Amazon Company Analysis

Name: Yunrui Liu

Institutional Affiliation:

Course: Marketing Analytics (12055)

Date: 26/04/2024
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Background and Research Aim Section

Introduction

The advancements in technology brought about many changes, such as a rise in e-commerce

platforms and how people shop globally. In this instance, let us delve into one of the strongest

forces in e-commerce, and that is Amazon. Jeff Bezos founded Amazon as an e-commerce

platform in 1994. The company has grown to become one of the largest e-commerce entities and

technology companies in the 21st century. This is because the company sells a variety of

products, including clothing, electronics, and other goods. Its rapid growth has been attributed to

the extensive logistic network that it boosts and a large human resource network. Amazon has

grown to expand into newer markets that have included entertainment, AI, and cloud computing,

all in the name of business entrepreneurship. Despite some of its biggest growth and success, the

company still faces challenges in the business and marketing departments, which stem from

external and internal factors. Thus, the data analysis will focus on Amazon as a company that has

grown to become a giant in the e-commerce platform.

Background to the Organization/ Problem

Amazon has grown from an online bookstore into one of the biggest e-commerce

platforms globally. Jeff Bezos founded Amazon.com in 1994, and it has since become a global

leader in e-commerce. Amazon.com is a Fortune 500 firm and a leading internet retailer in the

US. Unlike other online auction-based organizations, such as eBay, Amazon.com specializes in

retail sales. Amazon.com has grown rapidly and is now one of the world's most popular

commerce websites. The success is mostly due to its customer-friendly internet interface.
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Innovative features to assist clients, such as lists of top sellers, popular books, and a

recommendation system.

The suggestion system has been one of Amazon's most innovative features, and many

other shopping websites have implemented it. Amazon's recommendation system allows

customers to rate things such as books, music, movies, and technology. Customers provide

comments and ratings on the website, which generates reviews for the respective product. A

reviewer rating is used to assess the quality of client feedback. Visitors can respond to the "Was

this review helpful to you" question on the product page by clicking "Yes" or "No" after reading

the reviewers' comments. Reviewers are ranked depending on the amount and proportion of

useful feedback they have received. Choosing "Yes" would result in one positive vote for the

reviewer, and choosing "No" would result in one negative vote.

This article will focus on the elements described by Huang's dataset, including novels

published within two years, consistent with earlier findings. Huang's dataset may be skewed due

to the lack of data collection at the time of book release, perhaps leading to incorrect

conclusions. The difference in distribution between recording a two-year-old book and a recently

released book is challenging to comprehend. The lack of data from two years ago for the first

book may lead to bias and variances. This dataset may lack information on vote progression,

making the final proportion of positive votes inaccurate due to inconsistencies. To address this

issue, we recommend selecting newly released books with no past data on favorable and total

votes. This eliminates the potential for fluctuations noted above. Our dataset included books that

were freshly released and had no reviews on Amazon rather than being chosen at random. To

avoid selecting books with little reviews, we consider the number of reviews for earlier releases

by the author.
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Amazon Business Model

Amazon employs the Affiliate Business Model, which is the most effective online selling

strategy. This approach, together with the market mix of price, promotion, product, and people,

improves the company's marketing capabilities. The Affiliate Business model gives clients a

variety of purchase options regardless of where they are browsing from (Dwivedi, Rana, &

Alryalat,2017). The Affiliate Business Model provides several associated partner sites with

varying incentives. These websites give the required points that link to merchants during the

purchase process, with the goal of increasing sales. Because it is a pay-for-performance model,

the merchant incurs no charges if affiliates do not generate sales. Similarly, Amazon is centered

on customer obsession, which is vastly based on what the customer needs and their overall

preferences. This includes a majority of products for selection, faster delivery modes, and a

competitive pricing of their product against their competitors.

Subsequently, its business models bank on technological and logistical innovations, such

as extensive warehouse networks and artificial intelligence in sorting customer orders. This is

made possible by the presence of automated services and delivery systems. With a massive

investment in efficiency, Amazon has grown to become successful in the e-commerce platform

while offering quality services to its customers globally.

Challenges and Business Problems

Amazon faces many challenges and business problems, some of which are based on labor

practices, environmental sustainability, and competition from other business entities.

1. Competition In E-Commerce
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Amazon's dominance of e-commerce platforms continues to attract competition from other

platforms and traditional companies in the retail sector. For instance, companies such as Alibaba

and eBay continue to pose a threat to Amazon's dominance on the e-commerce platform.

Likewise, other smaller retailers continue to pose a threat to the company, and they are in direct

contact with the consumers, and they are gaining a lot of popularity (Lai, Liu, Xiao, & Zhao,

2022). Hence, they are providing a unique product that is more personalized as they are targeting

to impress and attract customers. This is one of the strategies that small retailers are using to

change the customer experiences that seek to challenge Amazon’s one-size-fits-all approach to

their strategy.

