Amazon.com: A Corporate Success Story of Internet Exploitation

Amazon has grown to become one of the largest technology companies in our contemporary online ecology, permeating a diverse range of industries related to the internet. Its contributions to internetworked change have been prominent in the everyday lives of people around the world. Expanding beyond its original intended service as a local online book purchasing business, Amazon has become influential in the modern development of technology and its ubiquity. Today, its presence in sectors related to streaming, online shopping, and technological innovation, implicates the company’s significant role in transforming the economic, political and social operations of our world.

In just twenty years, Amazon.com has gone from a start-up internet book seller to a global company revolutionising and disrupting multiple industries, including retail, publishing, logistics, devices, apparel, and cloud computing” – Rossman, 2014

The company has introduced both new services and products to the everyday lives of people, ultimately transforming the internet and its functioning in society. New processes of online shopping have effectively become normalised by Amazon’s development, along with its integration of new smart technologies through its cloud. Therefore, Amazon, as one of the “most valuable and powerful corporations in modern history” proves a foundational agent of internetworked change in our current digital context (Statt, 2018).

History

Jeff Bezos in his basement launch site for Amazon in 1995
Image 1: Jeff Bezos in his basement launch site for Amazon in 1995 (Lott, 1995)

In 1994, Jeff Bezos founded the initial concept of Amazon as an online bookstore, and launched the business the following year. Based in Seattle Washington, Bezos worked with his wife Mackenzie, selling books from his garage to the local community (DePillis & Sherman, 2018). Within 30 days, Amazon managed to reach $20, 000 per week in sales after being funded just from Bezos own pocket money and parents’ help (Fundable, n.d.).

Most people believed Amazon was doomed because it would not scale a cost structure that would work” – former Google CEO Eric Schmidt (Stone, 2013, p. 5)

Some of the major milestones in Amazon’s Timeline                          (DePillis & Sherman, 2018):

  • 1998 – Amazon diversified its retailing to CDs and DVDs, allowing shoppers to listen to song clips before purchasing with music recommendations to users. Offered over 125 000 song titles, larger than any average physical music store
  • 1999                                                                                                                                                      (September) – “1- Click” Patent secured by Amazon enabled items to be purchased with the click of a mouse. The new technology encouraged customers to buy more due to its simplicity, and the company could also collect user’s data                                                                                          (December) – Bezos was named Time Magazine’s “Person of the Year” for popularising online shopping, becoming the “king of cybercommerce”
  • 2002 – Amazon started selling clothes online through partnerships with 400 major clothing brands, as well as expanding to sell electronics, toys and kitchenware
  • 2005 – Bezos launched Amazon Prime, a $79/year loyalty program that provided free 2-day shipping on all orders (now has over 100 million members)
  • 2007 – Amazon revealed its Kindle, a new electronic reading device through which users could download books, magazines and newspaper articles portably
  • 2012 – Amazon acquired Kiva Systems, a robotics company that enabled the Amazon to increase its automation processes to facilitate faster deliveries of products, and less need for human staff
  • 2013 – Bezos paid $250 million to aid and acquired the Washington Post. It became privatised, with a renewal of staff and better online products.
  • 2014 – Amazon unveils its first smart speaker, the Echo, as a platform for its virtual personal assistant ‘Alexa’
  • 2015 – The first physical ‘Amazon books’ shop opened in Seattle, now with 15 bookstores operating around the United States
  • 2019 – Amazon marks its 25 years in business, accounting for nearly half of online retail in the US

Through exploring Amazon’s historical development, the successful influence of Jeff Bezo and his company prove foundational to much of the technological services and devices we see today. The company has contributed significantly to internetworked change, essentially shaping modern digital cultures and contexts of online shopping processes, smart technology use, and retail servicing. Bezo’s entrepreneurial and innovative approach to Amazon, as an ever-diversifying business, demonstrates its vitally transformative effect on our technological world.

