Amazon, USA Descriptive Essay

Amazon, USA

Introduction

Innovation is the process by which entrepreneurs exploit entrepreneurial opportunities to create value through new goods or services. Through entrepreneurship and innovation, individuals and businesses can also improve existing goods. Amazon has continuously demonstrated the importance of innovation and entrepreneurship. Amazon’s business success is riddled with creative innovation and exploitation of entrepreneurial opportunities. This is indication of the fact that the innovation and entrepreneurship are key for continuous transformation and development of new and existing businesses.

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Innovation the Amazon way: Experimentation

No company executes innovation the way Amazon does. Worldwide, innovation is a source motivation and challenges to most entrepreneurs and other business organizations. It requires time since it is a step-buy-step procedure that results in the creation of new products, services, and customers experience. Amazon gets this notion right and executes it in the best way possible, which is visible in its transformational approach to business. According to Kumar (2013), innovation is a challenging way of doing business that can push a business into a period of low success, leading to reluctance among investors to invest. It can also win the customers, create a competitive advantage, and increase an organization’s profits. However, it remains a great challenge to many businesses. As Bezo, Amazon’s CEO, asserts it takes time for an innovative idea and entrepreneurial endeavor to yield a positive outcome (Pearce, 2012). It takes an average of five years, yet most firms do not have the luxury of time. There is a tendency to focus of revenues and thus neglect long-term longevity. In most cases, innovative and entrepreneurial ideas are seen as tiny almost insignificant and are thus subject to dismissal. Companies are never ready to sacrifice short-term profits and, as a result, many companies kill innovation and entrepreneurial spirits without the intention to do so.

Businesses in America still use poor approaches to business. Amazon CEO Jeff Bezos encourages companies to change the way they conduct business (Pearce, 2012). They should do it the Amazon way through sacrifice of a year’s profit and reinvesting it in long-lasting customer loyalty and opportunities that can lead to more profits the following year or years later. Most businesses only focus on a day’s bottom and do not invest in the future since their main purpose is to generate profits for the owners. The faster they generate the money, the better it is for them, and every decision the managers make focuses on immediate profits. Short-term profits are insalubrious and undermine sustainability.

Innovators always find new ways of doing new things. This sometimes leads to criticism from those who favor the traditional ways of doing business. Innovators should have “willingness to fail” as well as be misunderstood for extensive periods of time. Innovation always encounters criticism from conservatives who support the existing approaches. In most cases, the conservatives find innovation very divergent of the established traditions and systems. Criticism is not always negative though since some critic may be positive about new developments but worry about the outcomes of the new ways. Self-centered critics perceive innovation as a threat to the status quo. In this regard, it important to ensure that negative sentiments do not stand in the way of innovation.

Experimentation also comes in handy (KISS metrics, 2014). This is certainly something that most businesses would not do. With a strong desire to meet economic projections and make profits, mots business would not welcome experimentation. Only innovation the customers care about may become successful. It is easy and common for inventors and innovators to come up with new ways that customers do not care about. Therefore, to increase the rate of success it is necessary for innovators to increase the rate of experimentation (Elgan, 2013). This makes innovation a continuous process within organizations. Every organization must be built to accommodate the culture of frequently reorganizing itself to develop new approaches to business and customer service as well as accommodate new changes in the business environment. Reorganizing systems to increase the rate of experimentation rise the odds of coming up with the best or most apt way of doing things. Amazon builds relationships with customers and uses rich information from the customers to create new innovative services and products that meet the customers’ needs better. The corporation served a significant role in the development of cloud computing. It developed its internal capacity and enhanced its efficiency and now it provides computing service to thousands of external customers (Hitt, Ireland, & Hoskisson, 2012).

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Organization Structure and Innovation

According to Behshtifar and Shariatifar (2013), there is a strong relationship between an organization’s structure and it corporate entrepreneurship. Organizations ought to develop appropriate organizational structures that support entrepreneurial culture. In many instances, special arrangements are necessary to achieve this. Entrepreneurship and innovation are the birth and death of new organizations. To stay in business, entrepreneurial thinking is very important. Developing and strengthening entrepreneurial spirit in the organization is thus important since it can create perfect conditions for organizational cultures and structures that encourage innovation. Such culture encourages employees to rise and make sense of existing and arising opportunities.

Innovation through a Transformative Business Model

Amazon is a firm established with enormous ability to transform and adapt to new changes and prevailing conditions for better business prospects. It readily exploits new business ventures for all its existing and new clients and ensures that all their demands are met at the appropriate time. The firm consistently stays abreast with the emerging technological developments and modern approaches of executing business transactions. This ensures continued existence and sustained relevance on the market with minimal or no danger at all from its competitors. As a result, its future remains stable and promising.

