Corporate Controls and Structure of Amazon

Amazon has many corporate controls in place to ensure the integrity of the organization. First, they have a code of business conduct and ethics that lays out the ethical rules that must be complied with. They have a system of internal auditing and controls in place to make sure that the company is not altering financial statements or committing any illegal activity in the financial reporting process. Amazon has an audit committee that is responsible for these types of activities as well as reviewing complaints from within the organization. Organization members are encouraged to anonymously submit instances in which employees are engaging in questionable accounting or auditing matters. The audit committee also helps the board of directors in verifying the accuracy of all financial statements and its compliance with all legal requirements.

In terms of the structure of the company, Amazon is likely using a multidivisional structure. Amazon is made up of multiple different divisions each with a vice president that reports directly to the CEO. Some of the divisions within Amazon, each with an officer overseeing them, are business development, seller services, Amazon web services, worldwide digital media, world wide operations, international retail, and North American retail. Each of these officers are responsible for overseeing a specific division of the company and reporting back to the CEO.

Amazon's Cooperative Strategy

Amazon.com has cooperative strategies in place with numerous other merchants. One such cooperative agreement is between Amazon and CDNOW, which is hosted by Amazon.com. Some other notable companies that Amazon has agreements with include: Target, bebe, Sears, Timex, and Lacoste, to name a few. For other companies such as Marks & Spencer, Benefit Cosmetics, and Mothercare, Amazon provides the ability for their customers to interact with the company over the Internet, in stores, and through customer service centers. All of these partnerships result in positives for all involved. While providing these companies with a variety of services, Amazon benefits from the ties these services create. These partnership agreements bring customers to Amazon's online marketplace that normally might not shop there. Another notable partnership that Amazon has is with AOL. For AOL, Amazon's Web services provide necessary services for AOL's shopping section of their website. Until 2006, Amazon had a partnership with ToysRUs.com, in which people typing in ToysRUs.com would be redirected to Amazon's toys and games section of their website.

Amazon's International Presence

Amazon.com has a considerable international presence in many countries. Amazon has established separate international websites for Canada, the United Kingdom, France, Japan, Germany, Austria, and China. This allows Amazon to offer products and customer services specifically tailored for the country they are involved in. This means that German customers are able to access a version of Amazon.com in German instead of using the website we have in the United States. Amazon is in a unique situation internationally because it is a online retailer. This means that other people throughout the world have access to the website and can view its products. Unfortunately, Amazon only offers international shipping to certain countries.

Due to the nature of their business, Amazon is engaged in exporting of their products. They have the ability to reach people throughout the world online, and then export their goods to the countries involved. Since Amazon has established international sites in a variety of countries, it is more difficult to describe the type of trade they are engaged in in those countries. In these countries, Amazon is most likely engaging in greenfield ventures. Amazon has a corporate structure that allows it to succeed in different countries. The international versions are essentially extensions of the business in the United States. The international versions of Amazon.com are similarly situated to the American version, but with different products advertised in a different language.

Amazon Diversified?

Amazon as a company is extremely diversified in the types of products they offer to consumers, but as a whole are they diversified? I believe the answer to this question is no. Amazon is an internet retail giant, but that is basically all they are involved with. They have not diversified themselves into other industries or business ventures. Being focused on a single product or industry is a common strategy among some top Fortune 500 companies, although in the long run this strategy prove less successful. Amazon has a commanding presence in the online retail industry and their diversification in product offerings will likely keep them strong in the near future. However, there might come a time in which Amazon feels the need to become more diversified in the type of industries or business they are involved with. Being diversified can offer strong long term advantages to a company. It can allow a company to weather an economic downtown or a decline in a specific industry, as well as create greater growth opportunities. It is probably just a matter of time before Amazon diversifies themselves into other segments of the retail and business environment.

Amazon's Competition

Amazon.com has numerous competitors in the segments of the retail industry they are involved in. The biggest online competitor to their business operations as a whole is eBay. eBay is probably their biggest online competitor because they are a huge company that sells virtually everything that Amazon sells. They also share a common strategy by allowing individuals to create their own product listings and sell their goods for a small fee or percentage of sales to the company. Amazon's core business practice of selling books also faces competition from numerous companies both online and offline. Some of the competitors online consist of companies such as Alibiris, Textbooks.com, and Textbooksrus. Although there are numerous competitors online, perhaps the biggest competitor in the book selling industry is a brick and mortar store. Barnes and Noble is the chief competitor for Amazon in terms of book sales, having a huge presence throughout the nation. Wal-Mart is another company that is considered a big competitor for Amazon due to their considerable presence throughout the country and on the internet. Although all of these companies are direct competitors to Amazon in one way or another, I believe that Amazon holds competitive advantages over these companies in numerous areas. I believe that they are a more reputable company that eBay or any of the online bookstores, and offer a wider range of products than Barnes and Noble or Wal-Mart.

Amazon's Business Level Strategy

I think Amazon has created a unique business level strategy that has had everything to do with their success. This strategy has led them away from being a traditional brick and mortar store such as Walmart, and led them in the direction of becoming the Walmart of the internet. Their strategy has taken advantage of the ease and constant availability of the internet and online shopping in order to become a successful business. This strategy has enabled them to not have the traditional costs that large retailers face such as construction and maintenance of stores, and at the same time, has allowed them access to every person with an internet connection. Since Amazon allows other sellers to advertise and sell products on their website for a fee, the company has capitalized on an opportunity to make money off of goods they never physically posses. This strategy allows for greater efficiency in selling goods by not having goods sitting in a warehouse waiting to be sent out. Individual sellers instead bare the responsibility of storing and shipping goods. It is obvious to me that Amazon has been using this business-level strategy to constantly innovate and be a leader in the internet retail industry.

Amazon and Microsoft Strike Deal

Within the past few days, Amazon and Microsoft announced that they have signed a patent cross-license agreement which gives each company access to some of the other's intellectual property portfolio. The financial details of the deal have not been released, but it is expected that Amazon paid Microsoft a certain amount to avoid potential litigation involving a software program that might infringe on Microsoft's intellectual property. Although this deal covers a broad range of technology, one major piece of technology that Microsoft will have access to is Amazon's popular e-book device, Kindle.

This comes at a time when Amazon has recently announced an expansion of the Kindle product. Author's and publishers from around the world now have the ability to upload books in Spanish, Portuguese, and Italian. This move doubled the number of languages that were available on Kindle. Before the expansion, publishers could only make available books in English, German, and French.