Business Model

Image 2: Jeff Bezos’ famous virtuous cycle napkin sketch (Uenlue, 2018)

Jeff Bezos has enabled Amazon to become “the fastest company in history to reach $100 billion in sales, making him the richest man in the world” (Anderson & Anderson, 2019, p. 1). By entrenching an entrepreneurial ethos into his business strategy, Bezos made Amazon a risk-taking company throughout its growth and development. This was evident in its very first stages of establishment, wherein Bezos took a chance on his idea for the business by leaving the job he already had. Subsequently, Amazon has become uniquely broad and diverse in its activities and services, operating as one of the largest, most prominent global corporations. This notion of risk, as emphasised by Anderson, is a significant ownership approach for Bezos to expand Amazon’s reach in the global economic and social sphere. Rather than a weakness, its risk-taking approach to business proves to be Amazon’s strength “to create a culture for experimentation and invention” (Anderson & Anderson, 2019, p. 1). As Bezos lays out in an interview [below], Amazon’s pathway to development is premised on prospects of long-term innovation with “customer centrality” (Chris R., 2017).

Amazon thus claims to be guided by four main principles (Amazon, 2019):

  1. Customer obsession rather than competitor focus
  2. Passion for invention
  3. Commitment to operational excellence
  4. Long-term thinking

Customer Centrality

A business model that is centred on the customer proves a vital component to the success of global corporations like Amazon, thus enabling it be a favourable company amongst consumers. Focus on the customer in influencing how the company develops is an important business model for Amazon, adhering to their suggestions, requests and critiques. For Bezos, “customer obsession” is one of the most essential mechanisms for growth and stability in the industry (Cuofano, 2018). By responding to customer demands, the company is able to forge a “strong relationship” with the public through its “zealous commitment to low prices and a seemingly never-ending quest to make modern life more convenient” (Statt, 2018). As a result, customers continue to purchase from Amazon due to their satisfaction with its services. Amazon’s good customer experience is achieved by its “customer value propositions”, having cheaper prices, fast delivery speed and a large variety of products containing the “Earth’s biggest selection” (Uenlue, 2018).

Image 3: Factors Driving Consumers in the U.S. to Purchase from Amazon (Clement, 2018)

Cheaper prices offered by Amazon prove to be a major factor driving consumers to choose it as the website to purchase items from. The subsequent benefits that emerge from becoming an Amazon member are also significant in the company’s successful online retailing, due to the company’s mission to provide for its customers. With financial concerns naturally being a priority for customers, Amazon’s business model that focuses on lower priced items is ultimately a successful one.

Long-Term Innovation

Amazon’s research agenda is not stuck on a single path of development, but rather shifts and transforms with the progressions of technology. As Rossman suggests, fundamental successes of Amazon arise from its capacity to adapt to the new transforming technological era of “connected devices, driven by sensors, abundant connectivity, cloud computing, and machine learning” (Rossman, 2016). The new emerging context of the Internet of Things is becoming evermore prevalent, which Amazon grasps as an innovative opportunity for growth. This business strategy is significant to its persistence as a dominant agent in our competitive contemporary digital ecology, constantly contributing and adapting to the transforming world of technology. Even from its initial stages of development, when the internet was only just emerging as a platform for engagement, Amazon implemented a “web-based strategy” to guide its future trajectory (Kotha, 1998, p. 212). This continued emphasis on exploring and exploiting the capabilities of internet technology has enabled Amazon’s innovations to be successful, both for the long-term and in a variety of industries. As such, it is not only able to dominate in research sectors of online retail, but also technological advancement, space missions and the entertainment industry. With a broad agenda, Amazon is not restricted by its identification as an online retail company, becoming a corporation contributing to the transforming world of technological integration.

Social Ecology

Image 4: Diagram outlining Amazon’s main business Partners and Competitors

Despite Amazon’s overall success as one of the world’s largest technology companies, with the largest revenue, it does not come without its critiques. Several political and regulatory debates have emerged from Amazon’s products and the company’s operation in society.

