Amazon Project: Plan

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Contents
First Progress Report.................................................................................................................. 3

Challenges and Solutions Associated with The Project ......................................................... 4

Second Progress Report ............................................................................................................. 7

Challenges and Solutions Associated with The Project ......................................................... 8

Final Report ............................................................................................................................. 12

Background of The Company .............................................................................................. 13

Topics Being Studied ........................................................................................................... 14

Issues that are being analysed .............................................................................................. 14

Recommended Suggestions ................................................................................................. 16

Plan of future study .............................................................................................................. 17

References ................................................................................................................................ 19

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First Progress Report

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 Challenges and Solutions Associated with The Project

Amazon is the fastest growing e-commerce company generating billions of revenues.

It is considered as the biggest internet business commercial centre and distributed computing

stage on the planet as estimated by income and market capitalization. Being a large

organisation, there are many challenges associated with the company regarding professional

accounting, management, public relations and other aspects. Some of these issues are:

 Relating to the professional accounting, there are many essential accounting

issues that have been created in the company through sales. 50% of the total

sales in the company is contributed by the sales conducted by third party. The

finance and taxation issues are although kept tidy regarding the third parties

but there is some part that are not properly managed and can run the risk of

future law, finances and taxation warning. For the third parties to charge and

submit the VAT, they must hold a trading status prior to the procedure,

otherwise they cannot be issued with a VAT number.

 Another accounting issue that arises is regarding the generation of invoices.

Whenever a product or a service is sold, invoices are to be generated for the

third parties, Amazon follows the same procedure but it generates the invoices

passively, that means that invoices are generated but not updated for every

particular sale. This issue generally confuses the vendors, third parties,

consumers and also the accountants and causes chaos in the professional

accounting procedure (Easton et al. (2018)).

 Other accounting issue that emerges in the organisation is Amazon lacking in

keeping up with the e-commerce growth and maintaining a balance between

investments and profits that is being generated.

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  Keeping up the E-commerce growth and balancing the profits and investments

can also be considered as management issues in the company. Amazon is an

internationally evolving company and an e-commerce brand, trying to spread

internationally. But there are many aspects such as different laws and rules of

each country which is really hard to maintain the business. Due to different

rules and regulations in the countries, Amazon had to removed few of its

master products from the e-commerce retailing lists in many countries which

is hindering the E-commerce growth of the company.

 Management issues also persist as many other e-commerce industries such as

Walmart is trying to compete and take advantage of the lack in promotions

and advertisement about the company. According to Gaus (2019), Amazon

pulled back on advancements, advertisements and cost coordinating, and thus

Walmart gives off an impression of being exploiting Amazon's forceful

position.

 The PR issues persisted when Amazon opened their second headquarter

known as HQ2. According to Daniels (2018), Huge public relation difficulties

for the internet business monster “Amazon” have recently started. It

incorporates a flood of negative media inclusion in light of the fact that the

two picked areas for the headquarters ware not really amazing and for setting

urban communities against each other over tax cuts.

Solutions to the evolving issues and problems in the company are tough to be identified and

even after the identification of the solutions, it is difficult for such vast companies to provide

an immediate solution to the issues identified and demand lots and lots of efforts. Amazon

being one of the largest organisation tries not to hinder its business and also works trying to

maintain its four powerful principles such as customer obsession rather than competitor

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focus, passion for invention, commitment to operational excellence and long term thinking

(Aamzon.com).

Meeting high customer expectations such as fast shipping, free returns, low prices and

"Prime" subscription services. Involving the concept of Artificial Intelligence and machine

learning. Eg: Alexa, Amazon’s smart speakers. Low prices and selection are the key

strategies to initiate promotions and compete against other companies. Concepts like Amazon

Prime, influence people to use Amazon more, comparatively. For International expansions,

Amazon has competitive strategies for the customers, and is providing features and services

exclusive to different countries.

