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Investigation of Amazon's structures, aims and objectives.

IMPACT OF E-COMMERCE ON A BUSINESS AND THE SOCIETY

By: Jānis, Artūras and Curtis

Global impact of e-Commerce on society

E-Commerce has become a very popular method of trading among companies over the past two decades, with many well known companies slowly embracing or outright switching to E-Commerce. E-Commerce on a whole has had a major impact on society, and has had both positive and negative impacts on business and their customers.

Advantages and Disadvantages

Switching to E-Commerce provides both businesses and their consumers with various social and economical advantages compared to operating from a retail store. One example of an advantage is a larger potential audience, as a retail website allows customers across the globe to be able to access the business and purchase products or a service from them (Caporaso, 2016). This can benefit the company as it can result in a potential increase in sales, as well as giving citizens from other countries the ability to use their service. Less man power is required to run an online store compared to retail too, so the business' wages costs will decrease, and in turn they will be able to pass the savings onto the customer (Marr, 2014). This lowers the total costs of their products or service rates, which in turn may result in more sales due to the more attractive pricing.

Another advantage of E-Commerce is that unlike most physical retail stores the company is always open for business twenty four hours a day, which benefits the general public as they are able to access the website whenever they find it convenient, rather than having to abide by the retail store's set opening and closing times. However, this can also have some disadvantages to the business, due to both the business' E-Commerce industry rivals also being open for business 24/7, thus providing no advantage, and the increased workload that the company's staff will have to endure working around the clock. An E-commerce business also generally produces less pollution, as their customers do not have to travel by vehicle to a specific store to purchase their products (accountlearning.com, 2016).

On the other hand, E-Commerce does have some disadvantages and flaws that could disrupt both their company and the general public. One example is that if the website goes down due to a server or internet error, then their customers are prevented from accessing their business (teach-ict.com, 2016). This could cost the business dearly, as each minute of downtime is costing them in potential sales, and their customers may become frustrated at their website being down and may take their business elsewhere. Another con to E-Commerce is potential Security Issues. An E-Commerce website can be a victim of attacks such as Phishing, due to their online stores storing customers personal information such as bank account details and credit card numbers. This can result in the customers information being stolen and used for malicious purposes such as credit card fraud or identity theft.

Another potential issue that an E-Commerce business can run into relates to specific countries' laws. Every country on earth has their own list of rules and regulations telling the populace what products they cannot sell and what techniques they cannot perform online, and any E-Commerce business must abide by them in order to be able to sell their products in that particular country. For example, if a company was planning to sell movies or video games through an online store, then they will have to alter the available product range for each country. Australia for example has a restricted system in place which partially or completely bans more adult products, so these products must be removed from sale in that country's store.

  • Global impact of e-Commerce on society.

  • Impact analysis of introduction of e-commerce (e-com) to Atlantis hotel, London.

Impact analysis of introduction of e-commerce (e-com) to Atlantis hotel, London.

Amazon History - Origin

Core Business Functions

IT

Amazon’s IT sector takes care of most jobs relating to their Website. Amazon’s website requires constant maintenance to make sure that it stays up to date, with product listings being constantly added, edited or removed, and that it keeps online, even one minute of downtime can cost Amazon up to $66,240 (upguard.com, 2016). Amazon’s IT sector also handles the task of upgrading the website’s hosting servers and PC’s every few years, so that they do not fall out of the times and continue being able to handle their ever expanding customer bandwidth.

Amazons’ IT sector will also perform fixes when something goes wrong with their website or other online services, such as if various coding based bugs are discovered relating to their website, or if Amazon Prime’s servers malfunction, causing the service to become unavailable to their customers. Their IT sector, like HR, also relates to their business Aim of providing the customer with everything they might need, as this aim would include supplying their customers with a selection of up to date products. Their IT staff will make sure to keep updating their Website as soon as possible when a brand new product is added to their product listing, in order to both stay ahead of their competitors and satisfy their users.

Impact:

  • Benefits on business and customer
  • Risks on business and customer

Conclusion

  • Why should business switch to e-com?

Core Business Functions

HUMAN RESOURCES

Amazon’s staff and customer service are handled by their Human Resources sector. HR take charge of going though all received job applications and hiring the best new staff for the job amongst them. They are also in charge of training new staff, making sure that they are up to standard and knowledgeable of their devices and software (amazon.jobs, 2016), as well as making sure that all their staff are currently happy with their working conditions. HR also handles Amazon customer service, replying to and taking into account any customer complaints or questions that they may receive.

