Project Report

On
‘AMAZON’

SUBMITTED BY
Name: Arshi Khan
Roll No: 1921189
Subject: Management Concepts and Practices
Batch: 2019-21

UNDER GUIDANCE OF
Dr Vaishali Trivedi

St. Kabir Institute of Professional Studies

Table of Contents
INTRODUCTION .................................................................................................................................. 3
1.1 HITORY OF THE COMPANY ........................................................................................................ 3
CHANGES OVER THE YEARS ........................................................................................................... 3
1.2 AMAZON MANAGEMENT PHILOSOPHY ................................................................................ 6
1.3 CSR ACTIVITIES UNDERTAKEN BY AMAZON ....................................................................... 7
2.1 AMAZON’S STRATEGIC BUSINESS UNITS ............................................................................ 10
2.2 ORGANIZATION STRUCTURE OF AMAZON ......................................................................... 11
2.3 LEADERSHIP AT AMAZON ....................................................................................................... 12
3.1 CORPORATE STRATEGY & COMPETITIVE STRATEGY ..................................................... 14
STRATEGIC CHANGES ................................................................................................................. 16
3.2 MISSION & VISION STATEMENT ............................................................................................. 17
3.3 NEW PRODUCT LINE OR BRAND ............................................................................................ 17
3.4 NEW MARKET EXPLORED ........................................................................................................ 17
3.5 FUND RECEIVED OR NEW INVESTMENTS............................................................................ 18
3.6 MERGER OR ACQUISITION ....................................................................................................... 18
3.7 CHANGE IN MANAGEMENT ..................................................................................................... 18
3.8 IPO ISSUED ................................................................................................................................... 19
3.9 POLICY CHANGE ........................................................................................................................ 19
4.0 COMPETITORS CHANGES IN THE MARKET ......................................................................... 19
 INTRODUCTION

1.1 HITORY OF THE COMPANY

Amazon is an e-commerce company based in Seattle, Wash. It has a total annual sale of US
$232.9 billion in 2018. The company, Amazon.com was founded by Jeff Bezos which was
started on July 1994 and was originally called ‘Cadabra’. The one thing that was famous
about the company is that they started off with selling books. Their first profit as a company
was in the last quarter of 2001. The logo of Amazon contains its brand itself that is ‘Amazon’
with an arrow pointing from A to Z with a smile. That represent they will be able to provide
every type of product to the customer and with a smile they focus on the best customer
service.
It has a distinction of being one of the first largest companies around the globe to sell goods
over the internet. Amazon started a brand-new concept of an online bookstore and then
rapidly diversified by adding in variation in the goods that were sold, including clothing,
music, DVDs, video games, etc...
Just after five-year, in 1999 after he started Amazon Jeff Bezos was the “Person of the Year”
In Time magazines. This was mainly because of Amazon's success in making online
shopping accessible to all. Amazon represented itself as a “Customer- Obsessed” company. It
aims at being a customer-centric company at all levels. Amazon believes that if a company
doesn’t listen to customers, it will fail.
Amazon being one of the largest online retailers has excellently used the advantage of being a
purely online merchant with its outstanding customer centric approach. The progress of
Amazon has always been steady in terms of growth over the years and there is no sign that
the growth of the company will stop anytime soon.

CHANGES OVER THE YEARS

It's hard to remember that it began in a garage as big and ubiquitous as Amazon is today.
Jeff Bezos and his first few staff packed books and in those first days took them to the post
office themselves.
Amazon wrote off as another dot-com fever dream for Borders and Barnes & Noble to
swallow up or wipe out even after the company had built warehouses to store stock, making it
‘A business with real revenue and real assets’.
Instead, in 2011, Borders filed for bankruptcy protection and hundreds of shops have since
been closed. The teetering was left to Barnes & Noble. Meanwhile, Amazon has shifted into
nearly every form of product, media, and service imaginable.
According to eMarketer, it will account for almost half of internet retail sales in 2018 and
lays the groundwork for a physical retail company — fitted with labor-saving techniques
such as cashier-free checkouts that have legacy grocery stores and convenience chains that
scramble to catch up.
Amazon has continuously reshaped retailing today, 25 years ago. It is one of the top three
most precious businesses in the globe, with a market capitalization in excess of
approximately 200 countries ' GDP hovering around US$ 1 trillion.
If you had purchased your IPO shares worth $100 in 1997, today it would be worth about
$120,000. This is the tremendous change over the years that Amazon as a company has
gained.