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Second Progress Report

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 Challenges and Solutions Associated with The Project

The overall issues identified in the first progressive report regarding professional accounting,

management, public relations and other aspects are the issues that are being faced by the

company and few issues that continued in the past. The accounting issue related to Amazon’s

sale and involvement of third parties is one of the most common issues related to profession

accounting. According to Eugene Kim (2018), Amazon merchants are encountering blackouts

over the back-end framework for following day by day sale invoices and details. Merchants

are concerned on the grounds that without deals information, they can't restock their stock.

Also the issues regarding the taxation is not resolved. The solution can be implemented is that

each worldwide organization with various exchanging substances in general ought to be

required to document on open record covering the majority of its activities so we can see the

entire picture for the organization. Another solution that can be proposed is that companies

like Amazon and all large multinational corporations should to publish a full country to

country reports on their activities, relating to management, finances, accounting and more.

Another issue identified in Amazon’s business is how Amazon straggle behind in balancing

their investments and their profits. According to Benedict Evans (2014), Amazon has massive

revenue growth but no profits. This can be really seen clearly by the graph provided by

Amazon itself.

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 Fig1: Profit vs Revenue

The idea behind accomplishing less profits is to become a company such that it becomes a

definite place that where customers can buy anything and everything and to accomplish their

aim, the company is paying a quiet less attention towards its profits. Amazon tries to do

everything possible to make its customers happy and contented. Although taking care of all

its customers and their satisfaction, Amazon is not at loss and is profiting about 1% of its

total net worth, which is considerably less. Amazon is working on investigating solutions for

generating higher profits considering the happiness and satisfaction of their customers.

Amazon is really working hard on meeting the high customer expectations such as fast

shipping, free returns, low prices and "Prime" subscription services. Amazon’s launch of the

prime membership subscription helped Amazon in generating large amount of revenues with

making its customers super happy. Recently Amazon shared about its prime members which

are figured to be 100 million. The company recently increased $20 for each prime

membership. And it is also logically correct as it is proving the prime members with tons of

facilities. This one decision increased Amazon's revenue by over a billion dollars and an

increased profit margin of 15% or more (Finkel, 2019). There are many other products that

are being launched by Amazon and is helping Amazon in generating profits, these products

include speakers by Amazon known as Alexa, TV fire stick and more.

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 Fig. 2: Profit generation; Source: www.cbinsights.com

The other issue related to the company is about its competitors like Walmart and is trying to

act like complete rival to the company. Walmart's continuous fight with Amazon for the retail

crown is growing great past retail, and it's constraining one of the biggest organizations on

the planet to rethink its DNA. Over the most recent a half year alone, Walmart has banded

together with scores of tech firms to all the more likely rival Amazon and gain ground in

business sectors that may wind up significant years down the line. It additionally started re-

examining how it sees itself as a traditional giant box trying to play with the most powerful

technology based player. To overcome the impact of Walmart’s evolution and competing

concept and strategy, Amazon now starts to build roads to disrupt physical retailers. Amazon

Go by Amazon is a totally new concept and is looking to revolutionize the concept of the

self-serve convenience store.

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 Fig. 3: Retail Stores by Amazon; Source: https://etailwest.wbresearch.com

Despite of all the issues in the company, Amazon never fails at identifying the issues running

with the company and proposes an immediate plan against the investigated issue maintaining

and managing all the problems.

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Final Report

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 Executive summary

Amazon.com, Inc., is the largest e-commerce business organisation with the highest revenue

in the field. And this is a conceptual fact that every organisation big or small have some

issues running in the management and administration. The report aimed at discussing about

challenges that are faced by the company “Amazon”, also analysing and identifying the

solutions regarding these challenges and issues. The challenges to be identified were in varied

fields such as professional accounting, management in the organisation and also on the

grounds of public relation issues persisting in the company. The report demonstrates the

reasons for the issues that persist in the company, further also giving solutions based on

qualitative analysis and use of key secondary data sources available. Solutions to the issues

are also provided in the report as suggestions to the company, Amazon.

Further the report emphasises on the recommendations and suggestions that can be made to

the company for better growth and overcoming the challenges persisting in the company.

These recommendations are based on key secondary data and some of self-recommendations.

Planning of the future scope in the company analysing the future opportunities is also done in

the report.