Amazon's Human Resources sector relates to their business Aim of making Amazon into a company which fully satisfies their Customers and supplies them with everything they may need, and thus prioritizing them over their other stakeholders (Gregory, 2016). This function relates as the Human Resources sector is in charge of supplying reliable, high quality Customer Service, one of Amazon's various services which aim to improve their experience and fix any problem that they may be having while using their company for trade, thus prioritizing their well being over other stakeholders involved with Amazon. HR also relates to Amazon' other aim to provide more available jobs worldwide, as HR also handles the hiring of their staff.

Finance

Amazon’s Financial sector handles everything relating to their sales figures and funds. Finance performs all of Amazon’s accounting (Amazon.jobs, 2016), keeping track of what revenue they bring in each month from their website as well as income received through their other products and services, such as Amazon Prime Subscriptions and eBook sales. They also keep track of paying the bills for running costs, such as the electricity used to power their servers and PC’s, or the phone bills for their telephone services.

Amazon's Finance function is another one which relates to their business Aim of aiming to improve their total income in each financial year. Finance are not directly involved with finding ways to improve the company’s profits through sales or advertising, but they are involved with adding up and keeping track of Amazon's aforementioned total costs and profits. However, Finance may in fact find ways to further improve Amazon's profits through cutting down costs relating to their various running costs, such as changing their office lighting to low energy bulbs that use less electricity, lowering their electricity bill's total cost.

Risks

Benefits

Why should businesses switch to e-commerce?

Global business is one of such factors which involves the business being able to provide different products or a service to customers all over the world thanks to the online environment that e-commerce business uses.

In the case of Atlantis hotel the introduction of e-commerce allows for the Atlantis hotel business to provide their services through a website on the internet which can then be accessed by large amount of people across the planet creating business on global scale as supported by (Tina, 2016). An example of this benefit can be a tourist wanting to view London and wanted a place to stay. Because the Atlantis hotel had implemented to e-commerce tourist can easily find their services and books a room before arriving to London.

Because global business involves the ability to provide service globally to customer is also means that a lot more people would potentially be aware of their services and use then resulting in higher customer count and higher income.

24/7 service is a factor which benefits both the e-commerce business and its customers involving the service of the business being available to potential client at any given time as also described by (Tina, 2016).

In Atlantis Hotel's case this is no different from any other e-commerce business as all e-commerce websites must maintain their services to be always available in case of any user trying to access their services. This is beneficial to customers as it allows for their research or use of the hotels services not to be interrupted and to Atlantis hotel business as it allows for business to be done all day and night compared to the set working hours in physical hotel reception.

Online advertising is one of the effect of e-commerce businesses which offer their services and/or product online on a website. This is because of the nature of the internet where discussion about different things, such as businesses and services, are made constantly.

In case of the case scenario business of the Atlantis hotel the online advertising can manifest in many different ways such as free publicity, reviews, comparisons and other. All of these methods allow from the name of the hotel to became more well-known on some level, potentially increasing the amount of customer traffic to the Atlantis hotels website. The benefit to customer is that the online advertisement allows for people to quickly and easily find popular or a lot mentioned hotels such as Atlantis hotel.

Direct communication with customer is another beneficial impact which involves allowing for the company to communicate more directly to its customers through different methods such as email, website queries, reviews and other which is supported by (Dudavskiy, 2012) describing how communication technology has impacted customers and business relation. This allows them to gain information about their services, products and facilities which can then be used to improve upon them while also taking in customer opinions and complaints.

In case of Atlantis hotel London this impact can great beneficial impact on the services they can provide as they can gain more honest and/or criticizing information about their hotel and different elements in it such as food or rooms quality.

This is because of the reason that many people are more comfortable and inclined to generally criticize and to leave more honest review or information about hotels service as there are no direct human to human interaction.

New product and services is another beneficial impact to both business and the customer which involves the online business ability to change/update their e-commerce website quickly to notify customers of their latest services or product.

In case of Atlantis hotel this could include things such as updating information about the prices of hotel rooms, new rooms or facilities available to customer on their e-commerce website. This allows for all customers to choose the best possible option that Atlantis hotel has currently available without any invisible changes which in turn reduces the amount of complaints that otherwise could occur.

Loss of Service is one of the risk factors which can take place of introducing and using e-commerce a business if the service/website is not implemented or maintained correctly. Downtime can be very costly for any business who relies on their website for income, for some businesses such as Amazon just a minute of downtime can cost them over $66,000 a minute (UpGuard, 2016). This risk can impact a business such as Atlantis hotel quite heavily, as after moving to e-commerce they may rely on their website for a majority of their sales. However, as they will still have the ability for customers to physically enter their hotel to book a room, they may not suffer as badly as a full on e-commerce businesses would.

