AMAZON CASE STUDY

Digital Business

Ania Gina Parjan

Student ID: S216724
Submission Date:3/10/2023

[DATE]
BA(HONS)BUSINESS STUDIES WITH FUNDATION YEAR
UNIVERSITY OF SUFFOLK
 Executive summary

Electronic commerce is booming in the information era of the twenty-first century.

But since it began disrupting e-commerce in 2019, COVID-19 has brought this sector both
chances and difficulties.
Both an online store and a web service provider, Amazon. The company sells goods in a
variety of categories, including jewellery, baby products, tools for kids, automotive and
industrial products, apparel, electronics, groceries, books, movies, and music. It also sells
goods in the fields of beauty and wellness.
By 2022, it is anticipated that Amazon will spend $51.5 billion annually on ICT. This money is
mostly used to pay vendors for hardware, networking, and software. Surprisingly, according
to the financial report for the years 2019 to 2021, one of the most successful e-commerce
corporations, Amazon, maintains a comparatively high profit.
 Table of contents

Executive summary............................................................................................................1
Table of contents................................................................................................................2
1. Introduction................................................................................................................3
2. Key trends and advantages.........................................................................................3
2.1. Digital business................................................................................................................3
2.2. Digital Business Advantages.............................................................................................6
2.3. Key trends in digital business...........................................................................................6
3. Digital Business Models..............................................................................................8
3.1. Emerging Digital Business Models....................................................................................8
3.2. Digital Business Ethics and Cybersecurity.......................................................................10
3.3. Digital Business Models, Ethics and Cybersecurity with Amazon...................................12
4. Collaborative Relationships and Strategic Alliances..................................................13
4.1. Collaboration relationship.............................................................................................13
4.2. Strategic Alliances..........................................................................................................13
5. Conclusion................................................................................................................14
6. References................................................................................................................15
 1. Introduction

Digital business is the process that enables businesses to employ ever-more-efficient

technologies with fresh values. Technology advancements assist businesses in offering
distinctive goods to their clientele.
Amazon.com Inc. (Amazon) has focused on using robotics, drones, artificial intelligence, and
the cloud to change its operations digitally.
In addition, they provide support services for allied industries, such as home shipment and
delivery, website hosting, and other web-related services. Amazon advertises these
products through its own online and offline distribution channels. The current paper will
first go over some important contemporary issues, including the benefits of digital
technology and how that affects managing virtual businesses. The second section will cover
new and developing digital business models about such business-related issues as ethics and
cyber security. The report will also evaluate the effects of the new collaborative connection
and its strategic alliances through digital technology in the last section.

2. Key trends and advantages

2.1. Digital business.

What is digital business?

To develop new or improved business processes, goods or services, digital enterprises use
digital technologies. The use of digital technology in all aspects of a business's operations,
from product creation and production to marketing and sales, can also be referred to as
this. Data-driven operations are a major feature of digital enterprises. That is, they base
their decisions on the information at hand. Customers, employees, sensors, and other
sources are just some of the possible sources of this data.
Because they can test new ideas quickly and affordably using digital tools and that helps to
move quickly, (Bharadwaj, 2013).
For example, before implementing a new feature in the entire user base, they will test it
with a small group of users and may use a website or an application that can be global
because it is very easy for them to connect via the Internet with the client from everyone.
Digital business yesterday, today, and tomorrow.

Components are needed to start a digital business

"Internet of Things."
Through intelligent services and solutions, the Internet of Things (IoT) and the arrival of 5G
will soon have an impact on every part of our lives. The Internet of Things is also referred to
as IoT. It might aid in creating intelligent things. Additionally, the introduction of 5G Internet
will facilitate businesses' speedier target achievement. Combining companies, goods, and
services yields novel insights that boost output, boost efficiency, and revolutionise every
industry. Additionally, it will aid in boosting process productivity, (Al-Debi, 2008).

Artificial Intelligence AI,

Artificial Intelligence (AI) is another term for the technology. A business can use artificial
intelligence to surpass rivals in terms of speed and accuracy, predict client wants, and follow
new trends. It comprehends what is occurring, why it is occurring, and suggests the best
course of action. It can also graphically depict each stage of its processes, allowing it to solve
multi-objective issues even in the most challenging circumstances. In the world of digital
businesses, it is regarded as one of the most effective strategies, (Borges, 2021).

Internet advertising
With the spread of Internet technology, customer expectations as well as the additional
pressure to provide goods and services that are digitally competent are rising. The client
journeys are being transformed because of this technology. To stay current, front, middle,
and back-office IT infrastructures must implement an efficient digital basis. It also promotes
quick innovation that will aid in the introduction of new products and technologies,
(Chaffey, 2019).