Background of The Company

Amazon.com, Inc., is an American worldwide innovative organization situated in Seattle,

Washington, founded on 5 July 1994, the company’s major goals are to focus in e-commerce,

cloud computing, and artificial intelligence. Amazon India propelled its activities in June

2013. The organization before long propelled its site Amazon.in which is putting forth clients

a wide assortment of decisions in attire, perishables, family unit things, books, motion

pictures, TV programs and nearly everything that an individual requires. On the absolute first

day of its tasks, the organization got in excess of 10,000 requests. Amazon India is a backup

of US web based business giant Amazon Inc. The parent organization Amazon was

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established by Jeff Bezos in 1994. Amazon is the largest e-commerce marketplace and cloud

computing platform in the world as measured by revenue and market capitalization and is

also ranked as the second-largest private employer in the United States with approximately

566,000 employees. Also Amazon is a company that offers varied opportunities to its

employees and stakeholders. It works and tries to succeed considering and following the four

principles that involves customer obsession rather than competitor focus, passion for

invention, commitment to operational excellence and long term thinking.

According to Kantor et al. (2015), Amazon aims at supporting small businesses and further

empowering these businesses to reach millions of customers. It has been proving job

opportunities to almost 125 people every single day, investing a huge sum of $100 billion on

providing job opportunities in US alone.

Topics Being Studied

The topics that are being studied in the report are related to largest online retail company

Amazon, further focussing on the identification of professional accounting, management and

public relation issues in the company. The topics includes issues related to every topic

associated with the company with a solution to the issues. The report discusses about the

issues, the root causes for the issues and also provides with a future solution that has been

provided against the issue or is into a planning phase that is to be executed. The issues in the

report are identified in the company “Amazon”.

Issues that are being analysed

Amazon being the world's biggest online retailer and a pioneer in the internet retailing

section. In spite of the fact that it began as an online book shop, its achievement in its

endeavour impelled it to differentiate into selling whatever can be sold on the web. Further,

Amazon has additionally extended internationally and now works almost all over the world

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through a blend of localised online portals and globalized delivery and online systems. Being

a huge organisation, there are many fields among which several issues can evolve. Some of

the issues faced by the company or future issues that can arise are analysed and discussed in

the report. Some of the issues are:

 Balancing and maintaining the sales and accounts in Amazon is considered to be an

issue under professional accounting section, where the company do not generate

proper invoices for the customers and the third parties, causing confusion and

accounting errors related to taxations in the company and also with the third party

vendors and customers. According to Lenz (2018), there was a recent violation of the

taxation law by the company, where the company continued to pay the taxes on the

previous revenue generation list while the company’s revenues were found to be

expanded.

 Some issues are also faced regarding keeping up with the E-commerce growth,

abiding of laws in the different countries while expanding globally is a difficult task

to manage, as each and every country abides different rules and regulations.

According to Sawyer (2018), with new and changing of laws and exchange

understandings, financial subsidence and political up rest, there's a great uncertain

deal right now around government guideline which impacts organizations like

Amazon, web based business retailers. Organizations should watch out for

authoritative effects including information assurance, tax assessment, online

instalment administrations and limitations and laws around vitality utilization.

 Further, on trying to scale up their operations and add new products to its list,

Amazon specifies that this development expands the complexity of their business and

spots critical strain on the administration, work force, activities, frameworks,

specialized execution, budgetary assets, and inward money related control and

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 revealing capacities. Amazon further specifies that it will most likely be unable to

oversee development effectively, which could harm the development, and adversely

influence the working outcomes.

 Further the challenge that is identified in the company is the risks of International

Expansion, where the company has a little operating experience and may not initially

benefit the company as initially it is really difficult for a business to set up, create, and

keep up global tasks and sites, and also advertise and promote the business globally.

Competing with business rivals like Walmart is also another challenge for the

company. This cause persisted due to Amazon lagging in promotional and

advertisement activities. There are many other several issues that persist in the

company or persisted in the past. But, Amazon after facing all the issues never fails to

resolve them and move ahead.

