What are the forces driving an organization to shift to analytics and be known as an analytical competitor? Analytics is when a particular organization uses large amount of data, predictive modeling, fact-based management, statistical analysis, quantitative analysis, and explanatory reasons in order to drive their business decisions and actions successfully (Harris 12). When an organization is trying to be analytically competitive, they are using analytics systematically and extensively to think outside the box to perform an execution to compete against other businesses. Today, organizations want more use of their talent and experience. To help them, analytics is used to manage their business performance, processes, strategy and key …show more content…
Within the company they have implemented factors such as data, enterprise, leadership, targets, and analytics (DELTA). Through these factors, the company is able to analyze and restructure their business model to such a degree, that their strategies can be built around it. This is what sets Amazon apart from other companies and this is what helps make them a top online retailer. Amazon has continuously been innovating and building their analytical capabilities to stay on top of the market. The company was built from scratch through analytics, data collection and experimentation. Amazon has successfully stayed on the leading edge and has remained an analytical competitor for many years. Few ways, one can see the company’s growth is through the limited tests it has performed of new features on Amazon.com. The company rigorously quantifies user reaction before rolling the features out to the market. Amazon also uses extensive analytics to help predict what products will be successful in the future. Through the statistical and quantitative analysis approach, the company recommends products to its customers based on their previous buying experience. From the start, Jeff Bezos has envisioned Amazon.com as an analytically managed company. Bezos wants to squeeze every bit of efficiency out of its supply chain. The concept of personalization was based on web transaction and statistical algorithms, and now it has
Amazon understood firsthand that the competitive advantage of a company originates immediately from how distinctive the organization's resources and competencies are. Amazon is able to both engage in production at a lower cost and generate a superior product at a standard cost. This is accomplished mostly via Amazon's strategy of having a wide variety of goods and competitive pricing. Customers know they can find basic products at slashed prices or high quality goods at standard prices and this is all achieved via the enormous range of products and product brands and types available on their massive marketplace. For example, the depiction displayed in the case study which shows how growth was related directly to: lower cost structure- lower prices customer experience traffic sellers -selection and convenience. While this is a grave oversimplification of the Amazon business model, it demonstrates how many aspects of the strategy reinforced one another.
Amazon.com operates within a customer centric basis, which is expressed in their Company Values Statement. They start with the customer needs first and work counter clockwise. Amazon realises the importance of listening to the customer and to value other people's opinions as well. Furthermore, Amazon is more involved than just listening; they believe in doing.
In order to be an effective analytical competitor, Davenport and Harris (2007) assert that firms must meet certain prerequisites. Those prerequisites are at least a moderate amount of quality data about the type of business that analytics will support, hardware and software, the commitment of managers to develop analytics, and executive sponsorship (Davenport and Harris, 2007, p.16). Analytics is about extrapolating new information and
The features are consumer-friendly and guide the customer through product listings that rival any major department store. Their website allows the recommendation of future product purchases based on consumer shopping/browsing history saved through their advanced customer relationship management (CRM) system. Amazon’s initial desire was to prevent the average consumer from needing to leave the comfort of their own home to accomplish their normal and continual shopping needs. This desire continues to be the driving-point for Amazon’s foundation.
Sumangla Rathore, Avinash Panwar, Prakriti Soral (2014). Critical Factors for Successful Implementation of Business Analytics: Exploratory Findings from Select Cases. International Journal of Business Analytics and Intelligence, 2(2), 14-15.
Since 1994, when Amazon began, Jeff Bezos has been known for thinking outside of the box and looking for new and innovative ways to grow Amazon by bringing different technologies and services to their millions of customers. When discussing being influenced by other companies, Bezos once said, “You want to look at it and say, ‘That’s very interesting. What can we be inspired to do as a result of that?’ And then put your own unique twist on it” (Lashinsky, 2012). Bezos strives to bring products and services to the customers that they need but in a way different than any other competitor is currently doing. Some of the major technologies and innovations that Jeff Bezos has brought to Amazon since their startup 20 years ago are the Amazon Kindle and the Amazon Prime service among many others.
The objective of this case study is to outline and provide a brief overview of Amazon.com’s (Amazon) mission, strategic direction, core competencies, relied technologies and their future impact of new technologies, and how management and use of consumer data will impact future business.
