Amazon: An Innovative Leader in Technology and E-Commerce - Essay Sample

Introduction

Alongside Apple, Facebook, and Google, Amazon is one of the biggest technology companies in the world. Founded in 1994 by Jeff Bezos as an online book market, the company has disrupted established industries through the use of technological innovation over the years (DePillis and Sherman 2018). Innovation has enabled the company's expansion into video games, software, apparel, electronics, furniture, among other products. Headquartered in Seattle, Washington, the multinational deals in e-commerce, digital streaming, cloud computing, and artificial intelligence (DePillis and Sherman 2018). The company also distributes downloads and offers streaming services of music, audiobooks, and videos through its Amazon Music, Amazon Prime Video, and Audible subsidiaries. Other subsidiaries include Amazon Publishing, Amazon Studios, and Amazon web services. It has grown to become the largest e-commerce in the world in terms of market capitalization and revenue. It surpassed Walmart in 2015 to become the most valuable retailer in the American market (Wingfield and Merced 2017).

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The acquisition of Whole Foods Market in 2017 further expanded Amazon's presence in the country's retail space (Wingfield and Merced 2017). In 2018, the company was ranked 8th in the United States by revenue (Fortune 2018). Amazon recorded earnings of $10.07 billion and a revenue of $232.887 billion in the fiscal year 2018, which is 30.9% increase compared to the 2017 revenue (statistica 2018). Ever since the company adopted an expansion strategy in 2007, sales have risen from $14.835 billion to 232.887 billion (statistica 2018). The company's market capitalization value stood at $802 billion in 2018 (Yahoo Finance 2018). With more than 600,000 employees, the organization has a global presence (statistica 2018). While the company has different retail websites for some countries, it also offers international shipping of its products. Just like all other modern-day organizations, Amazon is expected to incorporate sustainability into its operations. This paper seeks to discuss innovation management at Amazon as well as ways in which it supports the company's sustainability agenda. Moreover, the effect of process, product, and service innovation on the agenda will also be explored.

Figure 1: Amazon's Aggressive Growth Strategy (Ritcher 2013).

Innovation and Innovation Management

As the business environment gets more competitive and unpredictable, innovation has become one of the most fancied words in organizations. Moreover, as consumers increasingly seek new and more fashionable products and services, innovation is becoming a competitive advantage among firms (Greenwald 2014). Innovation refers to the process of developing new ways of doing things. It mostly involves creating newer and more efficient products, products, services, and ideas. It does not necessarily involve the invention of new products but also changing the business model to respond more to the needs of the industry. Other than giving the organization a competitive advantage, innovation catalyzes growth and helps organizations adapt better to changes in the business environment (Pisano 2015). To be successful, innovation should be incorporated into the business strategy and efforts must be made to entrench it into the culture of the organization. Research and development, as well as strategic planning, are critical steps in the innovation process. An analysis of the market trends should be carried out, customers and consumers consulted, and advice should be sought from different resources. On the other hand, innovation management refers to the activities, practices, and decisions that help actualize a particular idea in order to create business value (Tidd and Bessant 2018). Innovation management focusses on the creation of new products, services, and technologies.

Figure 2: Model for Employee Innovation: Amazon Prime Case Study (Carpenter, 2010)

Over the years, Amazon has grown to become one of the most innovative companies in the world. Innovation is incorporated into every aspect of the company's daily work. The mission of the company is to become the most customer-centric company on earth. In line with this, the company seeks to create products and services that improve the lives of the customers. Amazon Go, Kindle, and Alexa are some of the company's products that have enhanced customer experience in the recent past (Connelly 2018). A passion for invention, customer obsession, and long-term thinking are some of the guiding principles in the company. To achieve the innovation goal, the company strives to empower innovators at every level and team within the company. Ideas at any level of the organization are adequately supported and funded. Some of the ideas have been developed into highly popular programs among customers (Amazon 2019).

Various practices within the organization have contributed to the entrenchment of innovation into the company's culture. Throughout its history, the company has intentionally sought to evolve and improve. For instance, while most other companies focus on the provision of a single-line of products, Amazon has grown from a bookselling entity into entirely different lines such as television. Through innovation, the company has also managed to overcome the cutthroat competition in the industry. Most importantly, the company's strategies are customer-oriented. The ideas pursued are meant to enhance the customer experience, a factor that has cemented the company's position at the top of the industry (Ayers 2017).