Amazon Echo & Privacy

Image 5: Alexa at home (Seals, 2018)

Amazon was the company to introduce its smart speaker device, the Echo, with an integrated intelligent personal assistant called Alexa. This new technology was a major “turning point” in the digital world, increasing the integration of the ‘Internet of Things’ in everyday life (Bunz & Meikle, p. 47). As a device constantly collecting data, and thus becoming increasingly ‘smarter’ with  its repeated use, issues of privacy and data storage arise. Alexa is voice activated, and therefore must always be recording and listening for the wake word. As a result, these perpetual devices that are always on create new understandings of digital rights. For Karppinen “the right to data protection” and “the ownership and fair use of personal data” are significant new human rights issues to be considered in the emerging context of continuous digital surveillance from some popular devices (Karppinen, 2017, p. 97). Amazon’s Alexa exemplifies this notion of diminishing rights to privacy, through its absorption of large amounts of user data that is stored in the cloud. Through the Echo, Amazon is ultimately able to “view user dialogues” that are “use them to the company’s advantage”, posing new threats to security and privacy in the home (Jackson & Orebaugh, 2018, p. 94).

 The Washington Post

In 2013, Bezos announced his decision to buy the Washington Post for $250 million of his own money, sparking political debate around Amazon as a major corporation attempting to buy influence in Washington D.C. (DePillis & Sherman, 2018). The perpetuation of these criticisms have predominantly originated from President Donald Trump, repeatedly coining the newspaper as the ‘Amazon Washington Post’. Trump has accused Bezos’ ownership of the newspaper as a means to advance his own business interests, as well as produce reports that politically target his position in Office (Weiczner, 2017). As such, controversies around Amazon’s acquisition of major media outlets have been raised in regards to preventing anti-trust investigations and public scrutiny. Transparency of large corporate companies, like Amazon, thus produce significant political and cultural debates around the dissemination of trustworthy and unbiased press.

Image 6: Jeff Bezo’s ownership of the Washington Post (Sheffield, 2019)

Valid counterarguments against these accusations by Trump have, however, been made, such that the Washington Post still embodies rights to free and independent press. It thus reflects necessary digital rights towards free journalism that “protect individuals from unjustified government interference” that would otherwise likely be exercised by powerful political actors (Karppinen, 2017, p. 98). Furthermore, journalists and editors at the Washington Post have affirmed that Bezos has little involvement with the reporting that is produced (Weiczner, 2017). “Negative stories” around Amazon have been published by the paper, addressing the company’s monopolisation and capitalisation strategies, without any objection from Bezos (Weiczner, 2017). Subsequently, economic and political concerns do arise from Amazon’s corporate strategies, however not premised on Amazon’s ownership of the Washington Post as President Trump claims.

Internet Transformations

  1. The most prominent changes brought about by Amazon in society is in relation to its introduction of new shopping practices. It is known to have “popularised” the online shopping we are familiar with today, being a more convenient and more globalised service through the internet. As Stone indicates, “The company has nearly perfected the art of instant gratification, delivering digital products in seconds and their physical incarnations in just a few days” (Stone, 2013, p. 4). Amazon’s contributions to the retail industry have the significantly revolutionised social understandings of consumer culture.
  2. Introduction of the Amazon Echo has also proved influential in the technology industry, shaping the increasing ubiquity of sensors in everyday life. Smart devices and software like Alexa present new understandings of “surveillance, information processing and privacy” with increasing data collection from companies (Andrejevic & Burdon, 2014, p. 19). These developing norms of constant monitoring by smart technologies have become a platform to establish our emergent ‘sensor society’.

Amazon’s innovative and risk-taking approach to advancing the technology industry implicate its significant role in transforming our digital ecology. Bezo’s implementation of a limitless and adaptable business model throughout the company’s development has enabled it to become one of the largest corporations operating in our contemporary world. As a result, Amazon has not only paved way to new cultural practices with regards to online reading and shopping, but also has introduced several innovative devices within our increasingly digitised society. The technological, social and cultural contributions of Amazon cannot therefore be overlooked, proving to be a company increasingly ingrained in the everyday lives of people around the world.

References:

Amazon. (2019). About Amazon. Retrieved from https://www.aboutamazon.com/

Anderson, K. & Anderson, S. (2019). The Bezos Letters: 14 Principles to Grow Your Business Like Amazon. Morgan James Publishing.

