IntroductionAmazon, public and its effect on more traditional shopping

IntroductionAmazon, founded by CEO Jeff Bezos, is currently the biggest e-commerce organization on the planet. In addition to the strong hold the company has on online purchasing, Amazon leads in the areas of  logistics, cloud computing, data storage, payments, and even media. To their customers Amazon offers a wide spanning variety of products, many of which can be delivered within two days if not that very day, as well as streaming music, video service, e-books, and photo hosting just to name a few facets of the massive company. While the influence of Amazon.com almost seen as the new normal in the United States with 43% of all online sales for the US in 2016 dealing with the  the company, they also operates across the globe and are the fourth most valuable company internationally. This portfolio project will be focused on Amazon Inc. due to the growing reliance on the company by the american public and its effect on more traditional shopping options.Foundations of Global BusinessAmazon.com, Inc. has Global Marketplaces in the United States, Canada, Mexico, the United Kingdom, France, Italy, Germany, Spain, the Netherlands, Japan, Brazil, India, and China. Between these countries Amazon has over 500 physical locations for distribution and logistics. In addition to the countries that these marketplaces are based in they all serve neighboring countries. In total Amazon has customers in over 180 countries. For the purpose of this paper we will focus on their operations in Canada, Germany, and Japan (Amazon, 2017). With these three nations we can look at Amazon’s operations in major markets on three different continents. Not only are these countries major markets for amazon, all three are major players in the international business world. As such, Canada, Japan, and Germany are all members of the International Monetary Fund, The World Bank, and the World Trade Organization (World Bank, 2016) (World Trade Organization, 2017) (International Monetary Fund, 2017). The International Monetary Fund serves as a global organization that promotes international cooperation on financial problems and to allow trade between nations and assure its members have internal financial security. The World Bank endeavors to help members with making decisions in regards to international trade. Lastly, the World Trade Organization serves to oversee and standardize world trade.  All three nations joined the WTO in 1995 and are founding members. Canada is a founding member of the IMF and the World Bank and joined in 1945 while Japan and Germany joined several years later in 1952. These three major international institutions have guidelines to promote proper financial behavior, eradicate poverty, and international cooperation. As founding members or early adopters of these three organizations they were pivotal in the devising of these guidelines. The nations all report their economic data to domestic groups, avoid any type of currency manipulation, and pays the membership quota in regards to the International Monetary Fund. For the World Bank, Canada, Japan, and Germany all seek advice from bank staff before making major financial decisions and other membership duties. With the World Trade Organization all three nations abide by the agreements that they are party to. Canada, Germany, and Japan all three have a high level of transparency. According to Transparency International the three nations rank as 9, 10, and 20 respectively on the corruption perceptions index for 2016 (Transparency International, 2016). All three have relatively transparent judicial and political institutions that promote international globalization. In Germany and Japan have taken pains to build multinational businesses and see strong global trade have made decisions and policies to make their nations more amenable to that end. All three countries benefit greatly from globalization and have policies that promote fair governance, competitive markets, clear property rights, and fights against corruption according to Transparency International. Amazon is primarily a producer of services as well as goods. Initially the company was a digital bookstore evolving over time into a full-scale retailer, among other things, situated between the supplier and customer selling a large variety of goods. Amazon eventually began to sell a number of low end products under their own private labels and developed products of their own such as the Amazon Kindle, Echo, and Alexis (Amazon: E- Commerce Success Story, 2017) (NPR.com, 2013). Amazon sells these goods domestically and also exports them to secondary markets off of their main markets. Amazon’s web services cannot be overlooked however. The data management, storage, and cloud computing that Amazon does is a surprisingly lucrative service that the organization allows use of domestically and internationally.    