Amazons greatest focus remains on customer satisfaction. As for the firm, there is no impossibility as long as commitment and dedication are spiced together. All challenges are faced head-on and acted upon to produce a desirable and successful product. Ideas, which are thought to be complicated or exotic, are made suitable to all clients. Services are in continuous improvement to suit the needs of the clients. Without upgrading, they become too monotonous and depreciate. This may make clients look for efficient services somewhere else. Close and thorough analysis on customers’ needs is necessary. To realize the positive outcomes from such an analysis, an entrepreneur must follow up with delivery of a product that is perfect and acceptable. Innovation is necessary to act upon the information generated through the analysis of customers’ needs and wants. To succeed, firms should embrace teamwork and formulate the best policies. All their energy should be focused on a specific goal while making maximum use of the available resources.

Kumar (2013) further states that innovation is an aspect shaped in five very important intuitions. First, is discipline. Most people believe that innovation is a mystery, but certainly, it is not, it is a discipline that can be adept, calculated and excelled at when formalized as a disciplined process, which can be approached scientifically. It is a process that needs clear models, mindsets, and methods. Models here provide the innovators with the focus required to deal with compound innovation challenges. The mind-set delivers clear ways of discerning to fully comprehend challenges and properly decipher reactions, while methods facilitate step-by-step action to reach the desired outcomes and end goals; these procedures are sufficiently effective as they work together as a team. Innovation is shaped by technology, the type of business, design, and society at large. Combined, these forces bring out innovation that delivers higher economic value. However, for this to be successful, it will need a lot of teamwork and collaboration among all the concerned members, it could also need same generic processes that could benefit from diverse projects. Innovation is more of a motivation to an organization for better exposure, exploration, development, and achievement of an organizational goal in a much more unique way.

The thinking capacity should not be limited to the current business formulations, but be expanded widely without being stretched. New ideas and business models must be in accord with the current needs of the client (Crawford, 2014). This can only be realized by a leader who is creative and ready to take risks for the sake of the firm. Demonstration of servant leadership, research, and practice steers the firm towards the right path of service delivery. Critical thinking and planning must be put into consideration. Before implementation, all the pros and cons of the new models must be well understood. No opportunities should remain untapped or underutilized. With everyone involved in the process, the best solutions are likely to be provided.

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Most managers have realized that working with the best minds is the key to innovations in business models. This is facilitated by participants who are open minded and selfless. Therefore, firms should create an accommodative environment for new ideas that are likely to be beneficial.

Innovations should not be compromising, but readily acceptable by all. If the technology is not well received, the business might not benefit on it. This necessitates restructuring of new business models in order to align with the client demands. Amazon consistently rethinks and makes adjustments through continuous innovation and transformation.

Most longstanding businesses have a well-established business model that is open to transformation and encourages innovation (Crawford, 2014).  Such businesses enjoy a wide scale of operations. They experience less competition from upcoming firms that frequently make short-term business model innovations due to lack of business experience and high specialization. Innovations should have a great focus that is beyond production and service delivery. They should always maintain a high standard on the market.

Any firm that fails to innovate and revise its business model gets irrelevant with time. It happens because clients go for more efficient and quality services that are modern and globally used. Therefore, new models should be used in all aspects of business for maximization of profit.

Business model innovation is highly recommended by top business executives around the world. According to them, it remains a top-notch priority than innovation of new goods and services. It has also been observed that some international firms have not given a try in business model innovations, and this has greatly crippled their move to higher levels of success.

Implementing suitable business model spots can be useful to organizations in sustaining growth especially when it comes to optimizing business and transformational growth for developing entirely new sources of value and income creation. Organizations often spend much time looking for efficient alternatives to operate in the existing markets. To avoid such pains, components of business models can be reinvented either separately or collectively to attain a structural competitive advantage, and entirely new opportunities and markets.

Key Elements of Business Model Innovation

A business model transformation, for instance, can be conceptualized by use of the framework with four specific actions. As suggest Crawford (2014), the four actions allow organizations to systematically study ways of challenging prevailing industry logic, creating value, existing models and assuming legacy. Studying Amazon innovation strategy embraces an Eliminate-Raise-Create-Reduce framework that has been influential on its way-forward to become the most dominant web retailer. Below is an elaboration of the Eliminate-Raise-Create-Reduce framework

Eliminate

Elimination focuses on identifying business elements that are taken for granted but with more input and innovation they can be illuminated to play an important role in business development. Technological innovation has been one of the company’s strongholds. The implementation of the new technology by Amazon continues to attract an increasing customer-base and establish a direct relationship with its suppliers; thus, eradicating the status quo. For instance, the feature “1-click checkout” has significantly reduced the transaction times, which was impossible with the use of manual input of billing and shipping books for every purchase.