New trends and technologies in the field of digital transformation

Technology Description favourable harmful effects

effects

Implantable Pacemakers, smart beneficial for Privacy and data

technologies tattoos, and detecting missing security are at risk
smartphones with children or monitoring
"built-in" components health
have all been
implanted into people.
Wearable Mobile phone Self-reliance and a risk to data security
Internet technologies are improved judgement and privacy, and
made to fit in clothing addiction
and accessories.

Internet of things utilising sensors and a rise in productivity, Security problems,

the right programmes an uptick in quality of loss of traditional
to connect to life, increased food jobs, and concerns
"everything" on the and travel safety, the about piracy
internet emergence of new
industries, and a
closer connection to
the environment
Smart cities Management of Better access to issues with privacy,
energy, material education, a rise in system vulnerability,
flows, logistics, and productivity, higher and cyberattacks
traffic using sensors standards of living, a
and data platforms decline in crime
Big data Large-scale data improved and quicker Job losses, privacy
management, decision-making, cost concerns, doubts
utilisation, and reductions, and new about the reliability of
modification of job categories the data, and
automated decision- uncertainty over who
making processes owns the data

Driverless cars Built-in programmes better mobility for the Reduced revenue for
are used to start and elderly and crippled, public transit, job
control vehicles. enhanced safety, and losses, and
reduced cyberattacks
environmental effect
Robotics Robotics design, replacement for the Loss of employment,
development, use, labour of others liability, and
and application responsibility

Blockchain a system of explosion of tradable Belief in people,

distributed trust assets, improved concern for
created to record transparency, and the preserving financial
transactions disintermediation of realities
financial institutions
 2.2. Digital Business Advantages.

1. Online existence

The most obvious benefit for some businesses is their online presence in blogs, corporate
pages, online stores, and social networks because it increases their exposure and sales
channels, (Wang, 2016).

2. Enhances Productivity

Automation eliminates the need for manual labour, allowing for faster processing with
fewer errors. This automation has a significant impact because IBM has shown that robots
can complete tasks 20 times faster than people while committing fewer errors. Business
intelligence technologies and data analysis tools can gather data more quickly than before,
allowing for quicker decision-making than would otherwise be possible, (Luo, 2021).

3. Reduction in operating expenses

Manual processes take more time and effort to complete than automatic ones, cost more
money, and have a higher risk of error. Process inefficiency can cost businesses up to 25% of
their revenue, according to research. Saving money and time are every company's primary
objectives. Up to 90% of operational costs can be saved by businesses through digitization,
(Schwertner, 2017).

4. New ways to reach out to customers.

Email, apps, and social networks are modern methods for client communication that are as
accessible as online sales channels. Customers' preferred channels of communication are
made available to the business, ensuring a rise in customer loyalty and revenue, (Jelassi,
2005).

2.3. Key trends in digital business.

Digital transformation (DX) spending is anticipated to total 1.6 trillion dollars by 2022. Global
spending on digital transformation is anticipated to reach 3.4 trillion dollars by 2026.

source: statista.com

1- Wider use of low-code platforms

Low-code offers drag-and-drop tools that let non-technical users and business analysts
construct and design unique solutions devoid of coding and graphical user interface. The
adoption of low-code platforms has increased recently, giving rise to new use cases
including new product development and rapid prototyping because of the advantages they
provide in terms of cost, scalability, time, and risk reduction, (ALSAADI, 2021).

2- Increasing migration to the cloud

When it comes to improving accessibility, reducing expenses, and outsourcing tedious
routine maintenance, companies are increasingly relying on cloud technologies.
As technology develops and internet speeds increase and to take advantage of all the
unique advantages it offers more companies will move to the cloud, especially in countries
where they have historically been slow, (Frank, 2023).
A difficult challenge is the consolidation of their Security model and that must be overcome
for cloud technologies to be adopted by companies that handle sensitive data.

The most lucrative business division of Amazon, Amazon AWS (cloud), generated over $80
billion in revenue and about $23 billion in operating profit in 2022. against $62 billion in
revenue and $18.5 billion in net profits in 2021.

3- AI and ML machine learning

AI and ML are the most talked about technologies among all digital transformation topics.
AI provides information about what customers want, their demographics and behaviour,
helping organizations make better decisions.
it is important because it can help organizations make better decisions by providing insights
into customer behaviour, demographics and what they want.
ML creates personalized experiences for their customers and helps companies use data.
ML is important because it can help companies use data to create personalized experiences
for their customers, (Woschank, 2020).
These two technologies are incorporated by companies into software programs to help
senior management make wise judgments and free staff members from tedious tasks.