Here are some important data/statistics in the fast evolution of Amazon

 Amazon Stock Price

 Retail Store Closures

 Amazon as Major Employer

 The Next Generation Plans

Bezos said the attempts of Amazon are focused on stopping it from dying. "Amazon
isn't too large to fail," he observed at an all-hands conference in 2018.
After undertaking studies on online retailing and analysed hundreds of instances, the
future of Amazon is inextricably related to the increase of artificial intelligence, like
the future of shoppers and society. Amazon is betting on AI starting with Alexa, the
company's virtual assistant.

In fact, Amazon is testing anticipatory shipping, a practice where it anticipates what

shoppers need and sends them the products without ordering them from shoppers.
Shoppers could keep the items they like and return without charge those they don't
want.

A diagram for anticipatory shipping in Amazon's patent.

1.2 AMAZON MANAGEMENT PHILOSOPHY

Amazon's CEO, Jeff Bezos, is certainly more than a traditional leader. His philosophies of company
are quite distinct but very strong. Bezos guarantees that clients are cared for at all times. All his
thoughts are about how customer satisfaction can be improved. He believes it can be done by placing
yourself in your customers ' shoes. Although his ventures sink deep into the digital era, the main
stakeholder: customers are not forgotten.
Today, based on these philosophies, Jeff Bezos heads a successful business. All Amazon departments
are supported by priceless customer care. Bezos is the architect behind Amazon's customer care team
with more than 160 million active clients.

FIVE PHILOSOPHIES
 Listen and Understand

The main philosophy of Amazon is listening. Listening to their clients is essential for any Amazon
worker. Above all, to comprehend what the client wants, they must listen. Hearing out the other
individual is fairly easy. When you want to know them, the challenge emerges. You won't be able to
give a thorough solution without adequate knowledge.

Tackling Customer Needs

Jeff Bezos once said, "We're never based or obsessed with competitors. We are always focused and
obsessed with the client. We are working in a workflow backward. We always start with the
requirements of our customers and then create the structure."

The Most Important Person

Jeff Bezos claims that when they focus on customer needs, businesses become resilient. Bezos
discovered it hard to define his philosophies when Amazon was going through his early days. Most
leaders opposed his customer focus. Seventy percent of the leaders dismissed his obsession with
customer satisfaction. This was an overwhelming amount certainly. A distinct weight is provided to the
empty seat in all conferences. And, choices are produced based on how they would react to customer
sitting on the empty seat. Although the client concerned is invisible, Amazon's significant meetings are
always accounted for.

Never Settle
If the findings are not "100 percent," Amazon is never pleased. In 2011, Bezos was proud that before
the holiday season and New Year, his business fulfilled its commitment to get 99.9 percent of all orders
to its clients. Bezos, however, was not "pleased." He considers space for change and enhancement as
the accomplishment is not 100%. As your client support team grows stronger, this is when the chat
software for the client is live you can enhance from 99.9% to 100%.

Respect

The philosophies of Jeff Bezo's customer care will be incomplete without "respect." The brand must pay
attention to its current and future customers at all times. If clients are dissatisfied, the word about it will
definitely be distributed to 6 individuals. And if you make an internet shopper dissatisfied, you'll
understand about it at least 6000 individuals.

