How Amazon.com use their Digital Channels to Achieve Success

Introduction

The Internet is one of the major areas that have developed tremendously with the evolution of information technology (IT). To cope with technological developments and to compete effectively, companies increasingly exist in the online world (Bass, et al, 2008, p. 6). As well, IT development has opened opportunities whereby customers are able to do online shopping from online stores of companies existing online, rather than going to shop in physical retail stores and shopping malls (Bass, et al, 2008, p. 6). One of the largest and most competitive companies that exist online is Amazon. Through its online business, Amazon has been able to attract a huge number of customers from over 150 countries. Amazon.com is the main website of Amazon company in which it displays its products which comprise of millions of books DVDs, music, and videos. The site also displays other products offered by the company such as household items, apparel and clothes, electronics, drugs and cosmetics, among others. These products are also displayed in websites of affiliate companies.

Based in Seattle, Washington, Amazon opened its website on World Wide Web in 1995 and operated at a loss until 2002 when it attained its first annual profit (Daft, 2003, p. 137). Since then, the company’s profits have grown tremendously and the company continues to sustain competitive edge in the online market. One of the major drivers of successful performance of Amazon has been the effectiveness the company’s management which has steered the organisation to cope with the rapidly changing market needs as technology evolves.

The main goal of this report is to analyze how Amazon.com uses their digital channels to achieve success. Specifically, the paper analyses the nature of the company’s management structure and management strategies which has helped to steer it to success. Precisely, the paper provides a description of how the management strategies have steered this company to cope with effects, influences and changes in the online business environment. In the course of this evaluation, the paper assesses the impact of IT on the company’s success. Generally, the report expresses how management theory can be utilised to enhance effective performance of modern organisations.

Amazon’s management resources and capabilities

In today’s business environment, effectiveness of an organization’s management team as well as management strategies and networks highly influence capacity for successful performance (Robinson & Menon, 2009, p. 73). As noted earlier, one of the major reasons for the successful performance of Amazon for many years has been its effective management team led by the founder and Chief executive Officer, Jeff Bezos. According to Robinson and Menon (2009, p. 73), Amazon’s management upholds four views of leadership namely; transformation view, paradigm shift, power and social responsibility. However, the company’s management has always capitalised on a transformational leadership approach which enhances good relationships within the organisation and between the company staff and online clients and consumers (Robinson & Menon, 2009, p. 73).

One of the unique characteristics of transformational leadership is that it has a positive impact on the development and performances of the followers. According to Bass and Riggios (2006, p. 42), transformational leadership skills are often not ingrained in an individual’s personal traits, but are learned. However, some individual traits make it easier for a leader to display transformational leadership behaviours. For instance, studies have shown that the trait of agreeableness is positively associated with such leaders. Another common characteristic of transformational leaders is that they have strong ability to recognise emotions of others and to understand their behaviours. As a transformational leader, Bezos has always displayed these traits and thus it is not surprising that he has been able to accomplish change in Amazon by building networks of positive relationships.

Bezos has continuously been innovating new strategies which help the company to meet its goals. His leadership focuses on inspiring company staff to believe in his as well as in their potential, to always work hard and focus on creating a better future for the company. His approach has thus created constant change in both the company and the staff as technology and market change. According to Daft and Vershinina, (2010, p. 584), Bezos’s leadership has always focused on enhancing change in the company’s mission, structure and strategy as market needs change. Importantly, Bezos has been the central figure behind the company’s continuous innovation of new products and technology, which is one of the key areas of the company’s successful performance. Bezos does not rely only on tangible rules to control specific tasks and issues within the company. Rather, he focuses on intangible qualities such as ideas, vision and shared values within the organisation to build effective relationships, find common ground to enlist the company staff and to give larger meaning to different activities in the change process.

It would not be excessive to say that transformational, visionary leadership is the real magic behind the tremendous success of Amazon.com. According to Daft and Vershinina (2010, p. 584), the passion and enthusiasm of the online business in Bezos enabled him to secure millions of dollars financing from numerous investors. As noted, the company did not perform well for several years after it was established. However, according to Vershinina (2010, p. 584), Bezos continued to inspire employees with his vision of a new and uncommon kind of retailer as the company continued to struggle. Eventually, the company managed to achieve profitability and leadership in the business in 2002. Since then, Bezos has kept Amazon innovative with bold moves. A good example of this was the move to use Amazon’s operations, logistics expertise and technology to provide services to other services to other companies and entrepreneurs (Vershinina, 2010, p. 584).

The leadership of Amazon places accountability of success in the hands of each of the company’s employees. According to Vershinina (2010, p. 584), employees of the company are rewarded for putting both their minds and their hearts in their work. Bezos spends considerable time with employees, patting backs and giving pep talks. He personally keeps on reminding employees on the front lines that they are the heart and soul of Amazon and that only through their efforts can the company succeed. As a result of this support, the company’s employees have been able to work hard to steer the company to success.

Amazon’s online strategy in the wake of IT evolution

Since the company attained command in the online business, Amazon has always focused on sustaining competitive edge through continuous .............