Risks in the management of Amazon Assignment Sample

Amazon's Global Operations and Strategies for Managing Supply Chain Risks

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Introduction of Risks in the Management of Amazon Assignment

Amazon is a multinational company which operates in various countries like Asia, the US, Australia, Africa, etc throughout the world through online marketing mediums. The company provides a large variety of products and services to the customers in association with self manufactured products as well as different brands (Galuchi, Rosales, and Batalha, 2019). The company has been able to achieve the competitive advantage in the online marketing world through its effective strategies of providing high quality products at the lowest possible prices. Apart from this, the company also has advanced technological systems such as artificial intelligence and cloud based computing which helps it to attain the real time data of the customers according to the changes in the trends in the marketplace.

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However, the highly skilled workforce helps to maintain high performance and productivity in the internal structure of the company and they are also able to address the challenges through which its profit margin is sustained for the long term (Huang, Obada-Obieh, and Beznosov, 2020). In this case, the report will provide a brief information on the main risks faced by the managers of the company to enhance the strategic planning as well as will also discuss the important measures that can be helpful for the company to retain its growth or sustainability in the competitive world.

Literature Review

As per the study of Sodhi, nd Tang, (2021) it was noted that with the growth in the strength as well as opportunities of the company, it has to face a lot of risks due to the emerging competitors in the marketing environment. One of the most crucial risks faced by the company in this case includes the competitive pricing strategy which is set up by the competitors like Target and Walmart to gain new customers as well as to retain the interest of the existing ones. For example, Walmart provides shampoo and trickery to the daily customers at a high quality at a much cheaper rate than Amazon through which the perception of the audience base attracted to Amazon has decreased from the past few years as per Dutta et al., (2019). This can not only reduce the customer base for the company but the managers will also be unable to achieve the objectives and mission of the company into various developing as well as emerging markets. According to Dutta et al., (2019) on the other hand, the company is also facing certain issues in maintaining its data driven approach as most of the websites do not provide security to its customer data. In relation to this the risks of data breaching can also be related to the company through which its operational activities can be hampered. Due to the improper performance of the cloud computing system the company can also face risks of poor retention of the customers as the quality of the services provided to the customers can be lowered from the study of Galuchi, Rosales, and Batalha, (2019). This can also damage the infrastructure of the company through which damaged products might be provided to the end users. Sometimes the huge amount of data collected by the managers of the company to enhance the strategic planning with the help of the big data analytics can also lead to total closure of the activities as it is associated with the risks of complete damage of the technological system in the company as per the study of Huang, Obada-Obieh, and Beznosov, (2020). However, this can also lower the potential of the company to maintain its competitive edge as well as its growth through which the rate of return on the company’s investment might be reduced for the long term.

Another potential risk which is associated with the company and can lower its performance in the competitive marketing world is the malfunctioning of the infrastructural mechanism. In relation to this sometimes the employees are able to perform efficiently according to the change in the customers needs and desires through which the productivity of the company is lowered as per Sodhi, nd Tang, (2021). Apart from this, the new as well as the existing employees also face various issues on the basis of the innovation of the technological system in the internal structure of the company through which its long term goals cannot be achieved. In this case, the managers should consider the choices of the employees while implementing any new software or tool in the workplace of the organization through which the hindrances in the customer services can be mitigated according to Dutta et al., (2019). For example, the chat bot system can sometimes be inappropriate for tracking and addressing the feedback of the customers through which their needs cannot be resolved on time and further issues in customer preferences can be presented in the company which can damage its position in the competitive world for the long term. However, the use of malicious data can also damage or insecure the interface of the company through which the efficiency of the software can be reduced and the huge network maintained by the company can be hampered by the study of Rikap, (2022).

