Issues Related To Amazon In Different Countries
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Issues Related To Amazon In Different Countries
Thesis: This paper is a reflection on some of the problems faced by three developed countries concerning amazon.
Amazon is an American based multinational company, which deals with technology. This company has its headquarters in Seattle and has employed 750,000 people. Amazon is considered to be among the big four technology companies, alongside Microsoft, Apple, and Google. The main focus in the amazon company is ecommerce, digital streaming, artificial intelligence as well as cloud computing.
In this project, the main focus is on Amazon, as well as some of the issues related to this company in the following three countries. They include; the Japan United Kingdom and lastly Germany. The project will highlight the problems for these companies through a detailed analysis of each company. It will also provide some recommendations which may work to help each of these countries in dealing with these issues.
Japan.
Japan, a country situated on an island in the eastern parts of Asia, holds a population of about 125 million people. This country is known for its diverse technology and unique cultures and traditions. One of the most used cars around the world (Toyota) is a product of Japan. This is to show that Japan is well advanced in terms of the technology used in the country. The relationship between Japan and amazon began in 2000 when Jeff Bezos introduced online shopping to the Japanese culture. Setting foot in Japan was not so easy for amazon since they did not understand the operations in Japan.
As a result, through the introduction of amazon Japan, several issues have been addressed. This has hindered an effective growth for amazon in Japan and has had companies such as Rakuten become the most dominant and prominent company in terms of online shopping.
Issues related to amazon in Japan
Some of the problems which have hindered the success of this multinational technology company in dominating the Japanese market include the following;
Competition between Amazon and Rakuten. This is the biggest challenge or issue which amazon Japan is facing. Rakuten is an established Japanese company which has already dominated the market space with a loyal customer base. On the other hand, Amazon is an American based company with little knowledge of the Japanese culture, and whose reception is not well appreciated in Japan. In an analysis conducted for both of these companies, it shows that Rakuten’s consumers and revenue are higher compared to that of amazon. This is because it has managed to establish a stable customer base which allows the business to thrive better than amazon. However, in the past years, amazon has become a much popular technology company in Japan. The rise of amazon has been forced by the high competition in the country. Below is an analysis which shows the performance analysis between the two companies.
High consumption of Whole foods and fresh foods. For the longest time, amazon was referred to as the highest distributor of whole foods and fresh foods at an affordable price. Upon entering the Japanese market, the company developed much higher reception which promoted the company’s growth and helped the company to develop a higher customer base. However, a few years later, Rakuten emerged with a collaboration with Target for the supply of much affordable fresh foods and whole foods. This became a threat to the amazon Japan Company and forced the company to sink into a depression in terms of their revenue. Such issues forced the amazon Japan Company to re strategize other ways to attract more customers into using their platform.
Decrease in revenue. The high competition between Rakuten and amazon has led to the company experiencing a decrease in revenue for the company. Upon arrival in Japan, the company experienced a better reception and recorded high sales. However, with the high competition with the Japanese technology company, Amazon Japan’s economic revenue dropped since they had to create better initiatives to win back their customers. This has led to the company selling their goods at a much cheaper price in order to be able to sustain the business. Although this method has worked for the company, it has also resulted to a decrease in profit, which has affected the amazon Japan revenue.
Language barriers. Amazon being an American multinational company, it acts as a biased company in terms of the language and communication used in the site. For this reason, a person from the US or UK, is not able to access the amazon japan site since they will be unable to understand the Japanese language. It is also a disadvantage to an individual without the Japanese knowledge but is living in Japan. This is because, he or she would not be able to read or order anything from the amazon site, and hence the site is not helpful to such consumers. For this reason, the site ends up limiting most of its potential consumers who as a result end up using other sites to purchase whatever they need.
Age and population. Out of the 125 million people in Japan, the highest population is that of the old generation. This number is an issue in the successful growth of amazon in Japan because, most of the people in this generation prefer going to a physical store to purchase their products. As a result, the ecommerce market is affected by this population. The other issue related to the age and population is that, the small amount of people using these websites prefer Rakuten which is Japanese based because of their familiarity with the products offered.
