The Amazon Juggernaut

Amazon.com was founded in 1995 by Jeff Bezos and has been led by the same individual ever since. The company started out selling books strictly online, through Amazon.com, and it eventually expanded to other items. The company grew out of the U.S. states to eventually international. Over the years, Amazon revolutionized the e-commerce industry, essentially proving that retail companies can operate online.

Figure 1: Amazon transitioned from the Internet to the physical world. Photo by Bryan Angelo on Unsplash

In 2000, the company allowed individual sellers and merchants to post their products on Amazon.com for sell, and in 2007 the company debuted its first hardware Kindle e-reader, a tool to read e-books. In 2011, the company started selling Amazon’s Kindle Fire (a tablet computer). Besides products, the company focused heavily on services. In fact, in 2002 the company released the Amazon Web Services (AWS), a cloud storage provider to all sorts of businesses and entrepreneurs. The latter product essentially allowed companies to transition from on premise servers to operating on the Cloud, essentially reducing the need for massive I.T. management and costs. (History, 2015)

According to the “Canalys” reports, AWS currently hold 32.4% of the market share compared to others cloud infrastructure services. In Q4 2019, AWS posted $9.8 billion revenues, an annual growth of 33.2%. Second place? Microsoft with around 17.6% market share and $5.8 billion revenues. Make no mistake however: Microsoft is coming behind fast. Anyways. AWS is the bread and butter of Amazon’s recent success. I’d argue that their “Juggernaut” status would not have occurred if it wasn’t for AWS.

The company now offers entertainment movies and shows through their Amazon originals program, and also offers Audible (audio books). All in all, Amazon allows consumers to benefit from all their products, services, faster shipment delivery and costs through their Amazon Prime program which charges consumers monthly through a generous subscription plan. (History, 2015)

Figure 2: Amazon Alexa & books. Photo by Status Quack on Unsplash

What about the company now? Well, in 2020, they have some serious concerns. First, there is the Antitrust concerns, in which there are segments of the population that believe Amazon.com should be broken up in several companies since they monopolize certain branches of the industry. In fact, an article on “The Street” claimed the following about AWS and Amazon.com “Bloomberg reported recently that the FTC, which is taking the lead on the antitrust probe of Amazon, is looking into AWS and whether its stable of cloud computing services unfairly harms competitors, namely smaller software firms.” (Gaus, 2019) I believe this is a serious issue that Amazon has long faced. The general population is not educated about technology, so it is natural that if Amazon comes on top in a certain branch of technology, people will quickly attack the company. However, the truth is that the company utilized data to create a competitive advantage for itself.

For example, it has been mentioned numerous of times these past years that data is the new commodity of our era. In one recent research paper, it was stated “Organizations with structures that impair their ability to respond quickly or efficiently to changes within their environment are at a disadvantage to other organizations when competing for the same resources and as such are less likely to be able to achieve the goals of the organization.” (Taipala, p. 25–26) Well, this is exactly how Amazon got ahead of its competition. I believe that if they express this to the government (as many times it takes!) and to the general population, then perhaps the world will appreciate better how disruptive Amazon’s innovation really was in every single branch they ventured in.

Another concern on Amazon is their potential for growth. As they grew significantly since its birth, many analysts doubt whether Amazon can actually make another breakthrough as they did in the recent decade. In fact, “The Street” states “Those third-quarter results had some investors wondering if lighter profits and revenue guidance could portend an extended deceleration both in Amazon’s core e-commerce business and its profit powerhouse AWS.” (Gaus, 2019) To this, I say that Amazon should stay on course, and keep performing as they have always have. It’s all about how getting ahead of the competition by utilizing big data. Amazon has a lot of data on Amazon.com. How consumers consume, what they purchase, when they purchase certain items, and etc. Using big data intelligently, they can perhaps get ahead, as one of the researches conducted on “MIS Quarterly”. In fact, the latter article stated “The opportunities associated with data and analysis in different organizations have helped generate significant interest in BI&A, which is often referred to as the techniques, technologies, systems, practices, methodologies, and applications that analyze critical business data to help an enterprise better understand its business and market and make timely business decisions.” (Chen & al., p.1166)

Ultimately, I think Amazon will get over this lump. As more users hop on the Internet, and more users transition from shopping to physical retail stores to shopping online, Amazon will only gain a bigger share of the market as time goes on. With the proper leadership and right education, I strongly believe Amazon has a great future ahead.

References

Chen, H., Chiang, R. H., & Storey, V. C. (2012). Business Intelligence and Analytics: From Big Data to Big Impact. MIS quarterly, 36(4), 1165–1188. Retrieved 5–10–2016 from http://hmchen.shidler.hawaii.edu/Chen_big_data_MISQ_2012.pdf

History. (Jul. 2015). Amazon opens for business. Retrieved from https://www.history.com/this-day-in-history/amazon-opens-for-business

Gaus, A. (2019). Amazon’s 3 Biggest Challenges for 2020. The Street. Retrieved from https://www.thestreet.com/investing/amazons-biggest-challenges-for-2020

Taipala, D. J. (2008). Information technology outsourcing: A study of its role in strategic alignment and the mitigating effect of virtual organization. ProQuest.

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