As the company follows the customer centric approach changing the internal structure as well as activities according to their needs is quite crucial for the managers of Amazon because the operations are aligned with the basic principles of success as per Zhu, and Liu, (2018). The globalization of the company in relation to this is equally responsible for increasing the risk of poor retention of the employees in the company through which the adoption of the digital technology as well as innovative products or services are becoming impossible. On the other hand, the company also had to follow the green practices in order to stay sustainable in the marketing environment but the employees find it difficult to improve their delivery of the customer services and to expand the audience reach. According to Rikap, (2022) the Amazon Web Services (AWS) model implemented by the company to enhance its supply chain activities and management in this case is also surrounded by various risks. This includes the lack of information on the privacy policy of the customers and the improper presence of the reputation of the company in the competitive marketing world through which its profit margin is constantly decreasing from the past few years. Furthermore this also increases the waste of the products manufactured or supplied by the company to the wholesalers or the end customers through which a huge amount of investment on the raw materials can be created noted from the study of Zhu, and Liu, (2018). This can also lower the performance of the manufacturing department of the company through which the designs of the products can be hampered as well as the needs of the customers can be addressed on time.

As Amazon is a multinational company it has a large base of diverse workforce including expats from various other countries who stay away from their home town in order to serve the company. This further leads to the issues of misconception and poor engagement among the employees in the internal structure of the company which can increase the risk of conflict dynamics as per Esper, (2021). The difference in the ideas as well as perception among the employees can also lower the rate of high performance among the employees through which their personal growth and the opportunities of the company cannot be maintained in the long term. In relation to this, the human resource department of the company is also unable to enhance the management of the diverse workforce as the workplace culture is totally changed through which the commitment of the employees rewards the common goals of the company is also reduced. This issue can not only decrease the profit margin of the company but can also reduce its customer reach and competitiveness for the long term. According to the study of Anica-Popa et al., (2021) the inefficiency of the human resource managers can also cause poor mental health of the employees through which the rise in the risks of disorders as well as improper performance can be created in the workplace of the company. This can also create an improper balance between the work and personal life of the employees which can further contribute to generating the risk of poor organizational culture.

Lastly, as per the study of Anica-Popa et al., (2021) it was noted that the presence of the bad bots in the company such as improper artificial intelligence can lower the shopping experience of the customers in the marketing world through which the profit margin of the company is lowered. The negative impact of COVID 19 has led the managers of the company to implement a large variety of software such as DDoS and external hard drives which can damage the server capability and can also create issues in the inventory management of Amazon as per Esper, (2021). In relation to this as the data recovery requires a lot of time this can also lower the strategic planning of the company through which the security risks can be created in the workplace of the company.

Analysis and discussion

The literature on the risks associated with the performance as well as sustainability of the company shows that there are various problems which the company is facing due to an increase in the threats of the new comets in the marketing environment. The overall view of the risks are provided below:

Risks ID

Risks

Likelihood

Mitigation strategy

Technologies Required for the mitigation plan

001

Threats of the malware

High

The antivirus software must be implemented by the managers of the company and should also ensure that the employees are aware of the issues

The anti- Malware can be implemented by the managers such as Malwarebytes which can help to provide cyber security for the real time data (Goldberg et al., 2022).

002

Lack of high performance

High

The company should recruit an experienced human resource manager to enhance the engagement of the employees

The software for checking the background of the individuals and to monitor their performance can be helpful for the company (Goldberg et al., 2022)

003

Customer data theft

Medium

The managers of the company should limit the access of the employees towards the customer data to reduce the issues of breaching and theft

The two factors authentication should be implemented by the managers which can check the access of the employees towards important resources or data

004

Bad bots

Low

The website of the company should be secured which can also help toe hence the customer experience (Anica-Popa et al., 2021)

The implementation of blocking bad software as well as honeypots should be implemented by the company to verify the customer reach and shopping experience

005

Miscommunication

High

The implementation of site protection for the clients can be helpful for the managers of the company to reduce these type of risks

The unauthorized clients should be blocked by the help of the block software through which the data recovery strategies can be enhanced in the company

006

Hijack of customer journey

Medium

Providing timely training sessions can be helpful to enhance the engagement among the employees

The project management software can be used for ensuring better coordination among the employees (Goldberg et al., 2022).