While Amazon vendors are expected to pay the applicable taxes for the destination countries. There are no barriers imposed specifically on the company’s international operations (Amazon, 2017). Because Amazon operates from its global marketplaces it avoids the issues that can arise from having to ship everything to the US. When products are bought across national boundaries there are still the applicable fees and duties that need to be paid but depending on the marketplace international shipping could be barrier free or there might be a suitable alternative from a domestic market..Due to Amazon operating out of multiple countries and with 11 global marketplaces it operates in several major trade blocs, such as NAFTA and the European Union. Japan is not formally in any major trade blocs with the unraveling of the Trans-Pacific Partnership. Due to this international presence, Amazon retailers and customers do not have to pay the tariffs or barriers that some trade blocs have erected by being located inside of these trade blocs (Global Edge, 2017). Due to the online nature of Amazon’s business and the founder’s ambition for Amazon to be the number one store in the world, I believe Amazon would function better under a system of multilateral trade liberalization (Byers, 2007, 47). With that being said it is important to have cultural knowledge about nations and markets before working within their borders. Negotiations or transactions can easily fall apart when done without  a deft hand. When conducting business in a foreign country, it would pay to know basic information about the business culture, mannerisms and etiquette, customs, and the society as a whole. Information about this can be found at the official visitor sites for these countries and professional resource sites like Commisceo Global.Global Business Environment Amazon.com Inc. has 11 Global Marketplaces, 108 Fulfillment Centers, and Customers in 108 countries. It’s Marketplaces are based in The U.S., Canada, Mexico, The U.K., Italy, Spain, Germany, France, India, China, and Japan. The company has an operational presence in these countries and several others due to their fulfillment centers and business offices. (Amazon). Many of these countries have different business cultures than that of the United States where Amazon is based. As such, US managers will have to be adaptable when working with their counterparts. For example, Spain has a different relationship with time as the U.S. and China, India, and Japan rate lower than the U.S. in Individualism and value Collective approaches much more. In general, it would behoove a U.S. Manager not to use any expressions of speech or colloquialism for fear of being misconstrued (Geert-Hofstede).With Amazon’s rapid international growth, it has necessitated that the company have operations in some countries that are more risky politically and economically. Due to to the political risks posed by the Chinese Government I would pose that operating in China poses a risk to the company. As well, Amazon has a book only industry in Brazil due to the high level of risk in the country (Chang, 2012) (Brazil: Risk Assessment). Despite the risk of operating in potentially politically and economically risky countries after review of the OPIC portfolio and the 2015 Annual Year Report Amazon has not received any insurance from OPIC (OPIC).Amazon operates in more Civil Law countries than Common law however the majority of the company’s business comes from the North American Market. The US and Canada are majority Common Law countries. Internationally most of Amazon’s business is from Germany and Japan, two Civil Law countries. (Miglani, 2017) Due to the legal structure of Civil Law Countries, with all of their laws codified, it is easier for commercial agreements to be drafted and for disputes to be resolved (Common Law vs. Civil Law). With all of these differing legal codes, Amazon has patents spanning the many industries it has and plans to make forays into. These patients range from e-commerce, Internet of Things Technology, Blimps that can dispatch drones, and automated by request clothing factories. As of August 2017 Amazon has been awarded 1,142 patents this year (Hao, 2017). One of Amazon’s most early and more influential patents expires in 2017, the ‘1-Click Buy’ patient. Amazon has adapted for this upcoming loss, which some have valued to the tune of $2.4 billion, by building strong brand loyalty so that when other retailers can copy the transactional ease Amazon has had patented since 1999 it will not cause a mass exodus. In addition, Amazon has made strides in other directions that will allow it to become even more profitable (Morris, 2017. One of Amazon’s more recent Internet of Things style hardware is the ‘Dash’ button, a physical ‘1-Click Buy’ device. With Amazon operating in so many countries the risk of financial scandals and crimes are present and sometimes ingrained in the cultures of these operations as an example let us look at Japan on the relative upper end of the Corruption Perception Index and Mexico on the lower end. Japan has a Corruption Perception Index of 72, ranking it number 20 out of 176 and Mexico has 30, ranking it 123 of 176. Toshiba, a Japanese conglomerate, has been overstating its earning between 2008 and 2015 by almost $2 billion. An outside investigation unearthed that the culture did not permit for management to be questioned and that there was pressure on employees to practice shifty accounting. These practices are not uncommon in the nation. There is a high value placed on reaching goals by any means necessary and conformity. (Miglani, 2017) . On the other hand we have Mexico. Walmart de Mexico, the Mexican branch of Walmart, has reportedly paid out $24 million in bribes to Mexican officials to be granted permission to open locations drastically quicker than would otherwise be allowed. Unfortunately bribery is not uncommon and is a risk for businesses operating in Mexico. (Blodget, 2012)Global Business Strategy and Organization Amazon’s main mode of entry is through acquisition of major local competitors when possible to take advantage of pre-existing infrastructure. Amazon then