4- Intelligent search
Intelligent Search utilises AI technology and dismantles organisational data silos to give
users more relevant and personalised search results. This makes it possible to extract
insights from any data source.
A single point of access to enterprise content sources is provided by search intelligence,
which enables the enhancement, search, and analysis of data in both structured and
unstructured formats and can produce smarter outcomes more quickly, (Blanken, 2003).

Employees look for and gather information for an average of 1.8 hours each day or 9.3 hours
per week.
Source: McKinsey

5- Automation
Automation is one of the key components when considering digital transformation ideas.
Business process automation solutions assist organisations in removing the need for
humans to carry out internal operations and in accelerating their completion.
These technologies have the potential to provide the experience needed to start any project
in the medium and near term by boosting productivity and digitising operations.
The greatest method to speed up automation is to choose business process automation
technologies that enable you to get results more quickly and with less coding knowledge.
More than 80% of business executives claim to be hastening the automation of work
processes and the expansion of remote work.

3. Digital Business Models

3.1. Emerging Digital Business Models

Subscription
The client pays the seller a certain sum regularly, such as monthly, through a mobile phone
contract or the local newspaper. This phrase has been widely used since the 18th century.
The buyer of the good or service regularly (monthly, for example) pays the supplier a fixed
sum. Numerous innovative subscription-based digital business models have evolved in
recent years, completely altering entire industries.
At once, Amazon is present in the music, movie, audiobook, and e-book categories. The
availability of subscription-based software solutions is increasing. These comprise the
Creative Cloud from Adobe, CRM platforms like Salesforce, and commerce platforms like
Shopify, (Yu, 2021).

AmazonPrime
Customers can subscribe to Amazon Prime on a monthly or annual basis, which grants them
access to services like Prime Music and Prime Video as well as several perks including free
shipping every week and exclusive deals. Customer loyalty rises thanks to the steady stream
of cash from Prime subscriptions. It makes up the majority of Amazon's business model.

On-demand
Ordering and receiving a product or service in real-time is now possible with the help of an
Uber, rent a scooter, food is delivered to your home and music is bought from Amazon and
Netflix. The content offered must be completely digital and work on order until delivery to
get the on-demand advantage.

A peer-to-peer relationship
In a peer-to-peer business concept, a separate business establishes a market area where
private individuals can conduct business with one another.
example: selling second-hand goods on eBay Travellers can rent private rooms through
Airbnb, and Etsy sells handcrafted goods.
Sales commissions are collected to produce platform income. They instead offer
infrastructure and market promotion. Peer-to-peer marketplaces may further offer services
like fiduciary relationships or insurance coverage.

E-commerce/marketplace
The online sale of commodities is known as e-commerce, and the majority of e-commerce
stores double as marketplaces. Amazon is both a platform for products that Amazon sells
directly and a marketplace where other commercial merchants can offer their goods. It is a
consistent platform for the end user and articles are not classified by supplier.
Even though the products are frequently supplied by independent sellers and not by
Amazon itself, it appears that the company can provide "everything."
A marketplace is also the Apple AppStore. The majority of apps are not created by Apple.
Instead, they are created by independent companies that advertise on the App Store.
As with peer-to-peer providers, marketplace providers make money here by receiving a
commission from sales, (Dewi, 2022).
 3.2. Digital Business Ethics and Cybersecurity

Ethics in Cybersecurity

Approaches to ethics in cyber security are laid out in two categories:

The first category applies moral theories such as utilitarianism, consequentialism,

deontology and virtue ethics. This approach can lead to contradictory results, depending on
the moral or ethical theory applied, this approach can lead to contradictory results, say the
authors, (Christen, 2020).
The objective of the second category is "to develop a set of middle-level ethical principles
for cyber security contexts".

Based on the shortcomings of existing approaches, the authors develop a new framework,
depicted in Fig. 1. The ethical principles depicted in Fig. 1 will be utilized when discussing the
ethical issues relating to digital service chains identified in this work.

figure 1
adopted from Formosa et al. [28]

Five Cybersecurity Ethics Principles

The following are the five guiding principles of cybersecurity ethics:

When designing and implementing new technology, services, and products for digital service
chains, it is important to act without malice towards users or to make their lives more
difficult.

Benefit: Should improve users overall, as well as the technologies, services, and products
created and implemented through digital service chains, (Sadeghi, 2022).
Users, technology, services, and goods created and used in digital service chains should all
maintain their autonomy. Users are thus able to decide with knowledge how these services
and goods will affect their lives and how they will use them.

Justice: Digital service chains should not use technologies, services, or products that are
discriminatory or weaken user solidarity. Equity and equality should be emphasised instead.

Explainability: Transparency is required in the technologies, services, and products

developed and used in digital service chains. Users need to be able to comprehend them
and understand who is accountable for them.