Security issues and legislation is another huge part of e-commerce businesses relating to keeping the personal and secure information safe and secure following the guidelines and not using the information unlawfully as described by (Tina, 2016). This is huge risk on part of business as it requires a lot of resources for a company to keep the new digital data of all the clients, service, and transaction safe and secure. In Atlantis Hotel's case they would need to make sure to keep all personal information that they receive from their customers completely secure, such as their Credit Card numbers or Bank Pins used during transactions. They would need to hire staff specialized for managing their system for any information leaks, and retain staff to better handle secure information following the guidelines using the new technology from e-commerce .

Online Competition is another potential business risk for the e-commerce business. Any business that moves into e-commerce is putting itself up against an already established group of businesses that offer the same sort of service which they do. For example, a retail business that specializes in selling clothing will be putting itself up against the likes of Amazon, Very or GAP. Because of this, an e-commerce business has to price their services fairly and smartly to prevent competition of taking their place as touched by (Tina, 2016). Because Atlantis Hotel would be moving their business online, their Hotel's pricing will become easily available to anyone researching about Hotels around the Stratford area. This will result in their business being directly compared with any rival Hotel chains, which means that they may have to start competing with them to offer the most appealing deal.

Additional Employee training is another potential disadvantage for moving a business into e-commerce. This is because moving into e-commerce requires a company to bring in new employees with specific skills that their current ones may not have, such as monitoring and replying to an online customer complaint forum, maintaining the website server or updating their product listings. It is only a potential disadvantage as it could result in the business spending a large amount of funds trying to find the correct staff for the job. In Atlantis Hotel's case, the company would have to train or hire employees for the job of maintaining their business' website, which would include maintaining their server and replying to any customer feedback forms sent to them.

• Switching to E-Commerce would allow Atlantis Hotel to become active as a business for longer work hours than before, as a Website can be up for 24/7 hours a day with little maintenance. On the other hand, having staff running the business over a phone line or their front desk will require said staff to only work for specific hours before their shift is up.

• Atlantis Hotel implementing an e-commerce website should result in them receiving a larger number of customers, as the website would allow a greater range of people to be able to easily access their business. Without a website, customers would have to book through physically entering the Hotel, which limits the customers to just people who are located in the surrounding area.

• Atlantis Hotel switching to E-Commerce would also be improving their business accessibility. If Atlantis Hotel stuck with operating through their front desk, they may be missing out on some potential sales, as some customers may wish to book a room but could be too busy or of too poor health to be able to physically do so. Being able to access Atlantis Hotel's business from home will allow these customers to easily bok a room, thus improving overall sales.

Conclusion

Atlantis Hotel deciding to switch to E-Commerce will bring a lot of benefits to the company, which will improve the way of how their business functions. Their main benefits of switching to e-commerce will include that their services will be available to be accessed 24/7, which gives the customers a greater ability to access their business and purchase a room, and thus should improve their total sales. However there are some downsides of e-commerce, such as the possibility of security issues relating to their customer's private information, as well as the potential issue of their site going down through a server error or other technical issue, of which the downtime can cost them dearly in missed sales. When taking both the advantages and disadvantages into account, the advantages outweigh the disadvantages of switching to e-commerce, so switching their business model to e-commerce is the right choice to make.

Aims

• One of the Amazon's aims is to achieve a bigger hold on the market of selling groceries, in order to expand and become even larger business able to compete with other grocery selling businesses. (Laura, 2016)

• Amazon as any other company aims to increase its income by trying to become ever large business every year in its categories.

• Amazon aims to reduce the amount of non-renewable energy they use.

• Increasing the amount of jobs available for unemployed people is one of the aims for Amazon as well.

• Providing everything that customer might need, in order to attract more customers to find product that they need, is also a big aim of Amazon.

Fin!

Questions?

Beginning

  • In 1994 Amazon was founded by Jeff Bezos and his wife from their basement in Seattle Washington US.
  • In 1995 amazon.com website was developed by Amazons 1st employee Shell Kephan.
  • The first object picked to be retailed were books.
  • Soon after Amazon started moving to ever larger facilities because of its quickly growing popularity from the launch of the website.