1.3 CSR ACTIVITIES UNDERTAKEN BY AMAZON

Interestingly, Amazon does not publish an annual sustainability or CSR report despite the
size and breadth of its company. The company's official website continues the only source of
data about the company's spectrum of sustainability programs and actions.
In addition, the first sustainability executive of Amazon, Kara Hartnett Hurst, was appointed only in
August 2014 as an indication that the company's CSR aspect has not been given due attention for a
long time.

Amazon ranked # 1 in 2017, the third year in a row published by Harris Poll in Annual
Reputation Quotent. Packaging improvements and renewable energy obligations are the two
main fields where Amazon has considerably enhanced its social responsibility.
Amazon CSR Initiatives and Programs

1. Amazon Supporting Local Communities

 Amazon introduced its first nationwide initiative in its U.S.

fulfilment centres with Feeding America in 2016 to donate surplus
food to feeding America
 The LEAP 2.0 library partnership of World reader in Kenya reaches
around 500,000 individuals by providing digital reading to all 61
public libraries in Kenya
 A Local Love event was attended by over 1,000 volunteers, service
providers, retail suppliers and clients. Amazon has donated more
than 1,600 hours of volunteer work and USD 65,000 in non-profit
products to date.
 Amazon's Device Donation Program promotes the donation of
digital devices and gift cards to schools around the U.S. which is
near to the Amazon fulfilment centres.
 Amazon occasionally hosts ' Girls Who Code ' events to help more
girls become interested in coding
 With money and product donations, the e-commerce giant promotes
local and national non-profits.

2. Amazon Educates and empowers employees

 Amazon Career Choice Program prepaid 95 percent of employee tuition

"to take classes in on-demand areas such as airplane mechanics or
nursing, irrespective of whether the abilities are applicable to Amazon's
career". More than 16,000 staff around the world have attended the
program to date.
 Amazon Virtual Contact Centre enables staff of Amazon customer
service to work from home.
 Amazon's "Pay to Quit" program provides warehouse workers with USD
5000 who quit to encourage staff to take a moment to think about what
they really want.
3. Amazon's energy consumption

 Launched in 2017, Amazon Wind Farm Texas produces more than

1,000,000 megawatt hours of clean energy from over 100 turbines
annually.
 By 2020, the e-commerce giant promised to host solar energy systems at
50 fulfilment centres.
 A "district energy" system is planned to heat three million square feet of
Amazon's headquarters in Seattle — recycling heat from a nearby
building to heat the office space
 With the ability to produce 41 megawatts (MW) of power, Amazon will
host solar energy systems on 15 fulfilment plant rooftops across the US.
 The ten renewable energy projects of AWS will produce an annual total
of 2.6 million megawatt hours of energy.

4. Amazon's waste management and recycling

 Amazon celebrated Frustration-Free Packaging's 10-year anniversary in

2017. Over the past century, Amazon claims to have removed over
244,000 tonnes of packaging products.
 Due to the packaging waste reduction program, the e-commerce giant
eliminated the total of 305 million shipping boxes in 2017.

