Contemporary businesses strive in the internet age. Not so long ago, the majority of companies focused on producing a certain physical good and used traditional channels to deliver the product to the customer. The internet has demolished these standards and completely changed the way organizations conduct their business. Today, most small businesses have an established online presence and consider online sales to be a significant revenue stream. However, despite changing the traditional business environment, the internet age has also given the push to some ventures that are now among the most profitable and popular companies in the world. Amazon.com is one of the greatest examples to illustrate this principle. Thus, in this paper, I will discuss the company’s history, service design, and quality management approach.
Background Information
Amazon.com was founded by Jeff Bezos in 1994. Currently, it is a top twenty Fortune 500 business with an operating income of 2.2 billion USD in 2015 (Amazon.com, 2016). Though the company started as an online bookstore, it soon diversified to include other products, such as electronics, furniture, toys, clothes, etc. Today, the website allows visitors to purchase almost anything and delivers it within one day.
The company’s mission and vision statement suggests that its “vision is to be earth’s most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online” (Farfan, 2016, para.3). Furthermore, some authors (Farfan, 2016) believe that the company’s success can be attributed to the abidance by its mission and vision statement.
In addition, careful analysis and evaluation of the company’s performance and reports allows to draw some conclusions regarding the pillars of Amazon’s corporate culture. The business has a clear focus on customer satisfaction, innovation, efficiency, seizing the moment, and careful employee selection policy. These practices make Amazon.com the success story, as we all know it.
Service Design
The textbook suggests that “the basis for an organization’s existence is the good or service it provides society” (Render & Heizer, 2010, p.152). Thus, it is of critical importance to understand the service design of Amazon.com, as it is likely to be one of the determinants of the company’s success.
In my opinion, the product design of Amazon.com is built around the idea of rapid response, introduced in the textbook (Render & Heizer, 2010). This approach requires careful evaluation and understanding of customers’ needs. Consumers’ lifestyles are constantly evolving, as the global marketplace is becoming increasingly more demanding and challenging. Thus, consumers experience a pressing need to be as efficient with their time as possible. This trend motivates Amazon.com to simplify shopping.
Amazon.com defines itself as a “customer-centric” company (Amazon.com, 2016). According to its 2015 Annual Report, the business is guided by “customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking” (p. 3). Furthermore, Amazon.com serves its “consumers through our retail websites and focus on selection, price, and convenience” (Amazon, 2016, p. 3).
The above-mentioned findings support my claim that Amazon.com is a rapid response business, as defined and explained by Render & Heizer (2010). This approach has proven to be successful for this particular industry and current market conditions.
Quality Management
Render & Heizer (2010) suggest that quality allows the business to differentiate itself from the rest of products in the market. Thus, delivering a high-quality product must be the core objective of any organization.
Amazon.com has a user-based approach to quality. It implies that “quality lies in the eyes of the beholder” (Render & Heizer, 2010, p.191). The business suggests that it “strive[s] to offer […] customers the lowest prices possible through low everyday product pricing and shipping offers, and to improve [its] operating efficiencies so that [it] can continue to lower prices for [its] customers” (Amazon.com, 2016, p. 3). In addition, the company also provides “easy-to-use functionality, fast and reliable fulfillment, and timely customer service” (Amazon.com, 2016, p.3). Thus, it can be suggested that Amazon.com uses the TQM element approach to quality management.
In addition, one might suggest that Amazon.com has mastered the concept of quality function deployment, introduced by Render & Heizer (2010). Authors define it as “a process for determining customer requirements […] and translating them into the attributes […] that each functional area can understand and act on” (p. 159). This principle is critical to the quality management structure of Amazon.com. as the business’s nature arises from understanding complexities of modern lifestyle and providing consumers with an opportunity to be as efficient with their time as possible.
- Amazon.com. (2016). Annual Report 2015. Retrieved from http://www.annualreports.com/Company/amazoncom-inc
- Farfan, B. (2016). Amazon.com’s Mission Statement. The Balance. Retrieved 27 November 2016, from https://www.thebalance.com/amazon-mission-statement-4068548
- Render, B. & Heizer, J. (2010). Principles of operations management (8th ed.). Upper Saddle River, N.J.: Pearson/Prentice Hall.