There are many more issues which have emerged between amazon and Japan. However, some of these issues have helped to improve the company’s growth in Japan. This is seen whereby in 2017 and 2018, the company reported higher sales compared to Rakuten. The efforts to improve the company’s reputation and sales has been based on the changed and reforms which the company have made to conform to the Japanese cultures and traditions.
Recommendations for the issues related amazon in Japan.
The following are some of the solutions recommended for the company to help in its growth and development in Japan.
- Amazon Japan should introduce a technology system through which any foreigner using the website is able to access the amazon japan website using different translations based on their language. This will help to increase the number of foreign customers living in Japan, hence the company will experience a much higher revenue.
- The amazon Japan needs to ensure that they deliver quality yet affordable products to the Japanese customers in order to sustain their business in the whole foods and fresh foods market. This will help to defeat the Rakuten market which depends on the US based target stores for their supply.
- As a way of increasing their competition, the amazon japan should liaise more with the traditional farmers within Japan, so that they can have direct access of foods and products to be sold. This will increase their production capacity and as a result, the company will become more dominant in the country.
- In order to increase the company’s revenue, amazon Japan needs to develop strategies through which they can attract a larger customer base. This includes; creating a target market and increased marketing to help convince consumers in trusting the site. This will create an overflow of consumers for the site and hence the company’s revenue will be increased.
- Since the highest population in Japan is of the older generation, the amazon japan company should utilise that knowledge for their own benefit. They could use some of these individuals to help in the marketing of the company, so that the Japanese people can trust the company more.
United Kingdom
The United Kingdom is an island territory comprised of four different countries. These include, Northern Ireland, Europe, Wales and Scottland. The population in United Kingdom is of about 66 million people where the majority of them are of the older generation. In 1994, Jeff Bezos saw the need to open up another branch of the amazon company in the United Kingdom. At first, the company began as an online book store and has since achieved maximum growth into becoming one of the leading retailer in United Kingdom. However, just like any developed company, the amazon in United Kingdom has experienced several issues.
Issues related to amazon in the United Kingdom.
The following are some of the issues related to amazon in the United Kingdom.
Selling of illegal items. In 2015, the United Kingdom government banned some of the products sold in amazon. Some of these products included a pepper spray gun, which was considered to be illegal according to the United Kingdom rules and regulations. This created such a big scandal for the company which contributed to a stagnant growth.
Employee mistreatment. There have been reports that Amazon Company in the United Kingdom practised employee mistreatment. These allegation have existed in the company due to poor managerial leadership in this country. As a result of these claims, most people began to lose their trust for the company which affected the company’s customer base. However, there have been several remarks made by Jeff Bezos who is the company’s founder that these were just allegations made with a motive to bring the company down. However, the claims of employee mistreatment are still becoming more intense which puts the company’s reputation at a risk of becoming less dominant in the country.
Avoidance of Tax. The amazon company in the United Kingdom has been reported to be negligent in paying taxes. This has affected the overall performance of the company in the country in terms of customer loyalty to their consumers. In a recent analysis by the Guardian newspaper, it was reported that the amazon United Kingdom generated up to 3 billion euros in terms of the company’s sales. However, none of this amount was directed to pay the corporate taxes as required by the government. As a result of this non-compliance behavior by the amazon UK Company, it has resulted to an unethically fit image by other suppliers, the government itself and even some of the potential consumers. This has contributed to the slight decrease in the business of this company.
Product substitution. There have been several cases of the substitution of products by customers who use Amazon Company in United Kingdom. This is whereby, the people get to receive totally different products from what they initially ordered. For example, the quality and size of the product is altered, hence the customer ends up receiving a totally different products from what they had ordered initially. These cases have become so common in the United Kingdom, which has led to the government intervening for these consumers. This has led to the company being affected in terms of sales since, most consumers are in fear having a substituted product delivered to them.
Recommendations related to amazon in the United Kingdom.
Having analysed these issues, the company should now focus more of creating solutions which would be used to help the company retain its stability in the United Kingdom market. These solutions will also help the company to increase in its revenue as well as crate a larger customer base. Some of these solutions which would be best recommended for the amazon United Kingdom Company include the following;
- The company should ensure that they become more conscious in paying their taxes in order to be on the safer side with the government. This will help for other stake holders and suppliers to trust the company more in doing business with them. Such transparency is good for any company.