5. Other initiatives and charitable donations from Amazon CSR

 Amazon Smile assists clients when buying atamazon.com products

to promote their favourite charitable organization. There are almost
one million charities eligible for Amazon Smile.
 Amazon Literary Partnership promotes non-profit literary
organisations by supporting aspiring authors with grants
 The firm is dedicated to providing occasional disaster relief
donations. For instance, about USD 290,000 was donated to Nepal's
2015 earthquake relief efforts, about USD 320,000 was donated to
Philippine Typhoon Haiyan relief, and about USD 430,000 was
donated to U.S. Hurricane Sandy relief in 2012.
 In 2015, Amazon provided 2,000 donation gifts to active U.S.
military men and women who served far from their families.
2.1 AMAZON’S STRATEGIC BUSINESS UNITS
Amazon has five powerful business units, each of which is in its own right to be a successful
business. It's not one or two products driving achievement; it's an army. Amazon's company
consists of five main divisions: Amazon.com, AWS, Alexa, Amazon Prime, and Whole
Foods Market.
Each of the five main divisions of Amazon would be an amazing undertaking on its own.
Combined, they generate the biggest flywheel in the world.
Below are the each of Amazon’s divisions as their business units:
1. Amazon Ecommerce Marketplace: Amazon.com
The e-commerce company is booming, driven by big logistics and vendors from third
parties. Amazon literally becomes the online store de facto. Amazon is the Western
world's most monopolistic and well-positioned marketplace ever. They made $136B
in income last year, with double-digit development annually.
An estimated 44% of U.S. e-commerce happened on Amazon.com in 2017. And for
each of the last five years, Amazon has grown at least 13 percent year-over-year.
2. AWS Amazon Web Service
Amazon as a company for their marketplace has constructed AWS. They required the
capacity to host pictures and data for Amazon.com and the product was constructed in
a modular fashion by Bezos being Bezos. As AWS grew, Amazon's prices were
constantly cut to crush competition, making AWS the simple choice.
AWS is currently powering ~42 percent of the internet. Microsoft, Google, and IBM
(combined) are more than double that. It makes sense, however, given the user-
friendly scheme and inexpensive pricing. AWS accounts for 10% of Amazon's total
income, with $4.6B in Q3 2017 (up 42% year-on-year) and $1.2B in profit (up 36%
year-on-year).
3. Alexa (Software & Hardware) Voice Assistant
In 2014, the multi-headed monster of Amazon received a strong fresh addition.
Amazon's ambition is to own everything for those who don't read between the lines.
Amazon ultimately intends to give it regardless of the product's nature or buy.
Alexa is this next iteration. Suddenly, Amazon is sneaking a spy straight into your
home with the explosion of Alexa-powered phones.
4. Whole Foods
Amazon purchased Whole Foods for around $13B in 2017. Things are getting
interesting now. Here is a full overview of the consequences of the purchase of Whole
Foods. To sum up, Amazon has purchased a completely functional, well-balanced
supply and demand network.
5. Amazon Prime
Last major pillar of Amazon is complex. Prime is both a free two-day shipping and
content and entertainment streaming service. Studies demonstrate that Prime clients
spend almost twice as much on average as non-members ($1300 vs. $700). That alone
is enormous and Amazon is making even more cash at $7.99 a month.
63 million US homes are projected to have Amazon Prime (up 35% year - to-date).
And finally, Amazon just wants Prime subscribers to be increased. While both Prime
providers presently have fewer original content and fewer libraries than rivals, they
are largely free, maintaining individuals in the ecosystem of Amazon.
2.2 ORGANIZATION STRUCTURE OF AMAZON

The structure of the Amazon organization can be categorized as hierarchical. Senior

management team consists of two CEOs, three Senior Vice Presidents and one Worldwide
Controller, who are directly accountable to Amazon CEO Jeff Bezos for multiple essential
elements of business reporting.
There are seven sectors that also report to Amazon CEO, such as information technology,
human resources and legal operations, and segment heads.

Amazon's hierarchical structure has evolved because of the huge size of the company. The
world's biggest internet retailer by income employs 560,000 individuals and has over 300
million clients worldwide.
Amazon's organizational structure incorporates many small teams dealing with different
business aspects. The introduction of' two pizza rule' is credited to Amazon founder and CEO
Jeff Bezos. Under this rule, meetings should be held in small enough teams that could all be
supplied with just two pizzas.
It is essential to note that Amazon remains extremely flexible to adapt to frequent
modifications in the internal marketplace, despite its big size, unlike many other businesses
with hierarchical organizational structure.
In addition, the internet retail giant is leading changes in the internal company setting,
causing disruptive innovation in e-commerce and is presently causing disruptive innovation
in the worldwide logistics industry. This is primarily due to Amazon founder and CEO Jeff
Bezos ‘visionary and effective leadership’.
2.3 LEADERSHIP AT AMAZON

The company has a unique culture of hiring and developing leaders with a focus on the 14 principles
of Amazon leadership that guided and shaped the decisions of the company and their distinctive
entrepreneurial, cutting-edge and Darwinian culture.
To build a strong entrepreneurial and highly execution-based culture, these principles of Amazon
leadership were set in stone. Every employee of Amazon is expected to adhere to these principles and
all future hires on the same criteria are tested by the firm. Whether you're an individual contributor or
a team manager at Amazon, you're an Amazon leader and guided by these 14 principles of Amazon
leadership.

