Amazon – A successful business model

Amazon’s business model

In this era of technological advancement, organizations are growing at a rapid pace. People around the globe have easy internet access which has sky-rocket the revenues of organizations operating with the support of the digital business model. Amazon is a prime example of how the digital business model enables the organization to grow in a limited time (Dixon et al., 2017).  There is a strong relationship between the needs of society and updated technology. The demands of society become connected to the available technology, and organizations that focus on technology grow very fast. To understand the growth and how technology adoption increases organizations success factors, I will be evaluating how the business model of Amazon has contributed to its success.

How digital business model contributed to Amazon’s success?

In the world of technology and the internet, Amazon has earned substantial revenues. Amazon’s digital business model is very effective as it has enabled the organization to earn huge revenue streams. The business model of Amazon revolves around selling different commodities directly to the buyer (Amazon, 2019). There are many sellers that are registered on Amazon, and Amazon links these sellers to the huge amount of people in the world. On every sale, Amazon deducts commission and earn revenues. Amazon has also started to offer subscription services where people can enjoy movies and music with huge discounts on shipping. It also facilitates users to get the same day or 1-day delivery, depending on the location. The revenues of Amazon show how effective an organization’s business model is as the revenues of the organization revolve around more than 230 billion (Macrotrends, 2019). The organization’s business model has contributed a lot to organizational growth as it allowed the organization to communicate with people around the globe.

Artificial intelligence and growth of Amazon

The use of artificial intelligence is the dominating factor that has boosted up Amazon’s growth. The requirements of customers have been changed heavily, and people demand diversified products. Since the revenues of the organization and customer demands are growing, the problems are also growing for Amazon. The customer base of the organization revolves around more than 90 billion, which depicts the huge organizational growth (Statista, 2019). To deal with customer queries, the organization relies heavily on the use of artificial intelligence. Artificial intelligence can be described as the use of machines to resolve problems. Amazon has used the concept of artificial intelligence to deal with customer queries. Amazon uses artificial intelligence-based chatbots that deal with the frequently reported complaints. The use of artificial intelligence has enabled the organization to gain maximum revenues and contributes heavily to the organization’s growth (Brandtzaeg and Følstad, 2018). Artificial intelligence is further expected to be changed heavily as the researchers are focusing on reducing waste management and pollution reduction. Hence, it is safe to say that artificial intelligence has enabled Amazon to deal with a lot of customers and to earn heavy revenues.

Figure 1: Amazon’s Revenues

Source: (Statista, 2019)

In the debate of Amazon’s business model and how the use of digital orientation has enabled the organization to gain huge revenues, the use of machine learning holds high importance. Amazon’s research and development model is pretty strong, and it allows the organization to track customer purchase behavior. By using artificial intelligence to a high level, the organization has earned immense revenues. The business model of the organization also puts a huge emphasis on digital marketing. Ai based R&D system has enabled the organization to track consumer behavior and market needs (Herbrich, 2017). Afterward, the strategies of the organizations are pointed out towards the high customer achievement.  The world is changing heavily, and researchers around the globe are focusing heavily on shaping a new environment for customers. According to Professor Andi of the University of Exeter, different strategies are being planned to provide enhanced customer experience to the tourists (Exeter Cathedral, 2019). Different strategies, including eye-tracking and text analysis, are being planned to provide enhanced customer experience. Amazon can use the same strategies. Although the organization is emphasizing the use of artificial intelligence to gain maximum profits and to provide 100% optimized content to the customers, the latest technologies, including eye-tracking and text analysis, can be used to grow heavily.

Is Amazon’s model successful?

After stating the different points of view, it has been identified that Amazon’s business model has contributed a lot to the organization’s success. The organization focuses on the use of artificial intelligence and excessive marketing strategies to gain huge revenues. As the organization’s revenue revolves around more than 230 billion, it can be interpreted that the organization’s business model is strong as it facilitates huge revenues (Statista, 2019). The future of the organization focuses on enhanced and customized customer experience. The organization focuses on the adoption of technological adoption, and there is a high probability that Amazon would grow even more in the future.

References:

Amazon (2019). Amazon.com, INC. Retrieved from: https://ir.aboutamazon.com/static-files/35fa4e12-78bd-40bc-a700-59eea3dbd23b

Brandtzaeg, P.B. & Følstad, A. (2018). Chatbots: changing user needs and motivations. Interactions, 25(5), 38-43.

Dixon, J.A., Brohman, K. & Chan, Y.E. (2017). Dynamic Ambidexterity: Exploiting Exploration for Business Success in the Digital Age.

Exeter Cathedral (2019). Exeter Cathedral. Retrieved from: https://www.exeter-cathedral.org.uk/

Herbrich, R. (2017). Machine Learning at Amazon. In WSDM (p. 535).

Macrotrends (2019). Amazon Revenue 2006-2019 AMZN. Retrieved from: https://www.macrotrends.net/stocks/charts/AMZN/amazon/revenue

Statista (2019). Annual net revenue of Amazon from 2004 to 2019. Retrieved from: https://www.statista.com/statistics/266282/annual-net-revenue-of-amazoncom/