Additionally, Amazon has a competitive advantage as it offers a large selection of

products, fast delivery of goods, and low prices. However, sustaining this requires continuous

innovation and solid infrastructure that has been developed to attract the ever-growing customer

base. With a struggle competition, there is the issue of financial implications as profits dwindle

with time. This is a result of price wars and reduced margins. Also, reduced profit margins can

be brought about by increased marketing efforts and selections the company has to make to stay

relevant in the ever-changing landscape.

2. Labor Practices and Employee Relations

There is continued criticism of Amazon's labor practices. There are reported or actual

harsh working conditions for their employees, high turnover, and inadequate wages that have

resulted in legal challenges. These are some of the challenges that Amazon faces when it comes

to its labor practices. Amazon employees work in warehouses, which are at times considered to

be pressure-sensitive to some workers, and there are limited safety measures put in place. These

and many more issues have led to the company having to adhere to workers joining a union, and
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this has resulted in constant protests, which hurt the reputation of the company (Bird, Short &

Toffel, 2019). Thereby, the company has continued to offer and improve the working conditions

by ensuring that workers are paid accordingly and benefit from the benefits put forth by the

company. However, there is still some criticism of the labor policies that are in place. The

ongoing challenges do lead to an impact on employee productivity and morale, and in the end, it

affects the company's public image in the long run.

3. Environmental Sustainability and Corporate Sustainability.

Amazon has focused on its extensive logistical network and its fast delivery system as

they have minimal environmental impacts. Whereas the operations of the company contribute to

the carbon emission and footprint, waste generation, and energy consumption, there are plans to

reduce the emission to zero as part of the sustainability program. With the growth in physical

retail, a large network of warehouses, and a fleet of delivery vehicles, the company's carbon

footprint continues to impact the environment in numerous ways. However, with the

introduction of electric vehicles and mobility devices, there is a high chance that there will be a

reduced carbon footprint.

To address some of the pertinent environmental issues, Amazon has come into the

limelight by offering sustainable programs that touch on climate change. The program dubbed

‘Climate Pledge’ was created to show a commitment to achieving a net-zero carbon emission by

the year 2030. This is in line with the global pledge to reduce carbon footprint by 2040, which

means they will be ten years earlier. However, with a vast operation, Amazon continues to meet

some challenges that have impacted its sustainability goals. Hence, there is a need to do more to

reduce Amazon's environmental impact on the environment. This may include the investment in

renewable energy, which some of the warehouses have implemented so far. Also, they have
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invested in creating sustainable shipping and packaging practices that are geared towards green

ecosystem designs.

Research Questions

Amazon's market leadership depends on the business and marketing challenges implemented to

confront the problems laid out. Hence, formulating the research questions makes it easier to

outline the effective solutions to the analysis that will follow.

Overarching Research Question

What are some of the ways that Amazon can address the challenges related to environmental

sustainability, labor practices, and competition?

Sub-Questions.

1. What are some of the strategies that Amazon can implement to differentiate itself from

other e-commerce competitors?

2. How can Amazon as a company leverage its technological and logistical infrastructure to

become a leader in the e-commerce platform?

3. How can big data analysis be useful in implementing a customer-centric approach to

marketing and business challenges?

Aims of the Research

The research aims to investigate Amazon's problems with its marketing challenges,

especially in labor practices, competition, and environmental sustainability.

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RESEARCH DESIGN AND METHOD

The research will use a mixed methodology, which means that it will employ both

qualitative and quantitative research methods. According to Lund (2012), mixed methodology in

research is good as it offers a comprehensive understanding of the concept under study. This

means that it will be an inclusive study of how Amazon's issues impact its data and how the use

of surveys and statistical analysis will be helpful.

Rationale for Mixed Methodology

Clark et al. (2008) denote that integrating mixed methodology in research offers a divergent

perspective when analyzing data. This involves the incorporation of both qualitative and

quantitative research methods. Both have an added advantage as they offer different outcomes,

and the data collected is accurate and does not have any bias. It is one of the holistic approaches

that one can use to analyze the problems that Amazon is facing as a marketing and business

problem.

Data Collection and Analysis

Using interviews is one of the best ways to get a deeper insight into how Amazon works

and performs in the e-commerce platform. Likewise, the interviews are to be conducted via

video-conferencing and should last not more than 15 minutes. They should be recorded for

analysis and transcription purposes as posited by Best (2014). Likewise, the study will employ

surveys and secondary data to accomplish the data collection goals. Data from various sources,

such as reports, academic scholarly articles, and the company database, will be the stepping

stone for gaining viable data.

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The data analysis process will entail transitioning the collected data and triangulating it.