14 Leadership Principles
Customer Obsession: Leaders start with the customer and reverse their work. They work
hard to earn and maintain trust in customers. Although leaders are paying attention to
competitors, they are obsessed with customers.
Ownership: Leaders are their owners. They think long term and for short-term results they
don't sacrifice long-term value. They act on behalf of the company as a whole, beyond their
own team. They never say that "this is not my job."
Invent and Simplify: Leaders expect and require their teams to innovate and inventive and
always find methods to simplify them. They are outwardly conscious, looking for fresh
thoughts from all over the place and are not restricted by "not invented here." Because we do
fresh stuff, we recognize that for lengthy periods of time we may be misunderstood.
Are Right, A Lot: A lot of leaders are right. They have strong judgment and instincts of good.
They are looking for different perspectives and are working to disconfirm their beliefs.
Learn and Be Curious: Leaders will never learn and will always try to improve themselves.
They are curious about and act to explore new possibilities.
Hire and Develop the Best: With each hire and promotion, leaders increase the performance bar.
They recognize and voluntarily move individuals with outstanding talent throughout the
organization. Leaders are developing leaders and taking their position seriously in coaching
others. We operate to invent growth processes such as Career Choice on behalf of our
individuals.
Insist on the Highest Standards: “Leaders have relentlessly high standards–these standards may
be unreasonably high for many people”. Leaders are steadily raising the bar and driving their
teams to produce goods, services and procedures of high quality. Leaders are responsible for
ensuring that faults are not sent down the line and issues are resolved so they remain fixed.
Think Big: Small thinking is a prophecy of self-fulfilment. Leaders create and communicate a
bold, results-inspiring direction. They think differently and seek ways to serve customers around
the corners.
Bias for Action: In a company, speed matters. There are many reversible choices and actions and
there is no need for comprehensive research. We value the risk taking calculated.
Frugality: Make more with less. Restrictions generate resourcefulness, self-sufficiency, and
invention. There are no additional points to increase headcount, size of the budget or set cost.
Earn Trust: Leaders listen carefully, talk openly, and respectfully treat others. They are vocally
self-critical, even if it is embarrassing or awkward to do so. Leaders do not think perfume smells
in the body odour of their team or their team. They are benchmarking against the best for
themselves and their teams.
Dive Deep: Leaders work at all levels, remain linked to information, commonly audit, and are
sceptical when differing in metrics and anecdotes. There is no underlying job.
Have Backbone; Disagree and Commit: Leaders are obliged to challenge choices respectfully
when they disagree, even if it is awkward or exhausting to do so. Leaders are persuaded and
tenacious. For the sake of social cohesion, they do not compromise. They undertake entirely once
a choice has been determined.
Deliver Results: Leaders concentrate on the main inputs for their company and deliver them in a
timely fashion with the correct quality. They rise to the opportunity despite setbacks and never
compromise.
3.1 CORPORATE STRATEGY & COMPETITIVE STRATEGY

CORPORATE STRATEGY OF AMAZON

The generic corporate strategy of Amazon can be defined as concentric diversification. This strategy
is based on leveraging technological capacities for company achievement and a cost leadership
approach that aims to offer its clients maximum value at the lowest price as well as wrapping their
company around clients where they find Amazon the go-to portal for their online shopping
requirements.
Indeed, as can be seen from the fact that it is the biggest online retailer in the world and has
continuously been the leader in the market segments in which it works, this approach has paid off
well. Having said that, it should also be noted that cost leadership can follow the law of decreasing
returns in which firms find that they cannot maintain development or boost profitability once the
"low-hanging fruit" is plucked.

