One of the significant businesses that have been presenting the greatest success stories in the globe is Amazon Company. Being a well-known firm, Amazon manages to do business online, with one of the leaders who has helped it develop in dealing with various product lines being its founder Jeff Bezos. As a consequence, they have seen an increase in online retail sales. However, the business also has difficulties maintaining its online shop due to managerial issues. Massive product failure has been their primary problem, making it difficult for the business to adapt to changes in the industry. Amazon has had success selling goods from other businesses, but it has not been able to do the same with its own. This essay will discuss Amazon’s enormous product failure and examine it using the Kotter 8-Step methodology.
Company Overview
Amazon.com is a Seattle, Washington-based online store, e-book reader, and web service provider. The company’s creator, Jeff Bezos, chose the name because of its resemblance to a river in South America. Along with other major IT businesses like Google, Microsoft, Facebook, and Apple, it is among the Big Five in the US information technology sector. The online business offers gadgets, books, toys, and various other goods and services directly and via an intermediary. Amazon also participates in the cloud computing industry, renting out computer and data storage resources. The business manufactures the popular eBook reader Kindle. The marketing of the Kindle e-book has contributed to Amazon’s explosive rise in the book publishing industry (Sharma et al., 2020).
An Amazon Sales Rank mechanism might provide details about merchandise offered in any Amazon region. Although it does not directly impact a product’s sales, the approach aids Amazon in choosing which goods to include among its bestsellers. As part of a multi-level e-commerce strategy, the firm first concentrated on the business-to-customer interaction before shifting its attention to the customer-to-customer relationship. Amazon allows other businesses to promote on their website to drive sales, taking a tiny cut of each item sold via their online platform (Wells et al., 2018). The business has faced some criticism for, among other things, exerting excessive pressure on suppliers to increase and sustain profitability. Providing facial recognition tools to law enforcement, driving people away from bookstores, remotely deleting items that Kindle users have purchased, collaborating with the CIA to set up cloud computing partnerships, and negatively affecting the environment are just a few of the things that they do.
Diagnosis
Amazon has been attempting to develop new platforms for online book sales. These have motivated business owners to focus on addressing client demands by first recognizing them and attempting to secure ways of dispersing their services. Their main goal has always been to strike a balance between two optimistic points of view. While the second does not listen to their clients, the first does. The use of philosophy has been a helpful strategy that helps clients to get what they want. By 2012, they had reached the point where they could quickly source goods from several partners all around the globe. It is a vital sign of how far the business has come in leveraging an internet platform to swiftly promote and sell things (Sharma et al., 2020).
However, there have been issues with their interactions and how quickly they cooperate with other partners. This is due to a delay in being given the chance to create their items and sell them on the marketplace. The firm operates by putting theory into real-world application for their clients, a notion that makes them productive. They have built creative venues through their ability to assist the organizational atmosphere required to enable their management (Simmons & Kang, 2018). However, as they still haven’t been able to expand their activities, this will not help them adapt to the changing environment. The company’s management was able to improve efficient coordination using the internet in previous years. Even though it was a dangerous step, they were able to share their ideas and thoughts on how companies may utilize the outside web to manage their rivals.
However, even though they have a chance to expand their business but choose not to take advantage of the opportunity, the firm does not function as predicted. Amazon has also not been able to capitalize on its fame to develop items under Bezos, but it is still feasible that they will be able to keep their fans. There have been efforts to break into the market, such as the introduction of the Fire Phone, which would have been unsuccessful in the United States, according to (Wells et al., 2018). The main reason for this failure was that the company was unable to appeal to its clients because they did not see it as having the characteristics they need. It is a great illustration of how difficult it is for Amazon, despite being the largest online retailer in the world, to comprehend the changing demands of its consumers. In the meantime, time, it was claimed that the launch had failed because the device’s expenses had been timed incorrectly. They adopted a cheap price approach without taking into account what their rivals were providing or how customers might react (Li et al., 2019).
The management was forced by their failure to concentrate more on their e-commerce operation and strive toward making money from it. This demonstrates how the business prevented itself from pursuing the development of new items. Their potential is being restricted by their incapacity to handle change in their working environment while comprehending market dynamics and consumer needs. They still do not understand what their CEO, Jeff Bezos, has in mind for the business. Instead, the administration has put greater emphasis on their expansion while putting other suggestions to support them in starting new companies on hold. Bezos has a goal for the business that includes purchasing additional markets to grow its market operations. Due to Amazon’s absence of appropriate ecosystems that can assist change implementations within its production of design and new goods required by its consumers, this has not been feasible.
Application of the Kotter 8-Step approach
First phase of the Kotter 8-Step model
Amazon can benefit from the Kotter 8-step change model since it will help develop effective strategies to accomplish change. Creating urgency is the first phase of the Kotter 8-Step model, which is a component that Amazon and its executive management should strive toward comprehending their business practices. Because of their success in satisfying their customers’ requirements, Amazon has grown into a sizable business with numerous positive reviews. However, the management must assess the issues that need immediate attention, pinpointing the source of the issue and coming up with remedies. Communication is essential, and in this situation, it will be crucial that Amazon’s management start discussions on forums so they can obtain the data they want. Management must support any change for it to be successful inside a firm, which is a situation that Amazon should take into account. They may use it to identify what needs to change and work to make it happen.
