Amazon Innovations Research Paper
Ideation requires that the new product or process introduces some significant utility for its beneficiaries without which the idea will not be different from the existing ones. Amazon Auctions sought to provide a platform for individuals to buy and sell products online in a person-to-person model. At the time of Amazon’s introduction of Amazon Auctions in 1999, online business (e-commerce) was a relatively new phenomenon and early adopters had associated each of the few existing e-business platforms with specific products or services. Amazon was principally known for the online sale of books and any business associated with books from Amazon would have been received positively. At the same time, eBay had already established itself as the principal online auction platform for individuals selling and buying new and used stuff at bargain prices.
Amazon’s A9 distinguishing factor was the personalization of searches. Unfortunately, the search engine developers did not pay attention to the importance of web users attached to their privacy. They felt that the engine infringed on their privacy by collecting their browsing habits. In addition, the other new feature of A9 in displaying results in different panes was not appreciated by the users. Eggink (5) emphasizes that innovation must take into account the preferences and needs of users for it to offer any utility. According to Phau (78), fashion-conscious individuals are very selective and conscious of class and distinction. Consequently, they are sensitive to sellers without reputation in the industry. Amazon was not known for fashion business and it was difficult for its fashion-savvy subscribers to switch to the online giant for their fashion needs.
Instead, they stuck to Zappos and other known platforms including brick-and-mortar fashion shops. The implementation of the product was also not supportive of the success of Endless. The Fire Phone featured a new operating system that was incompatible with widespread apps, making it a restrictive buy when customers wanted to have all their needs met in one point. In addition, the price of the phone was high compared to the intended competitors the iPhone and the Galaxy. The price was necessary because of the high cost of development that went into it. The huge cost led to the biggest loss the company had posted in 14 years. The failure to manage development costs and subsequent pricing that helped prevent the uptake of the phone was an innovation failure in terms of costs.
First, the fundamental factors are in favor of Amazon in the view of any logical investor. Fundamental factors are the visible and existing circumstances and conditions that are favorable to the business. Amazon’s business model is unique and the company has built a niche in its field as the leading e-commerce platform. The global uptake of the internet promises that the model will be sustainable in the future. Besides, internet and mobile phone penetration have not reached saturation in many places. com, Jeff Bezos identified the opportunity of selling fashion apparel online because the market existed and Amazon had the internet infrastructure need to facilitate the business. On the other hand, the challenge arose in the consciousness of the fashion-savvy market to the dealers where they purchased their apparel.
Jeff failed to recognize the strong attachment that fashionistas to the reputation of the seller in the fashion industry. This recognition would have helped him select the option of collaborating with or acquiring Zappos from the beginning. The development phase involves identifying the alternatives available. The purpose of any business is to earn profits to multiply the wealth of the investors. Amazon needs to grow its capitalization and to expand its business beyond the current levels. The expansion is only possible if the firm generates profits. Furthermore, continued failure to pay dividends will reduce investor confidence in the company and the share price could fall in future. The importance of generating profits, therefore, is critical. Another option for Amazon to generate profits is to improve the efficiency of its systems.
Efficient systems save time and increase turnover that offers the business more opportunities for generating profits (Couto, Plansky & Caglar, 48). For instance, delivering orders within an hour opens the warehouses for more orders to be stored and generates more business. The principle of selling more to generate more profits is a long-known business strategy. While Amazon’s strategy towards this has been the price advantage, an improvement of its system efficiency can generate the same results with higher prices. Besides, the rules regulating the use of drones vary in different countries and Amazon will face challenges using this distribution system in many countries. Nevertheless, it is a worthwhile option to consider. Works Cited Ahmed, Anwar & Bwisa, Henry & Otieno, Romanus & Karanja, Kabare. ”Strategic Decision Making: Process, Models, and Theories”.
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