Andrejevic, M. & Burdon, M. (2014). ‘Defining the Sensor Society’. In Television and New Media, 16(1). Sage Publications: doi.org/10.1177/1527476414541552, p. 19-36.

Bunz, M. & Meikle, G. (2018). ‘Speaking Things’. In The Internet of Things. Polity, p. 45-67.

Cuofano, G. (2018). How Amazon Makes Money: Amazon Business Model in a Nutshell. Retrieved from https://fourweekmba.com/amazon-business-model/

DePillis, L. & Sherman, I. (2018). Amazon’s Extraordinary 25-Year Evolution. Retrieved from https://edition.cnn.com/interactive/2018/10/business/amazon-history-timeline/index.html 

Fundable. (n.d.). Amazon Startup Story. Retrieved from https://www.fundable.com/learn/startup-stories/amazon

Jackson, C. & Orebaugh, A. (2018). ‘A Study of Security and Privacy Issues Associated with the Amazon Echo’. In Int. J. Internet of Things and Cyber-Assurance, 1(1). United States: Virginia, Inderscience Enterprises Ltd, p. 91-100.

Kotha, S. (1998). ‘Competing on the Internet: The Case of Amazon.com’. In European Management Journal, 16(2). Great Britain: Elsevier Science Ltd, p. 212-222.

Karppinen, K. (2017). ‘Human Rights and the Digital’. In H. Tumber & S. Waisbord (Eds.), Routledge Companion to Media and Human Rights. Routledge, p. 95-103.

Rossman, J. (2014). The Amazon Way: 14 Leadership Principles Behind the World’s Most Disruptive Company. United States: California, Createspace Independent Publishing.

Rossman, J. (2016). The Amazon Way on IoT: 10 Principles for Every Leader from the World’s Leading Internet of Things Strategies. United States: Washington, Clyde Hill Publishing.

Statt, N. (2018). How Amazon’s Retail Revolution is Changing the Way We Shop.  Retrieved from https://www.theverge.com/2018/10/23/17970466/amazon-prime-shopping-behavior-streaming-alexa-minimum-wage

Stone, B. (2013). The Everything Store: Jeff Bezos and the Age of Amazon. United States: New York, Random House.

Uenlue, M. (2018). Amazon Business Model: Three Customer Value Propositions. Retrieved from https://www.innovationtactics.com/amazon-business-model-part-2/

Weiczner, J. (2017). How Jeff Bezos Reacts to ‘Negative’ Amazon Articles in Washington Post. Retrieved from https://fortune.com/2017/10/27/amazon-jeff-bezos-washington-post/

 

Media

Chris R. (2017). Jeff Bezos on Amazon Business Strategy – How They Succeed and Thrive in Everything. Youtube [Video]. Retrieved from https://www.youtube.com/watch?time_continue=12&v=tSzzjJd5BHk

Clement, J. (2018). What factors drive you to purchase on Amazon? Statista [Image]. Retrieved from https://www.statista.com/statistics/790123/driving-factors-to-purchase-on-amazon-age/

Lott, J. (1995). Amazon.com founder Jeff Bezos in the basement launch site for his web venture of Sept. 13, 1995. Seattle Times [Image]. Retrieved from https://www.seattletimes.com/business/amazon/the-seattle-times-first-story-about-jeff-bezos-when-you-had-to-hook-up-to-the-internet-22-years-ago/

Seals, T. (2018). ‘Voice-Squatting’ Turns Alexa, Google Home into Silent Spies. Threat Post [Image]. Retrieved from https://threatpost.com/voice-squatting-turns-alexa-google-home-into-silent-spies/132068/

Sheffield, C. (2019). Washington Post, Amazon Owner Jeff Bezos Signs Climate Pledge, Drawing Scrutiny of Post’s Neutrality. Bloomberg [Image]. Retrieved from https://www.aim.org/aim-column/washington-post-amazon-owner-jeff-bezos-signs-climate-pledge-drawing-scrutiny-of-posts-neutrality/

 

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