Application of the second phase of the Kotter 8-Step model
To Amazon, which is assembling a powerful alliance, the second phase is equally important. One may argue that Amazon has struggled to understand and manage the need for change. In this situation, assembling a strong coalition would be necessary to provide them with support by giving them a course of action. The fact that coalitions often include a wealth of knowledge and expertise may work in Amazon’s favor since it will provide a channel for the dissemination of ideas and the assignment of all responsibilities necessary for each member to realize their goals. Any organization needs support to carry out its plans successfully since it serves as a tool for fostering teamwork and providing the power necessary to advance toward objectives (Haas et al., 2020). In the case of Amazon, receiving the assistance they need will encourage collaboration and increased effort, guiding them to accept the adjustments they require and succeed in their endeavors.
Third phase of the Kotter 8-Step model
Making a vision for change, which Amazon requires, is the third stage of the Kotter 8-Step model. The company’s management will be encouraged to identify areas where they need to improve in order to advance the organization by implementing change initiatives. Since most workers have a hard time accepting change, management must establish a hierarchy that will include them in the decision-making process. Employee involvement may allow the business to communicate with them and make choices that will improve their performance. To assist the team of the firm in making choices that will achieve its goals, management may also develop a clear and specific vision that is simple to comprehend. For instance, Jeff Bezos aims to devise strategies that will enable the business to penetrate new markets. Here, making the vision accessible will enable management to act with greatest impact and bring their objectives to fruition.
Fourth Phase of the Kotter 8-Step model
To make change easier to execute across the company, Amazon will need to reevaluate how it communicates its goals. It is the fourth phase in the Kotter 8-Step model, which emphasizes the necessity to support strategies for effective communication. Amazon has to improve on their internal processes, which includes making sure that the staff is informed of their goal, in order to allow them to acquire the correct items that may satisfy their customers’ preferences and desires. As a result, they have a fantastic chance to cultivate a culture of cooperation and concentrate on seizing the opportunities that present themselves in order to create something meaningful. The management team’s responsibility should be to regularly communicate the key elements of their vision in order to foster support and the development of networks with individuals from outside who can aid in their entry into the new market.
Fifth phase of Kotter 8-Step model
The fifth phase, which is very important if Amazon is to successfully navigate the transition process, is removing roadblocks. The business must assess if both internal and external factors are opposing the product it is introducing to the market. Additionally, determining if other strategies or rivals are impeding their creativity is a great approach to understand how to overcome their criticisms and seize the intended market. This action was taken by Amazon in an effort to lower delivery costs for its customers. This process thanks and acknowledges customers for bringing about change. The business’s decision to initially placate the public by offering Super Saving Shipping in 2002 for more than $99 was a growth inhibitor. By removing these roadblocks, a business may attract the customers it needs to carry out its goal and develop (Quotschalla, 2022).
Sixth phase of Kotter Methodology
The sixth phase entails producing short-term successes so that the workforce of the firm may be rewarded. An example is when Amazon attempted to introduce the Fire Phone, which failed as a result of their failure to satisfy its customers (Wells et al., 2018). Here, I would suggest Amazon to look at what they did good and wrong and try to make the most of it rather than giving up on their failure. The idea caused them to incur a significant loss, which encouraged the upper management to concentrate more on increasing sales. Instead of focusing on what went wrong for trying to figure out how to make it better, it would be better if they had instead focused on how far they had gone in developing the innovation. The conclusion may have made them feel as if their efforts were in vain, which may be demoralizing. Instead, Amazon’s management need to have thought about how to bounce back from their failure by making space for adjustments where it was feasible.
Application of the seventh phase
Most initiatives fail since an early triumph is announced, which is the seventh stage—building on the change. As significant improvements take time to take root, quick successes should mark the start of achieving long-term objectives. The business recognized it couldn’t keep up with the trend when it produced a “fire phone” on the same day the iPhone 6S hit the market, so it chose to concentrate on tablets and smart home products instead (Wells et al., 2018). This failure made it clear that a better method to guarantee that a product satisfies the demands of the customer is to analyze what went well and what needs to be improved after each victory. By bringing in new suggestions from agents and coalition leaders for change, the phone might have made beneficial strides. This can guarantee that the business maintains the impetus it has gained.
Eighth Step of Kotter Methodology
To ensure that improvements stay, Amazon should also make a fundamental adjustment that is anchored in how company culture is created. The eighth step comprises the kind of culture that Amazon’s corporates will use to decide the type of work that is done. As a result, the principles behind the company’s mission must be evident in their everyday job activities. Every so often, Amazon needs to discuss development, share tales of how change occurs, and reiterate other tales that energies individuals. To ensure that the corporate culture is uniform and up-to-date, the ideals should be reciprocated when hiring and training new employees. This includes going public with the contributions of the change coalition’s key members and ensuring that the rest of the staff is aware of their contributions to the venture. Amazon has teamed up with Awards, which delivers a strong, user-friendly, and effective platform for honoring workers who are making a difference in the workplace.
Conclusion
Amazon has had success selling goods from other businesses, but it hasn’t been able to do the same with their own. It is clear from evaluating their colossal product failure that the business must devise ways to bring about change in order to fulfill Jeff Bezos’ goal. The method to achieve the distinction is neither simple and fast; it calls for appropriate integration and assistance. In Amazon’s example, adopting a strategy similar to the Kotter 8-Step model aids in their success. It focuses more on the strategies businesses might employ to be ready for new endeavors. Initiatives for change may contribute to a company’s long-term success. Organizations must establish strategies that will enable them to concentrate more on the areas to consider while making changes. Chang may experience several disruptions, which might lead to losses and an increase in tensions, but organizations like Amazon can handle these difficulties with the help of a practical framework.
References
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