Amazon - Customer Value Term Paper

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Political/Legal

There are various compliance laws that Amazon abides by in order to protect its consumers and employees. Its website offers an extensive policy overview, standard participation agreement, and details on other regulations. One regulation Amazon abides by is IRS Reporting Regulations on Third-Party Payment Transactions (Amazon). This means that certain Amazon sellers must file taxes for those sales to the IRS. Amazon states:

“Due to Internal Revenue Service (IRS) regulations, U.S. third-party settlement organizations and payment processors, including Amazon, are required to file Form 1099-K for U.S. taxpayer sellers who meet the following thresholds in a calendar year: (1) more than $20,000 in unadjusted gross sales, and (2) more than 200 transactions.”

Technological

Amazon would not exist if it were not for technology. Technology has helped the company gain an advantage with higher sales, efficient production, and lower costs. Amazon is still at the frontlines of technology today – delivering products like “smart house” products like Alexa or Echo, fire tablets, kindle readers, and expanding on its Amazon Prime service to include an online music and television platform. Its mobile app is highly effective, because it understands that many modern-day users aren’t even using computers for online purchases anymore.

Amazon is focused on staying on the frontlines – it has focused heavily on its future Amazon Prime Air, a future delivery service that guarantees small packages to be delivered in drones in 30 minutes or less. The company managed to weave through various regulations and recently released exclusive footage announcing testing had begun and explaining more about the project (Vanian, 2016).

Market (Micro-Environment)

Amazon’s market focuses on the key forces that drive its micro-environment. These forces are its collaboration with different key players, its competition with online retailers and manufacturers of similar products, its suppliers in warehouses and individual selling units, and its regulators who keep the company accountable with legal policy.

Collaborators

Amazon collaborations focus on partnering with different entities where both parties can mutually benefit from each other. For example, Amazon bought out Zappos.com and is now its parent company. Amazon benefits from Zappos’ sales, while Zappos benefits from the wide range of resources its parent company can provide. A different type of collaboration is with in-store retailers. Amazon collaborates with Barnes and Noble to sell its Kindle products, and also with Audible.com for its audiobooks.

Competitors

Amazon’s competition continues to expand as it intersects in new markets. Originally, a primary competitor for Amazon.com was eBay. Today, that is only online competitor. Brick and mortar companies like Walmart and Target, which offer a wide array of goods similar to Amazon, have embarked on increasing their footprint in online sales. Walmart also recently announced ShippingPass, a direct competitor for Amazon Prime’s 2-day delivery service (Forbes, 2016).

Since Amazon Prime has embarked in media with services like FireTV and Prime Music, its competitors now include Netflix, Apple iTunes, Google’s Play store, and Time Warner Cable. Also, Amazon continues to create electronics, such as FirePhone, FireTablet, Alexa, and Amazon Echo, directly competing with Apple, Samsung, Google, and Best Buy.

Suppliers

Amazon has a complicated relationship with its suppliers. On the one hand, suppliers may be keen to sell with Amazon because the company reaches a wide array of consumers. On the other hand, the company is very aware of that, and because it has succeeded in price, reach, service, and convenience – it has control over the suppliers. And that creates a conflict. Amazon’s ruthlessness with its suppliers came to light when it made the decision to stop taking preorders from book publisher Hachette (Steele, 2014). In an effort to sell books at the lowest prices possible to keep customers happy, the company strained its relationship with its supplier, who felt cheated out of a deal. Similarly, the company held off on advanced orders or Warner Home Video products, creating a “war” with its suppliers (Fung, 2014).

Regulators

As e-commerce continues to boom, regulations to stop online piracy have been working their way through Congress. Amazon has been heavily involved on ensuring cyber-security, copyright laws, and privacy. But when the Stop Online Piracy Act was proposed, Amazon, along with technology giants Facebook, Google, and a few others, created “The Internet Association” (Kang, 2012). The goal was to band together on these issues and counter efforts to pass new rules in their industry and instead focus on alternative ways to regulate internet commerce without harming business.

Another way Amazon works with regulators is with Amazon Prime Air – the future service of “drone” aircraft delivery. It hit a roadblock in 2015 when the Federal Aviation Administration released a set of draft regulations for the legalization of commercial drones, with many factors that Amazon must comply by in order to move forward (Schiavenza, 2015). The company has since worked with the FAA and started testing in 2016.

Organizational and Strategic Analysis

Stakeholders

Amazon’s stakeholders comprise of its employees, sellers, manufacturers, suppliers, creditors, and customers. The most important stakeholders are its business management team and investors. When stakeholders provide more value, the company increases in sales, profits, and market share. For example, if Amazon offered merchandise at a lower price, company cost is also lower, which results in a greater merchandise markup, increased inventory, and naturally, more sales. Bezos invests deeply in stakeholders, providing regular updates that are inspirational and forward-thinking (Blodget, 2013).

Company Culture

There have been controversial reports about Amazon’s company culture. In recent years, former employees have come forward to describe their negative experiences, which have led to various lawsuits and negative media (Kantor & Streitfield, 2015). Of these negative experiences, complains surrounded on no overtime, mileage reimbursement, workers’ compensation,