Amazon is the world’s online leadingstore.
It is more notoriously known as the “Everything Store”. The E-commerce giantsells everything from groceries to the latest tech accessories and has takenover the market by storm, filling 1,600,00 orders a day and counting. It hasalso entered new markets along the way such as the international, entertainment,delivery, and grocery market. In fact,Amazon couldn’t have become the gigantic online retailer it is today withoutthe structure of the company. Amazon functions on a hierarchical structure.Jeff Bezos is Amazons founder and CEO, and has a team of 10 top executives whoreport directly to him. The Seattle based company found an innovated way totake online retailing to a new height, so high that brick and mortars are fearingfor their business.
Amazon did not start off by selling asmany of the products it sells today. Amazon first started in 1994, as an onlinebookstore, founded by Jeff Bezos’s. Bezos’s was a Princeton graduate whostudied computer science and electrical engineering (Biography 2017).
In 1995,the company changed its name from Cadabra to Amazon which captured Bezos dream.His dream was to one day own a company as big as the amazon river. Although, Bezos’shad no idea how fast his company would take off in a time were online storeswere striving to survive. Biography.com (2017) explains, “Amazon.
com sold books across the United States and in45 foreign countries within 30 days. In two months, sales reached $20,000 aweek, growing faster than Bezos and his start-up team had envisioned”. Over the years as sales continued to rise Amazon began tosell more products like music cd’s, software, toys, and even groceries. In2007, Amazon introduced it latest invention the Kindle. Which allowed readersto access e-books online instead of hardcover books. From 1998-2017 it hasacquired 91companies, which have contributed to its growth (Wikipedia 2017).One of its latest and biggest acquisition’s is the purchase of Whole Foods. BusterCoen (2017) states, “Amazon.
comInc. is buying popular supermarket chain Whole Foods for $13.7 billion.The deal is the priciest in Amazon’s history, with the former high-water mark beingthe $1.2 billion Jeff Bezos and co. shelled out for online shoe store Zappos”.
Purchases like these have opened the door for Amazonto expand. Since then it has started Amazon Prime (membership service), AmazonPrime Video (streaming service), Amazon Air (drone delivery service), Amazonfresh (grocery service), and Amazon International, making it the leading onlineretailer. Jeff Bezo’s, founder and CEO of Amazon started hiscompany out of his garage like most famous tech companies. Since the companyhas skyrocketed, its moved its headquarters to Seattle Washington DC where itacquired many officers who report directly to Bezo’s. Amazon’s team consist oftwo CEO’s, six senior vice presidents, a corporate affairs officer, and a VPTechnical Advisor to CEO. Eugene Kim (2017)explains, “Jeff Wilke, CEO of Worldwide Consumer, Andy Jassy, CEO of Amazon webservices, Jeff Blackburn Sr. VP of Business and Corporate Development, DaveLimp SVP of Amazon Devices Digital Management, Diego Piacentini, SVP ofInternational Retail, Brian Olsavsky SVP &CFO of Financial Administration,David Zapolsky SVP &General Counsel, Legal, Beth Galetti SVP of HumanResources, Jay Carney Corporate Affairs, Jeff Helbling VP Technical Advisor toCEO”.
Most of these officers are company veterans. Since Amazons start from an online book store to itsnow “everything store” its revenue has grown tremendously. NASDAQ’s reportshows a revenue growth of $74,452,000 in 2013 to $135,987,000 in 2017 and itsstock price has increased from $256.08 a share on 1/02/2013 to a whopping$1,170.00 a share today. Earlier this year Amazon promised to bring 100,000 jobs to U.
S.. Sincethen it has exceeded its expectations and now has over the 500,000 employees.
Seth Fiegerman (2017) states, “Amazon revealed Thursday that it had 541,900employees in the third quarter, up from a little more than 300,000 in the sameperiod a year earlier”. Although Amazon continues to provide jobs, it does notget the same recognition for employee benefits as Google. In fact, it has had afew acquisitions of harsh labor practices. Jon Swartz (2017) states, “Amazon has a troubling labor history, marredby lawsuits, picketing, grueling work conditions, complaints of managementtactics and lower wages. Consider:Amazon pays its warehouse employees 15% less on average than theprevailing wage of other warehouse workers in the same region”.
Despiteharsh acquisitions its employment is rapidly growing. Every potential employee must go through a hiringprocess to become an Amazonian. Amazon explains, “First you must apply online,second if your application meets the requirement, you will receive an emailinforming you, third you must schedule and attend an Amazon new hire event, fourthyour pre-employment screening will be processed, fifth you will complete youronline training, sixth you will attend your scheduled start date” (Amazondelivers jobs 2017). Amazon was primarily an e-commerce and cloud computing site.Over the years it has evolved into multiple industries.
One of Amazon’s wellknown industry in Amazon Video, an online movie and tv show streaming service. Thisstreaming service accounts for $1.9B of its revenue. Champaign Williams (2017)says, “Today, that servicehas about 80 million subscribers andaccounts for $1.9B in annual revenue”. In addition to the movie and tvshow industry Amazon has also entered the music industry. Its music streaming servicecompetes with other companies like Spotify, Apple Music, and Pandora. Althoughit is not dominating this industry it brings in revenue in the billions.
Williams(2017) explains, “The company entered the fraywith streaming giants Spotify, Apple Music and Pandora in an industry that has grownto roughly $2.3B — thoughSpotify continues to dominate”. Another industry Amazon has taken overlately is the grocery delivery industry. When Amazon first announced, it wasbuying Whole Foods for 13.7B it sent other competitors running in fear. Amazonentering this industry has kept other giant competitors like Walmart and Krogeron its toes. Companies like these must force down their prices to compete withthe online retail giant. Williams (2017) states, “The acquisition was astrategic move on Amazon’s part to better position itself for the logistics andsupply chain challenges that come with online-to-door grocery deliveries”.
To put it another way, in a recent HEB interview I was asked, “Who do you thinkHEB’s biggest competitor is?” I responded, “Walmart”. To make a long storyshort my answer was wrong. My interviewer responded, “Its Amazon”. She went onexplaining how Amazon has taken a lot of their business and how they must lowerprices just to keep up. With that in mine I think it’s safe to say this isanother industry Amazon is dominating. One of the biggest and known industry Amazonis having difficulty achieving is the delivery market.
Amazon conducted itsfirst drone delivery service in Cambridge, U.K. in just 13 minutes. Since thenits faced U.S.
regulatory hurdles that’s kept it from expanding its own deliveryservice. Georgia Wells & Laura Stevens (2016) explain, “One factor driving Amazon to take over more of its supplychain are skyrocketing shipping costs, tied in part to consumers’ appetite forspeedy deliveries. In the third quarter, the Seattle-based company’s shippingcosts rose 43% to $3.9 billion”. If Amazon can get the Federal Aviation Administrationto approve them to fly beyond strict designated areas, it could become a fulldelivery service like FEXEX and UPS.