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The production ratio of every business is determined by its technological standard, and this study focuses on Amazon Inc., which deals with the sale of retail products to individuals. In recent years, company leaders have had to strategically integrate technologies into their jobs in order to provide higher-quality offerings to customers. The Report includes strategies for guiding the organization to become the world's leading online enterprise.
Amazon Inc. is a technology company headquartered in Seattle, Washington, that specializes in e-commerce and IT services such as cloud computing. The company was started by Jeff Bezos in 1994 by offering online bookstore services and later added several products such as furniture, toys, food, jewellery, electronics, and apparel (Amazon, 2017). The company also then expanded the business to offer cloud computing services to corporations and start-up companies that require the services. The technology level in Amazon has diversified their operation techniques through the addition of more products in their business models such as the production of consumer electronics such as the fire tablets, amazon echo and the kindle.
Amazon operates its business through electronic means which offers services through the internet targeting 3 billion online customers. The tech giant has managed to become the largest internet retailer after measurements of the revenue and market capitalisation closely followed by Alibaba in sales per year. Amazon’s revenue income stands at 135.98 billion in the year 2016 with an operating cost of 4.186 billion dollars. The same year the organisation got a net income of 2.371 billion with total assets reaching 83.402 b (Thibault & Aoude, 2016).
1.1 Critical Analysis of the Business Model
A successful corporate requires a rigid business model, and as such, Amazon’s type is diversified into offering multiple products through the website. It specialises in selling and delivering products directly to customers who access their site. A proportion of merchandises are open to shoppers through Amazon's online storefront with an additional small profit that keeps the business operations. The physical inventory is preserved in the company's massive link of warehouses and can ship products to clients. Amazon generates income from trading products like its e-reader, the e-book, and the fire Kindle (Amazon, 2017). Moreover, it sells smart home applications like the echo as a virtual assistant using mobile application purchases to maintain the artificial intelligence. Majority of the customers prefer buying products from Amazon due to the assumption that the items are cheaper and have reliable delivery systems such as prime air (Yurieff, 2017).
Amazon also offers a platform through the partner retailers program and allows other vendors to sell their products through a system where only fast-moving commodities are displayed on the storefront. The products sold through the process help avoiding dilution of profit due to the slow-moving goods. Other than direct sales, the retailer's program allows the vendors to list their items and pay a small fee for the transactions as commission. The organisation also has a subscription-based business model known as amazon prime and owns an electronics product line. The Prime account users, part of an annual fee, which allows them to stream media and other digital content. Amazon prime enables customers to enjoy free delivery services for two-day or one-day shipping when they buy the devices.
1.2 Amazon’s Business Model and Technology
A variety of techniques have been integrated into Amazon’s business model where the cloud computing sectors employs infrastructure such as Active android, Amazon Cloud search, Apache( Tomcat, Hadoop, HBase )among others. The cloud computing technologies are advanced and give the organisation a competitive edge in service delivery over other companies. The efficiency rate of the techniques allows customers to prefer using it due to a little downtime. The company has also incorporated more technology such as CSC domain registration to offer reliable website domains (Business Insider, 2017).
New technology in the retail sector has improved amazon’s services delivery through the introduction of unmanned drone technology to offer a futuristic approach to shipping. Through filing for patents that features a fleet of delivery drones, the organisation can reach a broader market with faster and secure distribution. For example, a package delivered using a drone can arrive at the client's place in 30 minutes (Amazon, 2017).
2.0 Drone Technology
A drone is a form of a small quadcopter which acts as an Unmanned Ariel Vehicle (UAV) used in scenarios where manned flight is considered risky or inconvenient. In 2013, Amazon disclosed strategies for a new delivery amenity called Prime Air, which would use drones to deliver packages. In 2015 Amazon filed for a patent and the United Kingdom was the first to experience the futuristic technology. Bezos’s vision of implementing drone technology in shipping of goods was considered a farfetched concept two years ago where most individuals termed it as science fiction (Pitman, 2015). Today, Amazon’s employees estimated at 541,900 have had reduced tasks due to the tech and can work more efficiently in the warehouses relying on the drone to ship products.
2.1 Justification and Description
Drone technology can disrupt future shipping techniques since the company plans on building “beehive-like” towers where the drones will be stored and shall act as a centre for multi-level uses (Keeney, 2015). The centre will serve as a warehouse for customers within the specific city and aims to provide the fastest delivery options. The patent filed for the towers offer additional support to truck deliveries as well as establish a particular pick up points where clients can pick up the items purchased. The structures would be built vertically to balance with the buildings in urban areas, and Bezos predicts that every metropolitan would have one.
Often regarded as the tech giant, Amazon applies the technology efficiently through Prime Air which delivers packages lighter than 5 pounds and plans to increase the carrying capacity. The project comprises of drones weighing 55lb and can travel to speeds of 50mph. The UAV can deliver a product with a 10-mile radius and can follow the designated route to the client. After the launch and test phase complete, the drones were able to deliver goods faster to individuals in the UK in thirty minutes after the customer orders.