The data will also undergo statistical analysis, and a validity and reliability test will be performed

to understand its various aspects. A research rigor process has to be done to ensure that the

sampling method is what is needed and suitable for the study. For instance, the study will

perform a data scrutiny and use secondary data from various articles. Business reports written in

the last ten years are considered to be the latest information about the company. Therefore, the

study will have some limitations in avoiding biases that arise when using qualitative interviews

and the response rate in quantitative surveys. A random sampling technique shall be used to

distribute the survey to both the company's customers and employees. In most instances, the use

of random sampling helps to ensure that there is a true representation of the sample, and it can

allow for the results to be a true representation of the study. Similarly, the data analysis process

will inform how data is processed by using statistical techniques such as correlations, regression,

and descriptive statistics, as they help identify the trends in terms of the relationships between

various variables of the study.

Quantitative Method

This method involves the use of online surveys to collect information from Amazon's

employees and customers at large. Thus, some key hypotheses guiding the study include the

following:

1. H1: Amazon’s customer satisfaction levels are related to its competitive advantage.

2. H2: Amazon's continued poor labor practices directly and negatively impact the

employees' morale.

3. H3: Amazon's sustainability efforts are influenced by the customer's brand loyalty and

their perceptions.
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Findings, Recommendations, and Limitations

Based on the data acquired above, as well as the quantitative and qualitative methods that

were used in the study, the following are some of the key findings that were observed.

Competition and Customer Experience

Amazon is known to be customer-centric, and that is what gives it a competitive advantage over

its competitors. Also, they have a fast delivery time for products ordered on their e-commerce

platform as they have a wide range of products to offer their customers. However, other

companies are coming up that influence the market. Such competitions pose a challenge to the

company as they have mastered the art of offering customers newer experiences. Ritala, Golnam

& Wegmann (2014) note that Amazon has partnered with Apple to offer services on digital

platforms to avoid competition. For instance, Amazon's web services continue to be the business

models that offer competitors leverage in collaboration. This means that most of the competition

is either eliminated or merged to have unique products that suit the general public.

Customer Satisfaction Rate

35%

65%

Satisfied Dissatified
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Notably, competition (a collaboration between two or more competing firms) is one of

the ways that companies give better services and influence the general public. As e-commerce

platforms grow, new niches continually develop to attract new and existing customers, so

merging with other companies is the preferred choice. Based on the quantitative analysis, there is

an indication of the correlations between Amazon's competitive edge and customer satisfaction,

which can be supported by the hypothesis that customer experiences are one of the factors that

can be used to maintain an edge in the market. Hence, Jain, Aagja, & Bagdare (2017) assert that

a positive customer experience attracts and retains the customer, resulting in the attraction of

other customers. 65 percent of the customers are satisfied with Amazon customer services, while

35 percent are unsatisfied.

Labor Practices and Employee Morale

The qualitative interviews offered an elaborate labor practice that Amazon engages primarily in

warehouse operations, often regarded as negative working conditions. Many employees reported

high-stress levels, limited growth opportunities, and long working hours. The below bar graph

shows that 70 percent of the employee at Amazon are satisfied with the working environment

and the morale. While 20 percent are not satisfied with 10 percent of the population did not want

to take sides in the conversations.

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Employee Morale
80

70

60

50

40

30

20

10

0
Employee morale

Satisfied

Labor practices continue to be the stumbling block in many organizations. This can be due to

poor labor conditions and low employee morale due to poor remunerations. In the data, most of

the workers who were dissatisfied were those who have worked for Amazon for more than 10 ten

years. They have seen the best parts of the working relationships that have been implemented

and those that continue to be considered non-worker friendly. A low employee morale indicates

low productivity, which can affect the profit margin. Amazon's working approach is production-

centered, which can lead to dissatisfaction by the workforce. Hence, the findings support the

hypothesis that poor labor practices can affect the workers and result in low employee morale.

Environmental Sustainability and Corporate Responsibility

Sustainability is one of the key things that Amazon seeks to undertake as it resolves to embrace

environmental sustainability in the long run. The findings of the study are based on efforts such

as the ‘Climate Pledge’, which offers a substantial amount of how change on matters of
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environment ought to be undertaken. The data obtained from the study shows that environmental

groups and customers are not satisfied with the outcome of the pledge. Based on the graph

below, 55 percent of the total sample agreed that Amazon is on the path to achieving a

sustainable program, while 25 percent are skeptical about the move, and yet 20 percent of the

population remained neutral in the whole process.

Sustainability of Amazon
60

50

40

30

20

10

0
Positive Feedback Neutral Skeptical

The content analysis showed that the recurring theme in this section revolved around carbon

emissions, packaging, and transparency in some of the sustainability reports. For instance, the

data shows that customer perceptions play a pivotal role in ensuring brand loyalty is adhered to

and that sustainability conforms to customer perceptions. Environmental sustainability does

impact the level of customer perception, as hypothesis H3.

