Company In Focus: Amazon Part 2 – The Rise To Success.

Introduction:

Welcome back to “Company in Focus” – a weekly series where I discuss some of the world’s largest companies, including Google, Facebook, Amazon, Twitter and many more of the business world’s behemoths. Each company will be profiled in three sections across three articles. In the last article, we focused on looking at how Amazon (AMZN) started, the business ideas they implemented, and the problems they faced during its infancy. This week, we will be detailing Amazon’s success strategies whilst focusing on their key services such as Amazon Prime and Kindle. 

Overcoming obstacles:

In the first article, we discussed the key obstacles which Amazon faced during its infancy, including power outages and extensive fatigue amongst employees. To address the power outages, meticulously thought-out power outage plans were drafted and a restructuring of the central wiring for many of the warehouses was prioritised. Irrespective of the cost, Amazon viewed this as an investment as they had predicted that they would grow further in years to come. Since upgrading their warehouses, the frequency of power outages across Amazon warehouses decreased significantly, with the exception of a power outage due to a storm in 2012. 

The issue of employee fatigue, however, remains a pressing concern. In recent years, stories have periodically emerged about the conditions at Amazon’s warehouses – workers set extremely unreasonable targets, people dropping on the job from heat or extreme fatigue. In 2012, Jeff Lockhart Jr suffered a cardiac arrest and died after collapsing in a U.S. Amazon warehouse. 

Despite the prevalent issues concerning Amazon’s health and safety measures for its workers, the company has continued to see growth year-on-year, with latest figures predicting that Amazon’s revenue is set to hit $356bn by 2022. In the next section of the article, we will be exploring the key landmarks and services that helped shape Amazon into the behemoth company it is today. 

Amazon Prime:

In the early 2000s, Amazon grew a loyal customer base, and as a result, wanted to boost its delivery service for these customers as a token of appreciation. Amazon Prime was subsequently launched in 2005, offering unlimited two-day shipping for an annual membership fee of $79. Jeff Bezos, Amazon’s CEO, acknowledged two-day shipping as “an everyday experience rather than an occasional indulgence”. As a result of Amazon Prime’s resounding success, investors were convinced that the company could increase customer loyalty in the face of growing competition from eBay and traditional retailers. In February 2020, according to Business Insider, Amazon surpassed 150 million Prime subscribers, further evidencing the success of the service. 

Kindle:

Whilst Amazon branched out into numerous products from various sectors, they never forgot their bookselling origins. During the infancy of eBook popularity, Jeff Bezos spotted an opportunity in the market for Amazon to exploit. The Kindle was launched in 2007 and sold out within hours of release. The significant demand for the Amazon Kindle, coupled with features such as free wireless connection saw the device dubbed as “the iPod of reading”. During the early 2010s, Amazon faced fierce competition from Apple (AAPL) and Google (GOOG), and as a result, grew their smart devices department exponentially. This led to Amazon releasing the Echo speaker in 2014, equipped with the firm’s artificial intelligence system, Alexa. As of January 2021, Amazon is the global leader in the eBook sector, largely due to the success of Kindle. 

Amazon Studios:

Launched in 2010, Amazon Studios develops television shows and movies based on crowd feedback. One of their most successful films, “Transparent”, won Golden Globe awards and racked up 12 Emmy nominations in 2015

Conclusion:

The introduction of services such as Prime and products such as Kindle has been pivotal in Amazon’s success story and continue to play a significant role in the company’s operations. In 2018, Amazon became the second U.S. public company to cross the $1 trillion valuation threshold, five weeks after Apple accomplished the feat.  As articulated by Forbes, through trial and error, booms and busts, Amazon has evolved a set of guiding principles and cultural practices to keep its growth machine humming. These involve delighting customers, crushing competitors, hollowing out retail sectors and disrupting numerous industries. The company has risen tremendously since starting in a converted Seattle garage in 1994. 

Tune back into The Corporate Feed in the latter end of the month, as I discuss the future of Amazon and how the company can utilise advancements in Artificial Intelligence (A.I.) to further their status as one of the largest companies in the world. We will take a closer look at the statistical predictions for the company before highlighting the obstacles that may appear in the years to come.  

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