Running Head: Amazon Case Study: Working Capital and Valuation 1
Running Head: Amazon Case Study: Working Capital and Valuation 1
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AMAZON CASE STUDY: WORKING CAPITAL AND VALUATION 2
However, the company is more than a book store and has experienced an evolution from an
online bookstore to an E-commerce website with integrated systems. Online retailing constitutes
the company's core business. Amazon has also become a significant player in the electronic
device market with substantial investment in cloud computing services. It has integrated the
different components of its business using complex technology. The evolution of Amazon has
made the online retailing sector grow exponentially and have a presence in different parts of the
world. The company has developed important metrics to evaluate customer satisfaction. Such
mechanisms help evaluate both the customer's and sellers' behavior to understand the different
areas in the organization that has been improved. The company delivers products, but integration
enables it to offer customers more incentives than other companies making it more competitive.
For instance, a subscription to Amazon prime membership also affords the customer some
Kindle library e-books. The company has also made some successful and strategic acquisitions to
bolster its services and to remain competitive. For instance, the company acquired companies
such as Brilliance Audio in 2007 and Audible.com in 2008 to enhance its service. Currently,
Amazon has become one of the most influential companies in the world. Principally, the
company's convenience and products have made its stocks skyrocket, making it one of the
world's most successful companies. For every company to be successful, it must develop strong
leadership structure, understand its capital structure, and strategies to leverage financial strength
company's innovation. Principally, the lack of presence of task structure affects the rate at which
the company can innovate and generate new ideas. Wilson argues that an organization's diversity
is crucial in ensuring innovation since members will conceive significant innovation. Amazon is
one of the companies that has a structure that ensures innovation through team processes and
diverse projects.
Amazon has adopted a hierarchical organization structure. As a result, it has three CEOs
and senior vice presidents responsible for heading and overseeing different essential business
operations. They report directly to the CEO Jeff Bezos. The business's immense size has created
the need to develop a comprehensive hierarchical corporate structure since the company has
become one of the largest employers in the world, employing more than 600,000 people
worldwide. The company also has a reliable form of flexibility, enabling it to adapt to frequent
external market changes (Dolata, 2017). Due to rapid innovation in online trading and marketing,
the industry experiences high levels of disruption. Most companies with a hierarchical
organizational structure find it hard to be flexible enough to deal with such disruption. However,
Amazon's visionary leadership has made it easier for the company to adapt to the disruption and
ensure competition.
way, the company focuses on integrating small teams to handle a wide range of business
operations. The Pizza Rule, introduced by the CEO, encompasses a vital principle that small
teams, which could be fed using two pizzas, should hold meetings. The organizational structure
has significantly contributed stable leadership and management, especially at the top level.
AMAZON CASE STUDY: WORKING CAPITAL AND VALUATION 4
Specifically, the company has managed to retain its top talent, and there has been little turnover
Amazon has a list of principles that employees within the company, starting from the
executives to lower-level employees, must follow. The fundamental principles include Customer
Obsession, Invent and Simplify, hire and develop the best, Insist on high Standards, think big,
and deliver results. The corporation has been built around the principles that ensure customer
satisfaction (Tritt &Teschner, 2019). Building around such principles has made Amazon be the
superpower company it has become. Since its inception, the CEO Jeff Bezos has built and
implemented a structure that ensures innovation and prosperity by providing guidelines for each
employee to strive. The company principle of ensuring the customer comes first has enabled it to
be disruptive and change different business segments making it very competitive in different
multitude and dominance in various sectors. One of the reasons for the company's extreme
Customer Obsession
Customer obsession is the foremost leadership principle of the company. The company's
focus is to work to ensure the end customer's satisfaction. The company’s culture of focusing
various products, such as Amazon Kindle tablet. The company CEO Jeff Bezos in an interview
in 1999, stressed the need for the company to be a customer-centric company. The company
obsession is with the customer value rather than the stock value. The company stresses the need
to deliver value to the customer rather than fulfilling other corporate goals. The company's focus
is on ensuring shared responsibility to focused on the customer. Amazon has also adopted agile
AMAZON CASE STUDY: WORKING CAPITAL AND VALUATION 5
management that encompasses a pervasive customer-obsessed mindset that runs from the top
management, sales associates, and marketers (Culpepper & Kathleen, 2020). The company
requires everyone to enhance the impact of what the customer does and its decisions to focus on
focused customer metrics. Customer metrics are built in every aspect of the company, and the
management requires an extensive review of documentation concerning how decisions affect the
customers. The obsession with customers leads to better ideas since it enhances communication
and feedback with the customers. Customer reviews are taken seriously, thereby creating a
much-needed clarity of ideas in the company. Better conversation and interaction with the
customers enhance the company's ideas and help identify the specific areas where innovation and
design calibration are needed, thereby ensuring its growth and development.
Competency
The company has spent billions of dollars over the years in building sustainable
infrastructure and technical knowledge. Amazon has one of the most extensive and reliable
competencies that ensure E-business solutions' continuous development. The initiatives to drive
the firm up and satisfy the customers have made Amazon more experienced and better
understand the E-commerce market. The company has a substantive competitive advantage over
other firms. Investments in various competencies highlight the dynamic capability of Amazon
that ensures an open innovation strategy. Large companies have a robust knowledge base and
value network that makes them easier to develop and acquire various competencies than SMEs
(Lima & Carlos 2017). The company competency has led to the development of service
technologies that are language and environmental neutral, thereby enhances application
integration (Denning, 2019). Open innovation enhances robust responses to systematic issues
and creates a better relationship with customers and business partners. The company has to build
AMAZON CASE STUDY: WORKING CAPITAL AND VALUATION 6
reliable web services centered on solid innovation models that enhance communication and
Conclusion
control on customers and the organization. Additionally, the company's adherence to business
diversification in an aggressive manner has made it easier for the organization to remain
dynamic. Moreover, the solid organizational structure has made the company easier to adapt to
regulatory and market changes in a more effortless manner. The evolution of technologies has
also contributed to its growth and development as it plays an essential role in creating a
connection with the established environment. The company has been useful in ensuring users'
satisfaction by being an essential player in providing e-services and digital devices. The
evolution of the company’s technology has also provided a reliable platform where there is
sufficient infrastructure to ensure the supply of commodities required by the different internet
users. The company's infrastructure has made it possible to develop a platform where a supplier
can turn into a partner or a consumer. The company continues to reconfigure its businesses in
new and innovative areas such as E-commerce. It uses the same technology to develop
References
Culpepper, P. D., & Thelen, K. (2020). Are we all Amazon primed? Consumers and the politics
Denning, S. (2019). How Amazon uses metrics to drive success. Strategy & Leadership.
Lima, V. A., & da Silva Müller, C. A. (2017). Why do small businesses innovate? Relevant
300.
Tritt, L. F., & Teschner, R. S. (2019). Amazon Delivers Diversity: Geographical & Social