brand for online shopping. After its significant investments in new media, services, and distribution, does the company risk losing its original appeal? Will customers continue to flock to Amazon, making it the go-to company for their each and every need?

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Case Analysis Questions

(marketing 1311)

Answer 1

The company does not have risk of loosing it's original appeal as it still focusing on innovations to improve customer satisfaction. It concentrates to improve customer experience and guarantees best services to it's clients. Also, by making changes in it's marketing strategies, it is continuously attracting new customers. Amazon is a brand which everyone relies on for several reasons such as on-time delivery, cash-back services, return policies, guaranteed quality by means of rating, best prices, introductory and festival-based offers. Also, one can purchase anything and everything from Amazon from apparel to furniture to groceries to electronic items and so on. Everything is available on Amazon. Thus it has become a one-stop solution to customers. Hence, it's popularity will keep on increasing with time and so will it's market reach.