(Miller, 2014)

Progress

  • In 1998 Amazon expanded to UK by opening “amazon.co.uk” using bought book business “BookPages” .
  • In 1999 Amazon’s total stock market value was estimate approximately 30 billion dollars while Jeff Bezos was estimated to be worth 9 or 10 billion dollars.
  • By 2000 Amazon had already started retailing different product other than books.
  • Amazon started creating services for others. They created a service in which 3rd party sellers can use Amazon’s sites and facilities for selling their products.
  • 2001 Amazon experiences “.COM” crash and loses estimated 98% of its stock value in month's time.
  • In 2006 Amazon expands their services by creating “Amazon web services”.
  • In 2009 Amazon start developing their own devices by releasing a e-reader.
  • In 2010 Amazon created “Amazon studios” for creating original content.

(Miller, 2014), (Alpe, 2015)

MARKETING

Amazon’s Marketing sector is tasked with advertising both the Amazon brand and their products. Like most E-Commerce companies, the marketing sector handles online and TV based advertisements related to their own products such as their Kindle and Fire Tablets, but being a very user focused company they also offer many user oriented methods of advertising, such as Seller Central Advertising. This advertising method was created purely for Amazon’s third party sellers, and is essentially the item’s product listing being displayed as an advertisement, which saves the need to create a custom description. Seller Central Adverts are automatically updated, such as when a product goes out of stock it is immediately removed from display (Rekuc, 2015).

Amazon’s marketing department also specializes in Email Marketing Campaigns. Unlike most E-Commerce companies who simply send out the same duplicated promotional Emails to their users, Amazon sends each one of their users personalized promotional Emails uniquely catered to that user. These Emails are created using all of their available personal account information on that user that Amazon has access to, which can include their history of past purchases, their location and their on-site behaviour (Daly, 2014). Amazon's Marketing function relates to their business aim of continuously improving their total Income that Amazon brings in each financial year. The Marketing function relates as their successful Marketing projects will help bring in new customers that view the advertisements and are persuaded to visit and use the website for online shopping, thus helping to contribute to the total number of sales made that year and in turn improving their profit.

Amazon History - Present

Currently

  • In 2014 Amazons estimated stock value was 70 billion dollars.
  • 2016:Amazon releases an original show called “The Grand Tour”.
  • By 2016 Amazon was estimated to be employing around 230 000 people around the world. (amazon ranking, 2016)
  • In 2016 it was estimated that Amazon has over 109 ‘fulfillment centers’ and many other facilities all over the world providing services for the most of the world. (Amazon, 2016)
  • Amazon is ranked number 1 as a e-commerce retail business in sales with 82.8 billion dollars. (Wahba, 2016)

(Miller, 2014)

How Amazons business aims relate to their stakeholders

Stakeholders

A Stakeholder can be several different things such as person, business or organization, which have specific interest and/or concerns of the workings of a company or is directly or indirectly affected by its decisions. This is because the decisions that a company decide to make, such as aims and objectives of the future, can dramatically impact state and well being of a stakeholder, both positively and negatively. (stakeholder definition, 2016)

In Amazon's case they have a large variety of Stakeholders, including customers, their employees, investors, directors, suppliers, shareholders, the Government and even competing companies (in a different ways). These stakeholders are constantly affected by Amazons decisions both directly and indirectly which is why they are most often the main consideration. (O’Brien, 2015)

Objectives

• One of the objectives of Amazon is to increase its current market share of 1.1% on sales of food and beverages by 2018, so it reaches or even overtakes the current Wall-Mart market share of 17.3%.

• Amazon also plans to build a windmill farm by the end of 2017, in the hopes to provide at least 40% amount of renewable energy to use in the business.

• Another business objective for Amazon it to create 3500 new permanent job places in the United Kingdom before the end of the 2017 by opening more Amazon work/distribution facilities. (BBC, 2016)

• By the end of 2017 Amazon plants to increase it revenue by at least £20,000.

How organization's business aims relate to their stakeholders

Conclusion

In conclusion, every aim that a company such as Amazon strives to accomplish in the future can drastically influence their stakeholder goal and objectives in both positive and negative ways by possibly creating contradictions of where the company wants go and what each stakeholder wants. Companies such as Amazon have to do a balancing act of creating aims for the company’s future and satisfying (and not upsetting) their stakeholders in order to succeed successfully as a business.

In some cases, certain shareholders can also be used as the building block of the company by focusing most of their benefits towards them. This is true in Amazon's case where they base all their decisions around their customers, who they value as their most important shareholders of the company. (O’Brien, 2015)

How organization's business aims relate to their stakeholders

Work load:

Delete this slide before presentation

Task 1

  • History - Janis
  • Core Functions - Curtis
  • Aims and Objectives - Arturas
  • Evaluation of aims to the Stakeholders - Janis

Also remember to place APA references in your text work as well as copy of them in the frame bellow.

