Amazon.com the Most Obvious Balancing

amazon.com

The most obvious balancing loop for amazon.com is remaining innovative. Let's give a brief background on this matter before discussing further how this affects organizational effectiveness in the short- and long-term. In the period from 2001 to 2004, sales increased at Amazon with 126%, an average of 42% a year.

One of the main reason for this was that it offered an amazingly new and innovative service that immediately attracted customers. The idea of being able to buy a wide variety of books just by staying at home in front of your computer was, at that point, innovative. Even more so, the entire website was create so as to increase the idea of offering the best service to its clients.

Among the innovative features, one can mention the confirmation emails, that ensured the client that the order has been confirmed and was being processed, the reliability of online purchase and the policy of constantly communicating with the customers and letting them know if there were any problems, what was happening with their order etc. Other customer-innovative features included cross-sectional sales, an Amazon feature that advised what other books could be interesting for a customer who is about to purchase a certain book (the "customer who bought this book also bought" feature).

What happened in the meantime was not necessarily the fact that these features no longer existed, but that other companies and e-commerce websites began to copy them and transform them to adapt to their own businesses. The Amazon business model was no longer unique and its competitors had already joined with newer features.

This is why remaining innovative seems to be a key to Amazon's future success on the market. The company is now offering a larger portfolio of products on its website, brining it closer to the idea of a universal e-commerce site, but this does not necessarily mean it is being innovative. What amazom.com could do is implement new customer-friendly features that could both attract new customers and increase customer retention. In this sense, a medium term strategy would be to turn the company into a company oriented on customer satisfaction. This would basically include cross-functional teams of employees from different areas of the company (marketing, sales, it and technology, research and development) that can work together in order to maximize customer satisfaction.

Another instrument that can be used in achieving the balancing loop would be to increase the number of books that can be purchased via amazon.com. The company could start operating on a slogan such as "there's nothing you can't find here." It can also find new ways that it can turn its commerce from virtual closer to real. This would mean, for example, improving the sampling capacity. At this point, amazom.com provides features such as sample pages from a book or particular tracks from a music CD. This can be expanded on.

A reinforcing loop at amazon.com is, in fact, its capacity to attract new customers. A reinforcing loop will be an action that influences itself so that it will cause growth or decline in the company. In my opinion, Amazon's capacity to attract new customers will bring in additional revenues and the capacity to further develop the business.

One of the main reasons for this relies in the actual growth of the company up to this point. While founded during the crazy dot - com era of the 1990s, the company had a moderate, but solid growth, rather than the incredible growth rates of some of the other dot com companies. Amazon.com attained profit only in 2002, but has since been profitably yearly, while many of the other dotcoms have simply gone out of business. This shows that the business model that Amazon has been using is sustainable and this further shows that an increase in the number of customers is likely to lead to further increases in the business profitability of the company.