Recommended Suggestions

It's nothing unexpected that Amazon continues to grow and become a more popular company

rising with its sellers. With $88,000 being spent every minute globally on the site, Amazon

continues to be the top most e-commerce business site. There are several recommendations

for Amazon for better management, quality and customer satisfaction. The customers will

always demand more and more from the retailers, but some of the recommendations made by

the customers can be really considered. Amazons lags at taking customer and stake holder’s

reviews and further considering and acting on them. Prothereo (2018) states that 88% of

consumers now say that they trust online reviews as much as personal

recommendations. Other recommendation is, Amazon needs to be a bit more

competitive. Although the company holds the highest position in the market but leaving

the strings loose now, can affect the company in future. Setting up more platforms for

advertisements and promotions can really benefit amazon in dealing with the

competitive rivals like Walmart, eBay and more. More advertisement can definitely

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benefit the company with generating more revenues and profits. Apart from

advertisements, Amazon is too restricted with its marketing strategies. Amazon should

try marketing outside, i.e. applying marketing strategies on various platforms such as

WordPress etc. by posting regular blogs and articles regarding the company’s success,

new products and more. Rectifying their accounting issues and working on them will be

really great, also providing continued reports of the details about the company to the

systems can be beneficial for the company, as it will eliminate all chances of

misconceptions and confusions to occur in the company systems. Proper management

regarding abiding the rules and regulations of different countries can help Amazon

expand their business in varied aspects.

The recommendations provided can definitely help Amazon with growing in terms of

revenue, in terms of pioneer and even in business. There can be many other

recommendations regarding the issues identified which can help Amazon in growing.

Plan of future study

After analysing all the issues, challenges and problems associated with the company Amazon,

its future opportunities can be idealised from studying the SWOT analysis of the

organisation. The planning of the future study of Amazon can be continued by analysis of the

SWOT analysis for Amazon. The future study in the field can be identification of

opportunities for Amazon in the upcoming years. There are many opportunities still lying

vacant for Amazon and the future plan is to work on analysing the scope of these

opportunities. These opportunities including maintaining the privacy and security concerns in

the online applications and websites. By revealing its online instalment framework, Amazon

has the chance to scale up significantly, their security and protection regarding the website

and the online payments. The customers related to Amazon are most worried about the

security measures related to the website and online payments. Further, this would improve

the organization's profits and revenues that are generated from online payment gateways. The

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next opportunity for Amazon is increasing more products under its brand name rather than

doing business with the involvement of lots of third parties. The products with the brand

name of Amazon will obviously generate more revenues to the company.

Working on the business expansion risks and focusing on expanding more sites in the

emerging market which would surely give it an edge in the urban aggressive web based

retailing market.

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 References

Annie Gaus. (2019). Amazon's 5 Biggest Challenges in 2019. Retrieved from

https://www.thestreet.com/technology/amazon-key-challenges-for-2019-14825146

Chris Daniels. (2018). For Amazon, the communication challenge is just beginning.

Retrieved from https://www.prweek.com/article/1518846/amazon-communications-

challenge-just-beginning

Eugene Kim (2018). Amazon’s accounting system for sellers crashes a day after search

malfunction. Retrieved from https://www.cnbc.com

David Finkel (2019). Amazon Just Did Something Brilliant to Increase Its Profits (and Why

You Should Copy It). Retrieved from https://www.inc.com

Kantor, J., & Streitfeld, D. (2015). Inside Amazon: Wrestling big ideas in a bruising

workplace. New York Times, 15, 74-80.

Lenz, H. (2018). Aggressive Tax Avoidance by Managers of Multinational Companies as a

Violation of Their Moral Duty to Obey the Law: A Kantian Rationale. Journal of Business

Ethics, 1-17.

Sawyer, L.(2018). eCommerce: Amazon’s 2018 Challenges vs. 2019 Trends. Retrieved from

https://www.cms-connected.com

Prothereo, R (2018). 7 Tips for Amazon Sellers to Increase Sales. Retrieved from

https://ecommerce-platforms.com

Easton, M., & Sommers, Z. (2018). Financial Statement Analysis & Valuation, 5e.

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