Table 1: Risk Assessment of Amazon

(Source: Created by the Learner)

From the above table it can be noted that the risk associated with the performance of the employees can be highly threatening to the company as it decreases the customer retention in the company for the long term. In relation to this, the managers of the company should hire a manager who is highly skilled and experienced so that he is able to manage the needs of the diverse workforce at a particular time and is also able to maintain high productivity in the internal structure of the company (Anica-Popa et al., 2021). However, the recruitment of the manager should be done on his skills and knowledge on different management theory through which the retention of the employees base with proper work culture can be maintained. In relation to this, the Human resources managers of the company should be able to maintain an open communication with the entire workforce so that they are able to work freely which can further reduce their mental illness in the workplace (ELHAZZAM, and AISSAOUI, 2020). This can also encourage the employees to enhance their commitment in the internal structure of the company through which their personal development can be increased as well as an enhancement of their work-life balance can be noted. Apart from this, it can help the employees to provide extra effort in enhancing the quality of products or services provided by the company to the employees through which it is able to retain the competitive edge for the long term (Goldberg et al., 2022). Furthermore, the HR manager should be able to hire the employees as per the job role of the company through which they are able to work efficiently whether traditionally or remotely.

On the other hand, the managers of the company should train the existing as well as the new employees efficiently as per the changes in the integral structure through which they will be able to address the challenges and can innovate new products to attract the customer base in the competitive marketing world (Jamali, 2022). The training sessions can also help the employees to enhance their coordination with the high performance technological system through which the issues of misconduct can be resolved for the long term. In relation to this, the managers should also implement the innovative software according to the requirements of the company through which the conflicts among the diverse workforce can be resolved. The appropriate knowledge of the software or the tool acquired by the managers can also help the subordinates of the company to enhance the interest of the stakeholders through which their issues can be solved on time (ELHAZZAM, and AISSAOUI, 2020). This can further help the employees to use the resources properly so that the issues of waste can be mitigated and the aspects of expansion can be maintained.

However, due to an increase in the competition from the companies like Target the managers of the company should focus on the low cost strategy to improve its profitability. In this case, the company can stick to the new brand such as Mamaearth so that the quality of the products cannot be compromised and a high shopping experience can be maintained (Barth-Obi, 2022). On the other hand, the managers of Amazon can also collaborate with the online stores like Shein to provide new fashionable clothes as well as apparels to the audience according to their changing needs and demand. This can further help the company to enhance its network through which the customers from every corner of the world will be able to increase the competitiveness of the company in the global market (Walker, 2022). On the other hand, the managers of the company should also increase the supply base through which the cost of delivery of the products can be reduced in association with a reduction in the bargaining power of the suppliers. This can also help the company to deliver the products timely which can further enhance their rate of retention for a long period of time. It can also increase the sales volume of the company and can also create a positive position in the competitive world (Jamali, 2022). The strategy of diversification of products can also help the company to enhance the customer base through which a strong brand loyalty can be maintained in the competitive world.

Lastly, to mitigate the issues related with delivery partners of the company the managers should improve the services and should leverage the network with a third party provider through which the expansion in the global market can be done efficiently (Umar, 2022). The replacement to the third parties can also help the company to provide free delivery of the products to the trusted customers by the shift in the costs of the products through which the sustainability of the company can be fixed in the emerging as well as the developing economies. This could also help the company to improve its physical presence around the world and in the next five years Amazon can enhance its rate of return on the investment by 25% in different locations all over the world (Barth-Obi, 2022). In relation to this, the company should also adapt to the physical stores in association with the online marketing base so that it is able to reach the customers perception and can provide a tough competition to the companies like Alibaba with both self manufactured and branded products.

Conclusions/recommendations

From the overall study it can be concluded that Amazon is capable of obtaining its long term mission of maintaining the position of world’s largest online retailer by gaining the positive views of the customers if it is able to reduce the risks in its internal as well as external management. In this case, it was also noted from the study that the main risks associated with the company includes the improper management of the employees which further gives a chance to the other companies to attract the customer base. However, the managers of Amazon can implement tools and advanced technology like artificial intelligence and fire bolts to analyse as well as save the customer data from breaching (Lopez Palomino et al., 2021). This can further help the managers to enhance the strategic planning of the company in the marketing world for the long run. This can also help the company to meet the expectations of the latest consumer trends through which the chances of the reduction in the profits can be resolved. However, the backward integration process can also acquire control over the suppliers which can further help the company to reduce the threats of the new entrants in the marketing economy (Taghipour, and Merimi, 2021).