Yu, Hassan, & Adhikariparajuli, (2022) note that CSR and environmental sustainability

align together for Amazon. This is because environmental pollution can lead to serious damning

legal issues in places where Amazon has set camp. For instance, in Peru, Amazon continues to
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risk its casual laborers as they are sent to remove debris from hydrocarbon spills without

necessary protection gears. This, in turn, exposes them to serious harm, and this impacts the

sustainability programs that it has invested in for almost a decade.

Notably, Pairazaman et al. (2021) assert that CSR should be a long terms projects. This

study looks into Amazon's long-term development and corporate social responsibility as one of

the world's most powerful multinational businesses. In this regard, this study sheds light on how

Amazon has balanced its interests with corporate social responsibility and sustainable

development, as well as how they have addressed a number of challenges posed by economic

globalization to corporate social responsibility and sustainable development. The findings of this

in-depth research into Amazon from 2018 to 2020 reveal that the company has behaved well in

terms of social responsibility and sustainable development. Specifically, climate, environment,

carbon emissions, and other natural measures. In addition, the research indicated that Amazon

has enough expertise to strike a balance between profit and corporate social responsibility. In

response to the problems of globalization, Amazon has changed its sustainable development plan

in a timely manner, which may be utilized as a model for other international corporations.

Recommendations

Enhancing Customer Experiences

For Amazon to continue to maintain a competitive edge in the e-commerce platform, it

needs to focus on enhancing customer experiences by offering unique products. It should also be

at the forefront of ensuring that customers get personalized products according to their

preferences. Jahan et al. (2024) assert that Most websites provide different information and

characteristics regarding the goods compared to the merchandise purchased from the online

merchant. This will result in a lack of consumer satisfaction. As a result, the online vendor must
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take the appropriate measures before shipping the items to the consumer's location. It fosters a

positive perception of the online merchant and increases respondents' willingness to repurchase.

Despite being informed, people are hesitant to purchase things online due to infrastructure

shortages, lack of knowledge on ordering, and lack of trust in payment methods (Bleier,

Harmeling, & Palmatier, 2019). So, companies and online service providers must educate

consumers on purchasing products online.

Improvement in Labor Practices

Amazon should be able to address the labor issues, as improving working conditions will

help increase productivity. Rapid growth has created efficiency that impacts the workforce.

When employees have a high rate of work-related stress, it impacts how they fulfill their duties

at work. Amazon needs to enhance its employee compensation and benefits to address issues

related to labor practices (Bird, Short & Toffel, 2019). This includes using incentives such as

employee bonuses and offering workers a comprehensive health benefits allowance. This will

ensure that there is continuity and a positive working environment that supports the worker's

growth in the long term. As suggested by some of the employees, it would be right for Amazon

to consider improving the working conditions by ensuring that there are enough working shifts

and lighting in the warehouses.

Strengthen Environmental Sustainability

Amazon must take proactive measures to reduce its carbon footprint in the industry to continue

creating and promoting environmental sustainability programs (Pereira & Viola 2020). They

have to promote eco-friendly practices across all their platforms. For instance, Amazon must

ensure that it promotes the good packaging of its products by using recyclable materials. The use
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of eco-friendly materials helps reduce the world's carbon footprint. Amazon can ensure that they

use incentives for customers to help reduce the hazards in the environment.

Notably, Amazon can ensure that they optimize their logistics and transport system by

using electric vehicles. This will help in reducing fuel consumption and minimize carbon

emissions into the atmosphere. Also, they should invest in renewable energy as part of their

continued support for greener energy use. By using the above strategies, then Amazon can be on

the verge of becoming a giant that will maintain its e-commerce dominance for years to come.

Limitations

With respect to the comprehensive approach taken to study Amazon's business and

marketing challenges, several limitations still need to be considered. The limitations are part of

the study as they can be used to understand some of the constraints of the study. For instance, the

sample size is one of the limitations (Boddy, 2016). As a business entity, it is impossible to

capture a large sample population as several protocols must be in place to capture the whole

population. Amazon employees, stakeholders, and customers represent a wider populace; hence,

by capturing a single demographic may not be a full representation or whole of Amazon.

Subsequently, response bias occurs when the participants provide answers that conform

to company policy rather than their honest opinions (Mouselli & Massoud, 2018). This may

impact the accuracy of the data provided and the validity of the study's findings. Hence, response

bias affects the researcher when it comes to analyzing the data and its presentation.

Lastly, there are ethical considerations that participants must consider, such as their

informed consent and confidentiality (Khan, 2015). When the two are not addressed adequately,

ethical concerns may impact the credibility of the study. Also, ethical challenges do limit the

questions to be asked and how deep one can inquire.

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