The Sustainability Agenda at Amazon

More and more organizations in different industries are embracing sustainability owing to the benefits associated with it, the increased expectations on corporate responsibility, and the increasing prevalence of transparency. Research shows that 62% of executives see sustainability as an indispensable strategy in the highly competitive environment (Haanaes 2016). Sustainability can be described as a business approach that seeks to create long-term value by taking into account the operation of the organization in the social, economic, and ecological environment (Dyllick and Muff 2016). In light of this, Amazon has shown significant commitment and invested heavily in sustainability. The company sees sustainability as a tool that enables it to win on all fronts since the practice is not only good for communities and the planet but also customers and business. Moreover, the company's vast footprint means that investment in sustainable development can have a more significant impact than any other company (Zoen 2019).

The circular economy is one of the elements of Amazon's sustainability agenda (Murray 2018). Under this element, Amazon seeks to eliminate wastage of resources at all levels of the organization. The redefinition of the model of consumption has helped achieve this. The company also invests in increasing efficiency of energy use and increases the use of renewable energy to minimize the company's impact on natural resources. The company's desire to power its global infrastructure using renewable energy was boosted when the company launched a wind farm that adds more than 1 million megawatt-hours (MWh) into the grid (Murray 2018). Plans are underway to install at least 50 solar rooftops across the company's fulfilment center network in the next few years (Murray 2018). Amazon also seeks to enhance customer experience by partnering with other players to develop sustainable packaging that reduces wastage, delights the customers, and ensures that products reach the customers intact. The company has also sought to conduct business ethically and lawfully. It also engages suppliers who are committed to similar principles.

Most of the sustainability issues in the industry are cross-cutting. To achieve them, Amazon collaborates with other knowledgeable and credible players in the industry. For instance, the company supports the Paris climate agreement, which seeks to address the issue of climate change (Bodansky 2016). The company also became a member of the American Council on Renewable Energy, a move that reflects its commitment to efficient use of energy and adoption of renewable energy. The company is involved in several other initiatives meant to enhance sustainability. Innovation has contributed immensely to the company's sustainability agenda, as shown in the section below.

The Place of Innovation in Amazon's Sustainability Agenda

Figure 3: HPE & Amazon insights: Conquering the Data Divide and Inspiring Innovation CITATION Ala17 \l 1033 (Alam, 2017).

As discussed in the previous section, sustainability is of great importance to any organization. However, though Amazon's innovation culture over the years is legendary, the same cannot be said about its sustainable development. In the course of its history, the company has been criticized over recycling, worker treatment, and other sustainability metrics (Gunther 2016). As evidenced by the examples mentioned earlier, the company has embraced a more proactive approach to sustainability. The results of this move are already visible, and the company is on the right track to leading its peers on sustainability development too (Gunther 2016). First, the company brought together an experienced team on sustainability matters (Gunther 2016). The team then set ambitious goals on sustainable development and made their voice louder in various smart environmental policies. Since transparency stands out as one of the most significant opportunities in sustainability, the company seeks to communicate directly to the customers on issues deemed necessary. For instance, the company developed the Sustainability Question Bank, which enhances accessibility to environmental information. The feedback gotten from the platform helps the company learn the sustainability issues most relevant to the customers (Murray 2018).

Most importantly, the company has been leveraging its expertise in technology to enhance innovation, which, in turn, promotes sustainability (Murray, 2018). As stated earlier, technological advancement has been instrumental in the growth of the company. Regarding sustainability, the company uses technology and innovation to achieve its sustainability goals. For instance, to develop environmentally friendly packaging, the company is developing a software that would enable shipping of products without necessarily being in an over box (Murray 2018). The company is also seeking ways to communicate and exchange information with workers in the factories and factory owners to further the sustainability agenda.

Through the optimization of its transport networks, the company seeks to minimize carbon emissions as a way of addressing climate change. The Shipment Zero is an initiative announced by the company in early 2019 that seeks to make 50% of all shipments zero carbon by 2030 (Humphries 2019). A partnership between the company and the government of the United Kingdom sought to use drones to deliver small parcels, a move that would significantly contribute to the company's sustainability efforts (Lee 2019). The designs and operations of buildings in Amazon are meant to enhance energy efficiency. The existing buildings are also being retrofitted. For instance, the company's newer offices feature energy-efficient systems such as remote power and energy monitoring, advanced building management systems, among others. The heating of the company's new buildings in Denny Triangle, Seattle, uses an innovative approach that recycles energy from the data center (Caulfield 2015). The approach is more than four times more efficient than the traditional heating approach (Caulfield 2015). The company's corporate offices in Munich are built using sus...