Amazon is a company in the United States that deals with the provision of online shopping services. It has three business segments that it operates in and which include international, North America, and Amazon Web Services. The North American section includes retail sales of consumer products where the customers can subscribe through the company's websites such as www. Amazon.ca and www. Amazon.com (Onyusheva & Seenalasataporn, 2018). The international section offers subscription through the internationally-focused websites and offers retail sales of consumer products. The amazon web service deals with the global sales of computing, database, storage, and provides services for startups, government agencies, enterprises, and academic institutions. The company was founded in the year 1994 by Jeffrey P. Bezos, and its headquarters are in Seattle (Onyusheva & Seenalasataporn, 2018). The company has four main objectives that guide it, which include a passion for invention, customer obsession, and not competitor focus, long term thinking, and commitment to operational excellence. Through having a positive impact on the customers, the company has managed to be a leading firm in the delivery of online services.
Several factors have led to the obsolescence or dissolution of notably selected market domains in the recent past of the Amazon company. These factors include both the inhibiting and enabling factors. Obsolescence refers to the risk that some of the products and services offered by a company will become obsolete and no longer able to be competitive in the market. It, in return, leads to a reduction in the profitability of the company. These factors also have an impact on the operations of the company. This paper looks at some of the elements and how they influence the company.
There is a lot of change observed in the current world that leads to the obsolescence of products and services offered to customers. Obsolescence can either be planned or unplanned. The rapid advancements in technology have seen televisions turn into smart TVs, phones into smartphones, and computers become laptops. Change is always occurring now and then. These changes have an impact on how the amazon company operates, given that it deals with the delivery of such products. The company has to make decisions on whether to stay updated with the technology or not. However, for a company like Amazon faced by thousands of businesses, it has to always comply with the rapid changes. Here are some of the factors leading to the obsolescence of services and products offered by Amazon.
Technology advancement can get considered as the first and the most important of all the factors faced by the Amazon company. The company is a software business that offers its services to other companies and has vendors offering different types of services. There are chances that with technological advancement, the services provided to the vendors and other businesses by amazon may not be valid in case they have already upgraded their software. It makes the services offered by Amazon to be obsolete as they are not in line with the current trends. This factor is an inhibiting factor to the growth of the company. It, in turn, leads to the need of the company to upgrade its systems and services.
Another factor affecting the obsolescence of services offered by Amazon is the political aspect in which the business operates. Amazon works alongside a lot of political influence. The political element affects the remote and macro environment through which the company works in. Some of the political aspects that make the services offered by amazon obsolete in a given region are as follows. The political stability of the country that the company operates in, mainly European countries and the USA, is the first political aspect. It refers to the opportunity that services offered in these countries will be useful to the people, which in turn will be profitable for the company. The second political factor is government support for e-commerce. Since amazon deals with helping startup companies, the government of the countries that it works in should be able to support start-up businesses; otherwise, the services will be obsolete. The increase in government efforts on cybersecurity is another factor that will enable the company to remains relevant as it is an opportunity to grow its services of counteracting cyber insecurity.
Another factor that affects the obsolescence of the amazon company is the economic factor. The performance of amazon depends on the financial situation of the places it operates in, both online and non-online businesses. Economic factors affect the changes and trends of the company affecting its performance. First, the financial stability of the developed countries affects the obsolescence of the services Amazon offers, which is an enabling factor. Another enabling economic factor is the increase in disposable income in developing countries as people will be willing to buy more products from the firm. An economic inhibiting factor is the potential economic recession that will limit how people will buy products.
Another factor influencing the obsolescence of services and products offered by Amazon company is the social factor. The human element has a lot of influence on the performance of amazon as a leading provider of information technology products and services and as an online retailer. An inhibiting aspect of social factors is the increase in wealth disparity. Enabling elements of the social factor include an increase in online buying habits and increased consumerism in developing countries.
Another factor affecting the obsolescence or dissolution of the Amazon company is the environmental factor. Although Amazon is mainly an online business, it also experiences some ecological influence that affects its performance. The first environmental aspect that affects the obsolescence of amazon is the rising interest in environmental programs, which is an enabling factor for the firm. Another enabling aspect is the increasing interest in the sustainability of the business, and the last element is the rising popularity of the low carbon lifestyle.