Task 2

Pros and cons of e-com to business in general - Curtis

Analysis of the scenario business

  • Pros and cons (risks and benefits) - Janis
  • Impact on consumer
  • Impact on business
  • Why should scenario business switch to e-com? - Arturas
  • Possibly include : "Industry statistics" as evidence or something IDK

APA references

References

Task 1 Ref:

Alpe, L. (2015). The history of Amazon. Retrieved from telegraph.co.uk: http://www.telegraph.co.uk/technology/amazon/11790823/The-history-of-Amazon.html

Amazon. (2016). selling internationally overview. Retrieved from services.amazon.com: https://services.amazon.com/global-selling/selling-internationally-overview.htm

amazon ranking. (2016, 5). Retrieved from forbes.com: http://www.forbes.com/companies/amazon/

Amazon startup storie. (2016). Retrieved from fundable.com: https://www.fundable.com/learn/startup-stories/amazon

Amazon's Retail Revolution Business Boomers BBC Full documentary 2014. (2014). Retrieved from youtube.com: https://www.youtube./watch?v=6UhrIEUjtwI

D'Onfro, J. (2014, 10 23). early Amazon employees. Retrieved from businessinsider.com: http://www.businessinsider.com/19-early-amazon-employees-where-are-they-now-2014-10?op=1&IR=T/#ul-davis-led-the-back-end-development-of-amazoncom-17

facts about amazon.com. (2011, 07 22). Retrieved from http://mashable.com: http://mashable.com/2011/07/22/facts-amazon-com/#hX5br4RYukq6

Amazon.jobs. (2016, September 1). Amazon.jobs. Retrieved from www.amazon.jobs: https://www.amazon.jobs/en/teams/accounting?base_query=&loc_query=&job_count=10&result_limit=10&sort=relevant&team_category%5B%5D=accounting&cache

amazon.jobs. (2016, September 1). amazon.jobs. Retrieved from amazon.jobs: https://www.amazon.jobs/en/teams/human-resources-customer-service?base_query=&loc_query=&job_count=9&result_limit=10&sort=relevant&team_category%5B%5D=human-resources-customer-service&cache

Gregory, L. (2016, July 21). Amazon.com Inc.'s Vision Statement & Mission Statement (An Analysis). Retrieved from panmore.com: http://panmore.com/amazon-com-inc-vision-statement-mission-statement-analysis

Rekuc, D. (2015, November 3). A Field Guide To Amazon Advertising. Retrieved from marketingland.com: http://marketingland.com/field-guide-amazon-advertising-149165

Daly, J. (2014, December 2). How Amazon Dominates E-Commerce With Email Marketing. Retrieved from getvero.com: http://www.getvero.com/resources/guides/the-amazon-experience/

upguard.com. (2016, September 1). The Cost of Downtime At The World's Biggest Online Retailer. Retrieved from upguard.com: https://www.upguard.com/blog/the-cost-of-downtime-at-the-worlds-biggest-online-retailer

https://aws.amazon.com/about-aws/sustainability/

Laura, G. &. (2016, October 12). amazon to expand grocery business with new convenience stores. Retrieved from www.wsj.com: http://www.wsj.com/articles/amazon-to-expand-grocery-business-with-new-convenience-stores-1476189657

BBC. (2016, July 6). news business 36730755. Retrieved from www.bbc.co.uk: http://www.bbc.co.uk/news/business-36730755

Task 2 Ref

Dudavskiy, J. (2012). Impact of communication technology on businesses. Retrieved from research-methodology.net: http://research-methodology.net/impact-of-communication-technology-on-businesses/

Tina. (2016). e-commerce advantages and disadvantages. Retrieved from enkivillage.com: http://www.enkivillage.com/e-commerce-advantages-and-disadvantages.html

Marr, K. (2014, January 21). The Effects of E-commerce on Society. Retrieved from www.kieronmarr.co.uk: http://www.kieronmarr.co.uk/scrapbook/the-effects-of-e-commerce-on-society/

accountlearning.com. (2016, September 1). Advantages of E-Commerce to Society and Nation. Retrieved from accountlearning.com: http://accountlearning.com/advantages-e-commerce-society-nation/

teach-ict.com. (2016, September 1). Teach ICT - GCSE ICT - ecommerce. Retrieved from teach-ict.com: http://www.teach-ict.com/gcse_new/being_online/ecommerce/miniweb/pg7.ht

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