Amazon is put in the Overall Cost Leadership quadrant and the key to understanding its general
approach is its constant focus on expenses. Amazon's particular action to pursue this approach
includes high discounts for frequent employees.
Example: Through the Amazon Prime programme ensuring timely and even ‘Express delivery’ and,
at times, waiving shipping fees, passing on the advantages of avoiding government taxes to clients,
thereby further reducing the cost and making the customer experience as seamless and smooth as
possible.
COMPETITIVE STRATEGY OF AMAZON
The strategy of Amazon is guided by its sources of competitive advantage, focusing on
technology, updating the advantages of economies of scale, and leveraging the efficiencies
from the synergies between its external drivers and inner resources were the cornerstones of
its business model. Indeed, the company has embraced Big Data to such an extent that it is
now able to market this as another service offering.
Example 1: Anyone who has shopped on Amazon will find a list of recommended products
that will be picked based on browsing history and mapping their purchases to likely future
purchases. This has resulted in Amazon being able to sense and intuit what consumers want
and tailor its strategies accordingly.
Amazon uses technology to the fullest, as mentioned throughout this article, which is not
surprising given that it is after all an internet-based company.
Example 2: In addition, Amazon does not ‘Stock’ products that appeal to the need for "instant
gratification" in which consumers make impulsive purchases and are impatient and need
quick fixes. For example, the other product lines, with the exception of their films and other
digital items, are not all in the category of those that give customers this gratification.
However, the overall cost leadership of Amazon with little product differentiation means that
its business model was copied in a cutthroat price war by "me-too" competitors that left
everyone bruised. Furthermore, its focus on cost reduction at the expense of product
differentiation means that its products are also available on other portals and there is no
exclusive or unique line of products.
In conclusion, Amazon's future looks bright and if it continues to focus on its core
competencies while expanding its global value chain, there is no reason why it cannot
maintain its market leadership.
STRATEGIC CHANGES

1. Amazon Prime: An increase in the value of its proposal in the form of free shipping.
That has developed into the Amazon Empire’s linchpin & for any fresh suppliers
entering the market, Leveraging Prime should be essential to the approach.
2. Small business fuel: Amazon offers a novel offer to small companies with
Launchpad, a service specifically intended for start-ups. One would expect more
funding from Amazon to be offered to fresh projects like start-ups that will increase
multiple ecommerce services.
3. Home delivery & supply chain logistics: Amazon will discover methods to
incorporate technology into third-party logistics (3PL) and freight companies in much
the manner it has with Whole Foods. Amazon is already placing enormous stress on
its competitors ' supply chains, setting expectations of delivering products within 48
hours.
4. Artificial intelligence: “Amazon has even developed an "Alexa Fund" for start-ups,
targeted at game-changing AI investments.”
5. Healthcare: It has also joined forces with Cardinal Health and other distributors in an
effort to extend reach in medical devices to hospitals and others.
6. Geographic expansion: In developing markets like Asia and the Middle East, the
business will develop. Providers have possibilities to position themselves in these
markets as niche players.
7. Acquisitions: With 10 deals in 2017 including Game Sparks and Blink (home security), E
Company has dramatically increased its acquisition activity. Amazon will bolt on new
businesses as its platform expands that can leverage its backend.
3.2 MISSION & VISION STATEMENT

Amazon’s mission statement is “We strive to offer our customers the lowest possible prices, the best
available selection, and the utmost convenience.”
Amazon’s corporate vision is “to be Earth’s most customer-centric company, where customers can
find and discover anything they might want to buy online.”

3.3 NEW PRODUCT LINE OR BRAND

3.4 NEW MARKET EXPLORED

3.5 FUND RECEIVED OR NEW INVESTMENTS

3.6 MERGER OR ACQUISITION

3.7 CHANGE IN MANAGEMENT

3.8 IPO ISSUED

3.9 POLICY CHANGE

4.0 COMPETITORS CHANGES IN THE MARKET