operates and manages distribution centers and partners with applicable local businesses. I believe this to be the right approach because it avoids the complications of buying and shipping from the US and avoids cultural barriers. (Dung Le & Rothlauf, 2008) Amazon’s exit strategies include an initial public offering, liquidation and or selling and ceasing operations. In France where Amazon faced severe pushback, they reduced staff and outsourced some administrative functions to the US and UK offices. In regards to the footprint of the company, Amazon on the whole is not the best corporate citizen, however the company is seeking to change this perception. They have not released a CSR report to date but the company has been launching initiatives and hiring sustainability experts to help repair their reputation. (Gunther, 2016) Amazon’s vision statement is “Our vision is to be earth’s most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online”. The company’s Mission statement is, “We strive to offer our customers the lowest possible prices, the best available selection, and the utmost convenience” (Gregory, 2017). Amazon is one of the top 5 brands internationally and top 5 retailers. It is working steadily towards its goal vision statement. One of the reasons it can continue to climb is because of the large amount of customer trust of its convenience and efficiency (Daneshkhu, 2017). Although the company has a strong focus on customer happiness it overall has a strong stakeholder orientation. Amazon also is one of the better examples of a stateless corporation. It’s headquarters is in Washington state where it was founded, it has business offices and call centers in the nations that their global marketplaces operate out of, and fulfillment centers dispersed around the globe. Currently, Amazon uses a Functional Organizational Structure (Meyer, 2017) and I do not believe that Amazon would benefit from any structure more than its current structure. With Amazon fully involved in so many different endeavors in addition to the primary e-commerce activity a functional structure keeps business running smoothly.Managing Global BusinessAmazon very hostile to any form of organized labor. There are no Amazon employees under labor unions (Wingfield, 2016). Does however use expatriates and foreign born workers. Amazon uses expatriates in its higher level positions overseas as they do foreign born workers in the United States. With this they of course provide training and support for their employees and their families before and during their time overseas (myvisajobs.com). They use tools for knowledge management, program assessments and alignments, cultural resources, and resources for the transplanted employees and their families. It is worth stating that amazon prefers to acquire regional competitors to reduce the need to start staffing from the ground up when possible however. As a web based company they fully embrace the advantages of online employee training and development, recruitment, and skill building. Due to the nature of the internet it can be applied to the companies operations across the globe and be easily taken everywhere (Stockport, 2010). Amazon has its own ‘in-store’ brand, Amazonbasics, that is sold in many of it’s markets but over all the sellers vary by region. Because Amazon knows what is selling well on their marketplaces and what people are searching for they can produce their own version for a considerable discount (Whitman, 2016). In Canada amazon.ca has offers a smaller selection of items from the american amazon.com site and many canadians use both. Japan’s Amazon.co.jp offers many consumer electronics and other technological items matching the advance nature of the nation. Germany’s amazon.de has garments, footwear, home goods, and as well as some toys and technology (Crossbordershopping.ca)(Amazon.co.jp)(Amazon.de). Amazon heavily uses online methods for promotion. In 2013 Amazon reportedly spent over 157 million dollars on Google search ads alone (Smith, 2014). Sponsored Searches, portal advertising, and occasional email campaigns are used depending on the country. They often use free shipping, one day delivery, and Amazon prime domestically and overseas. Amazon uses indirect and direct distribution channels depending on what will best serve the customer. They used direct selling,independent representatives, mail orders, big box sellers, retailers, and combinations of others. Amazon practices global procurement. Not only with the product they produce but by working with sellers across nations. For example, Amazon.de serves nations all over central europe. Amazon’s in house products such as Alexa, Kindle, and their Amazonbasics line use components from all over the globe. This is in addition to the many companies that sell their wares across nations using their infrastructure. The company is so large that it both outsources its goods and services and insourced them depending on the the field and what is the most efficient path forward. Amazon has created its own supply chains and taken over those of competitors when moving into major markets. When in these markets the ratio of the market’s currency compared to the dollar impacts Amazon’s profit. Depending on the market, Amazon exports goods using their global marketplaces. The economic stability of the markets home countries of course factors into the buying power versus the dollar. When the dollar is up relative to local currencies it is beneficial and vice-versa.

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