Amazon Inc. - Creating a Unique Retail Haven in a Competitive Market - Essay Sample

Introduction

According to Manjoo (2020), Amazon Inc. has created a retail haven that protects itself from stringent regulations compared to other industries. The article acknowledges the business practice adopted by Amazon, addressing the various programs and services offered by the company (Manjoo, 2020). It has diversified its operations to include the sale of various products as it expands its I.T. infrastructure and customer market. The company created a unique environment that has grown significantly. Its numerous activities and dominance in various industries have created antitrust issues with the FCC (Federal Trade Commission), creating inquisitions into regulating the company (Manjoo, 2020). Though the review was focused on Amazon's acquisitions in the past decade, they are also to include other giants in the technology industry, namely, Alphabet, Facebook, Microsoft, and Apple.

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However, the article identifies Amazon Inc. as presenting government agencies with a unique case. The company is too big and powerful and is still growing. The company's vast size and increasing customer base create vast concerns of how it would warp the American as well as the global economy if it falls (Manjoo, 2020). Additionally, the company's vast size and speed of growth have also resulted in numerous cased of banned, unsafe, counterfeit, and low-quality products. Currently, the company's economies of scale have given it a monopoly take on the American online retail market (Manjoo, 2020). The only viable competition is from Chinese online stores, such as Alibaba. Regardless, the company has taken advantage of its resources and reduced the pricing of numerous commodities, further strengthening its hold on the American economy. Finally, the author addresses the notion that the benefits that Amazon Inc has brought to online buyers are immense that it has blinded the public on the potential harm.

Start

Amazon started as a book retailer and diversified to its current stated, offering millions of products to its customers globally. In 2019, the company accounted for nearly 5% of U.S. retail sales. However, in e-commerce, the company accounted for approximately 38% of sales in the same year (Manjoo, 2020). The company has directly and indirectly affected the inflation rate. Without the need for the reliance on physical stores, the company augmented its cost savings, giving it a competitive advantage. The company's growth and influence on the various industries have created financial concerns. The company already controls the e-commerce industry and is among the largest employers in the country (Khan, 2018). It has offered numerous employment positions in its various companies to support many states.

Finally, the company has FBA (Fulfillment By Amazon) logistics department has integrated itself with the American economy in a manner that should raise concern. The company handles both the delivery requirements of the client as well as the logistics requirements of the merchants (Khan, 2018). The department is highly effective, and it has contributed to the growth of the company's market base. From an economist perspective, monopolies suppress innovation, affects wages and offers fewer choices to consumer (Khan, 2018). Though the company is massive, with control in various industries, it cannot be investigated for an antitrust violation. The company fails to meet the requirements of a monopoly under the U.S. Department of Justice. The company must have a market share of over 50% for government intervention to be instated.

Conclusion

In conclusion, Amazon is a company that is growing at a rapid pace and is creating economic worries for various critics and government agencies. It has taken a more significant percentage of market share in various industries, specifically retail and cloud computing. Though the company is not yet a monopoly, it should be addressed as its economic consequence is evident.

References

Khan, L. M. (2018). Its Challenge to Current Antitrust Law. Digital Dominance: The Power of Google, Amazon, Facebook, and Apple, 710, 805.

Manjoo, F. (2020). The Trouble With Breaking Up Amazon? Its Online Store Is So Good. Nytimes.com. Retrieved 14 April 2020, from https://www.nytimes.com/2020/02/12/opinion/amazon-regulation.html.