3.3. Digital Business Models, Ethics and Cybersecurity with

Amazon.

Amazon's cybersecurity needs must be satisfied by four key criteria: confidentiality,

integrity, authentication, and non-repudiation.

Despite taking these security precautions, a business may still expose information while it is
in transit to cyberattacks like DoDs or phishing. Due to these weaknesses, more advanced
secure authorisation, and security procedures, including PKI and digital signatures, are
required (Erin et al., 2020). Amazon's cyber security requires information integrity
assurance, the use of digital signatures, and triggered verification and authentication.

Such a system makes use of multiple key logs to encrypt communications before they are
sent and to decode the resulting data. Given that two parties can verify each other's
identities and reduce the likelihood of fraud in the transaction, Access Key is a secure
architecture for online transactions.

Amazon’s Needs for Cybersecurity

There has been huge data transfer, information exchange, and trade levels with the internet
development. A wide array of commerce is performed using e-commerce, consisting of
online funds payments, supply chain management, online marketing, and online order
processing. Therefore, billions of dollars are transferred and exchanged via online platforms
with complementary transaction details. Cybersecurity is the safeguarding of computer
systems, servers, mobile phones, electronic systems, networks, and information from
harmful attacks (Erin et al., 2020). It is likewise called InfoTech security or data security.
Cybersecurity can be categorized into typical classifications such as network security, details
security, application security, functional safety, end-user training, and recovery systems
(Apau & Koranteng, 2019). This huge boost in e-commerce has caused a new generation of
security risks that require business investments to overcome.
 4. Collaborative Relationships and Strategic Alliances

4.1. Collaboration relationship.

Strategic alliances and cooperation:

Despite these distinctions, the terms "collaboration" and "strategic alliance" are frequently
used interchangeably when referring to activities that include working with another person
or group to accomplish a shared objective.
To accomplish a common purpose, two or more people or businesses must collaborate,
frequently through unofficial relationships or partnerships.
To accomplish a similar objective, two or more organisations typically enter more formal
and structured strategic alliances. Some of our members have joined forces to publish
books, and seminars, and start their organisations focused on industries.
Small businesses can get several advantages through cooperation and strategic
collaborations, including:

Small businesses can get several advantages through cooperation and strategic
collaborations, including:

Access to new markets: By using collective buying power, this service gives small businesses
access to fresh markets and customer groups that can help them reach new audiences and
increase their clientele.
Shared resources and expertise: By working together or forming an alliance, small
enterprises can make use of one another's abilities and assets, such as marketing know-how
or technological access, to accomplish a common objective.
Reduced costs and risk: By pooling their resources and knowledge, businesses can lower the
risk involved in breaking into a new market or introducing a new product.
Collaboration and strategic alliances can raise brand exposure and credibility by partnering
with another well-known company, (Austin, 2010).

4.2. Strategic Alliances.

A strategic alliance entails the participation of at least two partner companies that can
contribute consistently in one or more strategic areas, such as technology or products,
maintain their legal independence following the formation of the alliance, and share in the
benefits.

These requirements imply that strategic alliances foster interdependence between

independent economic units, offering new benefits to partners in the form of intangible
assets and requiring them to make ongoing contributions to their partnership. The types of
strategic alliances listed below are also connected to various regulatory frameworks that
provide businesses influence over how partners are compensated and resources are
distributed, (Spieth, 2021).
Different Inter-Organizational Relationships

RELATIONS IN HIERARCHY ASSORTED VENTURES

INVESTMENTS IN EQUITIES COOPERATIVES
R&D Consortium
COOPERATIVE STRATEGIC AGREEMENTS CARTELS
FRANDERSHIP LICENCING
NETWORKS OF SUBCONTRACTORS STANDARDS GROUPS FOR INDUSTRY
AN ACTION DETERMINES MARKET RELATIONS.

Pro
It can boost the company's reputation and brand, especially in new markets, which could
result in customer growth. It can also produce more income and boost profitability.
A company's operational risk may be decreased as a result of the inclusion of special assets.
It might change the source of income for a business.

Versus
It may have a detrimental effect on the company's reputation and brand.
interacting and communicating with larger teams could take more effort.
If alliance members differ on a longer-term strategy, it may result in conflict.
It may have a detrimental effect on the company's reputation and brand.

5. Conclusion

As the Internet expands, e-commerce and its applications are expanding daily.
The Internet and networks are essential to e-commerce, a constantly expanding technology.
This study sheds light on several aspects of e-commerce, including electronic cash transfers,
online purchasing, supply chain management, online transaction processing, electronic data
interchange, and Internet marketing.

For e-commerce to thrive, transaction security is a fundamental and critical issue. Security
concerns are coming to the public's attention as e-commerce expands so quickly.
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