References

Anica-Popa, I., Anica-Popa, L., R?dulescu, C. and Vrincianu, M., 2021. The integration of artificial intelligence in retail: benefits, challenges and a dedicated conceptual framework. Amfiteatru Economic, 23(56), pp.120-136.

Barth-Obi, C., 2022. Crisis management: prevention, diagnosis, and intervention On basis of Amazon Inc (Doctoral dissertation, Private Higher Educational Establishment-Institute “Ukrainian-American Concordia University”).

Dutta, P. and Dutta, P., 2019. Comparative study of cloud services offered by Amazon, Microsoft & Google. International Journal of Trend in Scientific Research and Development, 3(3), pp.981-985.

ELHAZZAM, M. and AISSAOUI, F., Crisis Management and Strategic Responses of Amazon company to COVID-19 Pandemic.

Esper, T.L., 2021. Supply chain management amid the coronavirus pandemic. Journal of Public Policy & Marketing, 40(1), pp.101-102.

Galuchi, T.P.D., Rosales, F.P. and Batalha, M.O., 2019. Management of socioenvironmental factors of reputational risk in the beef supply chain in the Brazilian Amazon region. International Food and Agribusiness Management Review, 22(2), pp.155-171.

Goldberg, D.M., Khan, S., Zaman, N., Gruss, R.J. and Abrahams, A.S., 2022. Text mining approaches for postmarket food safety surveillance using online media. Risk Analysis, 42(8), pp.1749-1768.

Huang, Y., Obada-Obieh, B. and Beznosov, K., 2020, April. Amazon vs. my brother: How users of shared smart speakers perceive and cope with privacy risks. In Proceedings of the 2020 CHI Conference on Human Factors in Computing Systems (pp. 1-13).

Jamali, A.F., 2022, October. STRATEGIC MANAGEMENT OF THE AMAZON COMPANY DURING THE COVID-19TH PANDEMIC PERIOD. In Archive of Conferences (pp. 170-176).

Lopez Palomino, B., Muñoz Mendi, J., Quevedo Vallejo, F., Monje Micharet, C.A., Garrido Bullón, L.S. and Moreno Lorente, L.E., 2021. Path planning and collision risk management strategy for multi-UAV systems in 3D environments.

Rikap, C., 2022. Amazon: A story of accumulation through intellectual rentiership and predation. Competition & Change, 26(3-4), pp.436-466.

Sodhi, M.S. and Tang, C.S., 2021. Supply chain management for extreme conditions: research opportunities. Journal of Supply Chain Management, 57(1), pp.7-16.

Taghipour, A. and Merimi, M., 2021. Digital Transformation of Supply Chains during Crisis: COVID-19. In 11th Annual International Conference on Industrial Engineering and Operations Management, IEOM 2021 (pp. 7493-7501).

Tamym, L., El Oaudghiri, M.D., Benyoucef, L. and Moh, A.N.S., 2020, November. Big Data for Supply Chain Management in Industry 4.0 Context: A Comprehensive Survey. In 13ème CONFERENCE INTERNATIONALE DE MODELISATION, OPTIMISATION ET SIMULATION (MOSIM2020), 12-14 Nov 2020, AGADIR, Maroc.

Umar, A., 2022. Evaluation of management effectiveness in the organization (On the basis of Amazon Inc.) (Doctoral dissertation, Private Higher Educational Establishment-Institute “Ukrainian-American Concordia University”).

Walker, S.P., 2022. The Peruvian Amazon Company: An Accounting Perspective. Enterprise & Society, pp.1-26.

Zhu, F. and Liu, Q., 2018. Competing with complementors: An empirical look at Amazon. com. Strategic management journal, 39(10), pp.2618-2642.

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