- Amazon Company in the United Kingdom should ensure that, every product sold in their site is compliant with the rules and regulations set by the UK government. This will help to ensure that the company sells products that are certified and not illegal products as mentioned by the UK government.
- A solution for the product substitution as addressed is such that, the company should upgrade their technology in a way that the customer is able to confirm the product before purchasing it through a 3d technology. This will help both the company and the consumers through a system, to confirm the type and quality of the product being purchased. Through this, there will be less incidences of product substitution reported in the company. In the case of a substituted product, the n the company should claim full responsibility and allow for a replacement for the product as per the consumers choice.
- In order to build a proper company image, the amazon company in United Kingdom should ensure that they treat their employees with proper respect and fairness. Through this, the employees will show better performance in their work respectively and the company’s image will not be tainted with such negative critics which would largely affect the business.
Germany.
Germany is a country located in the western parts of Europe with a total population of about 82 million people. The country is surrounded by beaches, forests, mountain ranges as well as rivers. The middle age group of 40 to 50 years occupies the largest population in Germany, followed by people of 65 years and above. This shows that, the number of investors in this country is also high, compared to the number of consumers of online products. In 1998, the amazon company opened its branch in Germany, and has since become one of the top ten best e commerce businesses in Germany. Over the years, the company has endured several challenges vs it struggles to retain its position in the top ten list of best e commerce businesses around the country. However, there are several issues which hinder this success from happening.
Issues related to amazon in Germany.
The following are some of the issues which affect the amazon company in Germany. They include;
Extreme pressure to be productive. The employees working at amazon Germany have reported that they are demanded to be extremely productive even if it affects their health status. This misconduct by the amazon employers has shown the kind of employee mistreatment taking place in the company. However, the company has rejected these allegations claiming that it is a set up to bring down the business. Having achieved such major success in Germany, amazon looks forward to increasing their sales and as a result, they end up putting pressure on their employees.
Underpayment of workers. The issue of amazon underpaying their workers is experienced in all branches of the amazon company worldwide. It is said that the average worker in amazon is payed less than the minimum wage required for all workers. This issue was reported in Amazon Company in Germany, and the complaints about this issue have been addressed by different workers in the company. Claims for these allegations have been justified by amazon, claiming that the benefits given to the workers is equals to a better salary pay. Such issues have led to a bad reputation for Amazon Company in Germany.
Selling of counterfeit products. In 2017, the german consumers of amazon realised that the site was selling fake products. This included products such as electronics from apple which were illegally manufactured in China and sold in form of genuine products to the german consumers. This largely affected the business, since most people began to doubt the quality of the products from amazon, and the company ended up losing most of their trusted customers.
Although the company has managed to endure several challenges in order to stay in business; there are some of the solutions which would help the company retain its customer loyalty and still increase its economic revenue. Through these recommendations the company will be able to understand its flaws and be able to analyse its German market better.
Recommendations or solutions related to amazon in Germany
- The company should consider providing better treatment to their workers such as issuing them with off days so that they can relax more. They should ensure that there is a safe working environment for all employees. Through this, the employees will become naturally productive hence the company’s sales will increase.
- The company should consider paying their workers in a manner which bests suits the work done. This will help increase the motivation of the employees and eventually result to working diligently. This will help to increase the company’s sales and revenue by far.
- The company should develop ways which should ensure the credibility of a product. Before closing a deal with a supplier, the company should ensure that they completely investigate, more about the product in order to avoid selling counterfeit products to the customers.
Conclusively, Amazon Company sends up to 11 billion annually. In 2019, it was marked as the world’s largest advertisers. This amount of money is used to operate the business in the different countries it is based in around the world. This includes money used to buy, market and ship these goods. In terms of the CSR activities, the amazon company contributes to developing programs for the community which could help enhance and provide the community with a much better lifestyle. For example, developing healthcare facilities, developing educational centres for the underprivileged and promoting the conservation of the environment. Through these programs, the company is able to create a good perception and image of their goods and services to their consumers. As for the managers who run the amazon company, it is important to observe and adhere to the consumer demands because without the consumer, there is no business to be handled.