The last aspect affecting the dissolution and obsolescence of the Amazon company is the legal factor. The company must comply with all the legal requirements of the countries in which it operates. Failure to do so may lead to the closure of the company in these countries. Some of the enabling aspects of this factor include rising product regulation, changes in export and import regulations, and increasing protection regulations on businesses.
The factors affecting the obsolescence and dissolution of the amazon company have some implications on the performance of the company leading to innovation and change in the business. First, the effect of rapid technological change is enormous. It leads to the need for the company to continuously improve its technical aspect. It can get observed as an opportunity for the company to optimize its performance. For example, continuous substantial investment in corporations can boost the competitive advantage of Amazon, which in turn protects the business from new entrants (Canter & Gomez, 2017). There is also the chance for Amazon to improve its performance based on increased efficiency in IT resources. For example, new technologies in computing can minimize operational costs hence maximizing online retail productivity. Cybercrime, on the other hand, threatens the integrity of the company as well as the experience of the customers. For this reason, the company has to advance its technologies continuously.
The political factor also has some impact on the performance of the company in terms of innovation and opportunities for change. Political stability is of great importance to the success of the amazon company. It provides an opportunity for the firm to grow and develop its products and services in developed countries. It is also an opportunity for diversification for the company through innovation. Government support for e-commerce businesses gives the business a cutting edge allowing for its expansion in relevant markets (Amankwah-Amoah, 2017). However, it is also a threat to the company as it encourages competition from other companies. Governments involved in the fighting of cybercrime provide an opportunity for Amazon company to grow its resilience in remote environments.
The other factor that has an impact on innovation at the amazon company is the economic factor. The commercial success of developed countries provides an opportunity for Amazon to increase its levels of innovation in information technology. It, in turn, reduces the risks of retail business expansion for the company. The financial performance of the company gets boosted by increased disposable income in developing countries. The economic recession of china has a substantial negative impact on the performance of the company, given that China is one of the largest markets of amazon products and services.
Social factor has some impacts on the innovation and opportunities for change in the Amazon company. The first impact is seen in the increased wealth disparity, which refers to the increasing gap in wealth between the rich and the poor. It harms the opportunities of Amazon growth as it may lead to stagnation of the remote environment of the business. An increase in the level of disposable income, on the other hand, is an opportunity for the company as it may increase the revenue of the company. Increased consumerism also improves the growth of the IT service business and e-commerce. It, in turn, provides a competitive advantage for the company and offers intensive strategies for the growth of the firm. The company can then benefit from increased online buying with more people across the world willing to buy products through the internet.
Environmental factor has some impacts on the opportunities for change and innovation for the company. Amazon has the chance to improve its impact on the environment due to the rising interest in environmental programs. It is because of the increasing interest in mitigating ecological challenges such as energy consumption and waste management. By playing a role in improving the environment, this can improve the brand image, which is an opportunity for the growth of the company. An increase in the popularity of low carbon lifestyle also boosts the image of the company as a leading firm in protecting the environment.
The legal factor also has some impact on the opportunities for change and innovation of amazon company. Consumer security and safety has led to the need for rising product regulation due to the demands made by society. It, in turn, helps the company reduce the sale of counterfeit products on its online retail website. Changing regulations on exportation and importation provides a growth opportunity for the company. For example, through innovation, Amazon can expand its global market to take advantage of the increased ability of sellers to access overseas customers (Lincoln & Andrew, 2018). Such opportunities ensure long term success of the company by complying with regulations.
Amazon is still considered to be the leading company when it comes to the online retail market. The company has shown that it has a competitive advantage over other retail companies such as Walmart. The paper has indicated some of the factors affecting the amazon business and the impacts of these factors. The company should hence look for ways to expand its market to developing markets. By addressing the inhibiting factors to the enhancement of the company, amazon can gain more growth through innovation.
Amankwah-Amoah, J. (2017). Integrated vs. add-on: A multidimensional conceptualization of...
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