2.2.1 Cost of technology used
Prime air initial setup is considered to be substantial though the demand has increased for these service delivery and through shipping charges the technology can sustain the maintenance costs. Tasha Keeney calculates that prime air would cost an estimate of 88 cents if customers got charged 1 dollar delivery rates (Keeney, 2015). She also states the business would get a 50% ROI in the year since it will act as a faster alternative for shipping services. The drones used are estimated to cost 4500 dollars to produce with the company investing 1.49 billion to expand the prime air service. The chart below compares the pricing of drone delivery with other current technologies like trucks and ground services.
2.2.2 Advantages of technology used
The primary advantage of Prime Air plan is the speed at which the drones deliver goods. The traversing of steep terrains such as mountains, jungles are made more accessible since the UAV flies over the obstacles and can maintain speed with relative ease and can calculate shorter directions using the global positioning system (GPS) to deliver in estimated time hastily (Pitman, 2015).
The technology is also very flexible and can transport the product to the individual’s location not only at the specified address. It can pick the GPS location of the customer and delivers to wherever he is. Drone technology is not restricted to new infrastructure construction like roads or railways hence making it more flexible (Yurieff, 2017). The technology also allows easy distribution through the vertical take-off and landing (VTOL) mechanisms that allow the package to arrive at its precise location. Unlike other forms of transportation, the drone is not governed by having a set of fixed start and end locations (Airbone Drones , 2017).
The initial expense could be straining a company’s finances since the UAV requires goods with less weight as transportation to work efficiently. For products that exceed the maximum carrying capacity, other means of delivery are incredibly cheap due to the drone’s absolute energy requirements. For example shipping, a car would be more affordable using ship and rail transport (Miller, 2013).
The payload is hindered by the size of the drone. For heavy and bulky equipment the prime air would not be a suitable method of delivery since most drones have their payloads ranging 10-15lbs. The distance is affected by the battery capacity used to power the drone. In current reports, the battery can work for a short while before its recharged. The situation may continue until we have a leading advancement in battery expertise (Thibault & Aoude, 2016).
Discussion and Recommendation
3.1 Potential areas of application
The technology can be applied in other sectors to drive the economy forward with instances of drone application being depicted in intelligent agriculture. The division has adopted UAVs to conduct periodic rounds to keep track of any changes, especially in crop farming (Miller, 2013). In food production, the most devastating time for a farmer is during weeding and pest control where constant control may require hired help. A cheaper alternative would be to get a drone for unmanned assistance on the farm. It can satisfactorily support a farmer in checking the soil’s hydration levels as well as monitor progress. Some advanced technologies include sensory inputs on the drone with the aim to can calculate intensive evaluations.
Drone customisation to fit police surveillance needs has been done, and the application influences business regarding ensuring security has been upheld. The technology is being deliberated upon by several American states to legalise armed drones in the street to assist in crime fighting. Additional sensory inputs allow the UAVs to remain inactive unless triggered by authorised individuals (Airbone Drones , 2017). The drone is also a reliable method of surveillance due to its mobility in regions where it is extremely hostile for human soldiers to access hence its application in the military as well. It is made possible through the camera installed and communicates with other applications to accurately determine the area of view. However, such drones need robust security measure to protect against hacking and triggering battlefield functions.
Companies like Google have satellites, which they use to map areas of the world and the survey data channelled through applications like Google Maps which guides the drones to identify the required point where the customer is on a map. However, information based on traditional tools may take longer to update in case new structures are set up (Herman & Custers, 2016). Through drone technology, the development of mapping techniques from the camera and other sensory inputs can be done more efficiently. In property surveys, a drone is an essential resource for explorations, construction, forestry management, and archaeology.
3.1.1 Strategic value
The technology is expected to increase global revenues earned from drone sale to 7 billion by 2020 determined through regulatory clarification, costs and ongoing inventions that utilise the capabilities (Business Insider, 2017). The strategic value of applying this tech in business gives any organisation dealing with light deliveries a competitive edge. Drones make shipments faster and cheaper.
3.1.2 Corresponding business model evolvement
Courier Organizations like DHL, UPS have also adopted the delivery technology affecting businesses that prefer to use traditional approaches. The royal mail has decided to add some few change to the current business model, and Moya Greene proposed the postal service to adopt drone and autonomous delivery trucks for parcels and mail (Wallace, 2015). Such major companies have been influenced by the revenue stream and customer choice to use drone delivery technology for example when using amazon prime air.
In the business sector employing technology in various aspects improves efficiency and productivity of employees. Through the use of drones companies like Amazon have grossed billions in sales and hundreds of millions in a year due to the adoption of new tech. Drones are a recommended tools for online business that deals with goods delivery since they can act as advertising tools which in term brings revenue back to the company. It is a vital tool that has been seen to work fine as media marketing. For example, some restaurants have used drones to experiment serving food to customers instead of waiters (Airbone Drones , 2017).
Therefore it is recommended that many businesses approve that drone technology offers a unique, compelling and innovative ways to advertise their products and services.
Drones offer better delivery since unlike the trucks system where goods may be damaged in shipping, drone technology provides the whole business products and can transport fragile items better than traditional methods. Moreover, it is recommended by the Business Insider as it will adversely change goods and services delivery technology (Business Insider, 2017).
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