Amazon.com (Amazon), founded in 1995 by Jeffrey Bezos, has grown from an online bookseller to a virtual retail supercenter selling products ranging from books, toys, food, and electronics for which it is best known today (Hill & Jones, 2013, p. C272). At its inception, the goal of Amazon was to become an online bookstore that could offer a wider range of books to millions more customers than a typical brick-and-mortar (B&M) bookstore at lower prices (Hill & Jones, 2013, C272). After 2 years of rapid growth, Bezos took the Company public in order to raise more capital (Hill & Jones, 2013, C273). In addition to its lower prices, Amazon had the benefit of its patented 1-Click ordering system which improved the ease of ordering from its site. Some of the Company’s competitors such as Barnes & Noble and Borders, attempted to compete in the online bookselling industry however, none were successful as Amazon had first-mover advantage (Hill & Jones, 2013). As the Company’s growth began to slow down in the late 1990’s, Bezos expanded Amazon’s product offerings into CDs, cameras, DVD players and other electronic and digital products which created another advantage for the Company. Over the 2000s, many of the weaker company’s in competition with Amazon found online retailing too complex and expensive and consequently formed agreements with Amazon (or eBay) to operate their
Amazon, as an organization understands the needs of their customers on a much deeper level than its competitors as well as focuses on constant improvements in the market. Currently, their major focuses are e-books, Amazon DynamoDB, a personalized shopping experience, and expansion into various retail outlets. (Fitzsimmons 2014) Amazon has proven to be very successful with their bookstore business, replacing the need for retail large bookstores such as Barns and Noble and Borders and local bookstores. Amazon understands that customers are demanding an online retailer that understands what their wants and needs are. Henceforth, Amazon has created databases and technology that creates a very personalized shopping experience for each and every Amazon shopper. As an organization, Amazon understands that this market is still being developed as technology increases. Amazon strives to have their solutions all be backed with advanced technology that puts the customer first and creates strong brand loyalty. In doing this Amazon not only builds a stronger client base, but can truly understand their customers on a level that is a wonderful service for their shoppers.
The company has many strengths. First, Amazon is the world’s leading online retailer. According to the 2016 Annual Report, Amazon had total net sales of US $135, 987 million in 2016. These total net sales include three segments which are North America, International, and AWS. Second, in comparison to many companies, Amazon has a superior logistics and distribution system, which allows the company to actualize improved customer fulfillment. Third, with its prolonged strategic drive on low-cost, differentiation, and focus, Amazon offers a wide range of product at low prices to customers. Fourth, Amazon enjoys global recognition from its customers. As stated earlier, Amazon built a strong brand in very little time. Finally, the
In 2013, global e-retailer Amazon made over 74 billion dollars in sales (“Amazon Income”) . In addition to its primary e-retailing function, the company owns many subsidiaries, including companies like Audible UK and IMDB (“Subsidiaries”). Jeff Bezos, CEO of Amazon, defines the company’s core values as as “customer centricity, putting the customer at the center of everything we do, invention. We like to pioneer, we like to explore, we like to go down dark alleys and see what’s on the other side” (“Amazon”). Since its inception in 1994, Amazon has led the e-commerce market, continually expanding and innovating to become the corporate behemoth it is today (“About Amazon”). The development of new technologies that set trends in Consumer Behavior has been critical to its success; many of these developments build on its pioneering software patent--One-Click.
Amazon’s Founder and Chiefy Executive Office outlines the companies business objectives as: Increase Sales, promote the brand, create a loyal customer base and fiscal strength. By expanding each operational goal its gives a better understand on how the operating systems contribute to Amazon’s objective. Sales can be defined as making sure the customer gets what he wants, but also feeding in to the psychology of impulse buying. Impulse purchases can be promoted through an application Amazon employs, called the Dash. When conducting a search for a particular item the results of that search offer not only the item itself, but also similar items. There is also a feature that shows the customer what other customers, who have order this particular item of interest, have also purchased. Promotional brand occurred during Amazon’s Kindle was launched. In 2005 Bezos believed that “every book ever written in any language will be available (to the enduser) in less than sixty seconds”. (Bezos, 2009). The edict issued that the demarcation between Kindle, the device and Kindle the service be seamless to the enduser. In the four years that followed, sales have exceeded budgetary expectations. The e-mail feedback from customers is strongly positive with 26% of customer e-mails containing the word “love”.
Amazon is the world’s largest online retailer and is indeed a pioneer in the online retailing world. Though it started as an online bookstore, its success in its venture drove it to diversify into selling anything that can be sold online. Furthermore, Amazon has also expanded globally and now operates around the world through a combination of localized gateways and globalized delivery and logistics platforms. Amazon follows a well implemented strategy that contains five parts.
Beyond the highly anticipated package delivery drones and the cashier-free grocery stores of Amazon, there are numerous business segments that help Amazon remain as one of the largest online e-commerce marketplaces. Amazon has set up an empire that has enabled it to continue with highly lucrative strategies and business opportunities that continually push it forward. “Amazon is at the beginning of an investment cycle,” one of Morgan Stanley’s financial analysts remarked and also stated “unclear how long this cycle is expected to last.”
Since Amazon has a competitive edge over Barnes and Noble and Borders in most aspects of online merchandising, they have to develop innovative strategies to increase their online market share. These strategies include increasing their marketing campaign, expanding into the international growth segment, nurturing existing vendor relationships, establishing new long-term vendor relationships, and adding new product categories.