Raise

The rise element focuses on the business elements that can be rise over the industry’s general standards. For instance, although not being the first online store, Amazon continues to acknowledge the necessity to transform customers’ shopping behaviors. This is evident through the construction of the next generation infrastructure and platforms that provide exceptional scope, value, and choice to customers. Therefore, Amazon through the invention of online shopping platform has radically redefined the essential dynamics of customers’ shopping behaviors and the traditional retail business model.

Create

The create element has encouraged invention, and it seeks to create something new that the industry has never provided before. Amazon invented Amazon Web Service (AWS) because of its technological infrastructure, which has since then rendered the web-scale cloud computing more economical and accessible everyone. The invention of AWS has branded this organization as a technological header, and because of that, the firm has realized a competitive advantage leading to high stock turnovers.

Reduce

In regards to reduction, this strategy aims at seeking element that can be reduced bellow industry standard. The element designed by Amazon to contract short-term profits has raised more eyebrows in its business model. With this, the company hopes to capture a huge market share and scale that will allow them minimize costs and maximize profits in the future. This strategy has the potential to transfer minimal costs to clients and pose a great obstacle for rivals in the long-run.

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Employees and Continuous Cooperate Innovation Culture

Inculcating an innovative and entrepreneur culture in employees is also important. This facilitates creation of a corporate entrepreneurship culture. Several human resource management structures and practices can encourage this culture. First, it is important to design jobs to enable employees pursue multiple career paths. Create a functional socialization environment in which new employee can acclimatize easily to the organizations norms and values and thus wholeheartedly work for the organization. It is also imperative to make sure that employees participate in the appraisal process within the organization. Consistent evaluation of employee’s innovativeness on job and providing a long-term training approach as well as programs that increase employee involvement are critical. Programs that are group-oriented increase rather that individual oriented, but emphasizes the employees’ needs are also necessary. Such programs should be continuous to encourage continuous innovation. Entrepreneurs may act independently or as part of an organization. They perceive entrepreneurial opportunities and assume risks to develop innovations to exploit the opportunities.  The can be present at all levels of an organization, for instance, Amazon has entrepreneurs at all ranks of its structure. Most of the employees at the organization spend a good amount of their time coming up with innovations (Hitt, Ireland, & Hoskisson, 2012).

Benefits of Amazons’ Way of Innovation

Because of its capacity to deliver a diverse set of client value, this innovation provides a competitive advantage to the company. Traditionally, a constant review of business model keeps the firm linked to its commercial roots, which is a behavior that should be borrowed by even already-established firms.

Many developments within business circles strive to address customer needs as demonstrated by Amazon. When firms avail variety of customer choices, it is likely for growth opportunities and revenue to emanate from the basic way a commerce is formulated even without the use of murmurs. Bezo emphasizes that focusing on customer is one of the greatest entrepreneurial strategies (Pearce, 2012). Focusing on the clients always makes a business venture resilient. Focusing on customer ensures that businesses survive hard times. Amazon proved this when it survived the dot-com burst. During such periods, it is always important to keep communicating with employees. The company pioneered the dot-com industry, selling of books on the internet, first to offer “one click” program and the first to used collaborative filtering technology. It was the first to provide comparative shopping directing customers where they could find items that were out of stock or what it did not sale (Jordan, 2012).

In a competitive corporate domain, it is important to seek examples from the company that has successfully grown without putting short- term profits ahead of long-term reserves and worth creation. For many years now, Amazon has continuously put emphasis on clients and investing for long-term as there fast priority. It has voluntarily reduced its prices to increase its value to its clients. It has invested in technology and customer service and made big bold bets which payoff. In so doing, it has achieved one of the most central lasting and valuable enterprise that the internet boom has yet created. “Embrace a long-term view, and the interests of clients and shareholders align” this is a money quote, a philosophy that has made Amazon successful and which should be understood and embraced by most American companies.

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Conclusion

Entrepreneurship and innovation remain the most critical tools for businesses’ long-term success. The success Amazon enjoys is a product of innovation and entrepreneurship. It pioneered in almost everything it does. The company’s continuous innovation in e-business is a demonstration that success is inextricably linked to a combination of innovation and entrepreneurship. Evolving a new form of interaction with clients is normally useful to shape the customers’ experience. Other businesses can learn from Amazon and make customer the center of their activities as well as focus on improving long-term performance rather than shot-term profits. With a long-term mentality, businesses can develop business models that encourage transformation and innovation.

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