Effectiveness of Amazon.com
Unless you have been living under a rock, you have probably heard of Amazon.com. So let us take a moment to talk about their rise. The concept of Organizational effectiveness is an abstract concept that can sometimes be difficult to measure. However, by determining certain proxy measures that are used to represent effectiveness, we can begin to see how certain sustainable competitive advantages begin to take shape and what that might ultimately mean for an organization in the long term.
To demonstrate this, we must use a model that exemplifies the point. It is my professional opinion that Amazon.com is extremely effective, and for a plethora of reasons. For starters, it is a worldwide company that is technically a “start-up”; now, with revenues of well over $61 billion. They were able to achieve this due in great part to their customer service, fast and reliable shipping methods, variety, user-friendly interface, and innovative products and solutions (to name a few).
Direct or proxy measures that support my claim include Amazon’s successful control of their warehousing and fulfillment centers, industry-recognized and cutting-edge technological advances, and effective and/or creative use of that technology, including smartphones to drones. It would also be wise to point out their own technology products such as Fire Phones, Fire TVs, Artificial Intelligence systems such as Echo, video games, and more. You do not see this innovation from most other retailers.
I would say that Amazon.com continues to improve its effectiveness as a matter of principle. This attitude for success starts at the top, of course. Their CEO, Jeffrey Bezos, once said that success comes when you subscribe to three big ideas: Put the customer first, Invent, and Be patient. So Amazon remains dedicated to the customer while continuing to expand and perfect its warehousing infrastructure. The result is an interesting and highly successful one that can be directly attributed to their rise.
Their efforts to improve effectiveness continue to be successful. The company appears to be perfecting its infrastructure, not just for itself but for third-party sellers. “Fulfillment by Amazon” offers up its physical infrastructure to third-party sellers who want to outsource the warehousing of their inventory, shipping orders, and handling returns. Not long ago, this part of the business grew some 40 percent in a single quarter. If we want to get real about it, Amazon boasts a growth rate of 231.9% from 2008 to 2012, compared to Wal-Mart’s 10.3% during that same time (NYSE).
Amazon.com might be banking on the idea that people are not patient and want their products fast and cheap. Regardless, they are figuring out a way to do that while reducing their overhead. As a frequent customer of Amazon.com, I can tell you that their customer service is second to none, and I prefer dealing with Amazon.com rather than other retailers, period. It is really hard to get much more effective than that, and it’s easy to see why they are outpacing their competitors.
Now, if only I could convince Amazon to stop using USPS as a carrier, they would be perfect.