Technological innovation and its impact on an Amazon

1

TABLE OF CONTENTS

ABSTRACT....................................................................................................................6

CHAPTER 1: INTRODUCTION.................................................................................7

1.1. Background.........................................................................................................7

1.2. Amazon.com Overview......................................................................................8

1.3. Research Purpose..............................................................................................10

CHAPTER 2: RESEARCH DESIGN ........................................................................12

2.1. Research objectives ..........................................................................................12

2.2. Research questions ...........................................................................................12

2.3 Research methodology .....................................................................................13

2.4 Expected contributions of the research.................................................................13

CHAPTER 3: LITERATURE REVIEW...................................................................15

3.1. Concepts and related studies ............................................................................15

3.1.1. Concepts of technological innovation .......................................................15

3.1.2. Technological innovation and Business structure .....................................17

3.1.3. Technological innovation and Business performance ...............................18

3.2. Previous studies on case of Amazon ................................................................19

3.3. Conceptual framework and hypotheses............................................................22

CHAPTER 4: DATA ANALYSIS...........................................................................24

4.1. Amazon‘s Competitive Profile Matrix Analysis..............................................24

4.1.1. eBay introduction.......................................................................................25

4.1.2. Barnes & Noble Introduction.....................................................................26

4.1.3. The comparison between Amazon, eBay and Barnes & Noble ................26

4.1.4. Competitive profile matrix of Amazon, eBay, and Barnes & Noble ........31

2

4.2. Impact of technological innovation and value chain analysis of Amazon.com

33

4.3. Technological innovation and Amazon‘s Business structure...........................38

4.3.1. Monetization activities, total assets, and shareholders‘ equity..................38

4.3.1.1. The monetization activities.................................................................38

4.3.1.2. Technological innovation impacts on total assets and shareholders‘s

equity and total assets ..........................................................................................41

4.4. The impact of technological innovation on Business performance .................48

4.4.1. Labour productivity ...................................................................................48

4.4.2. Products – Services development ..............................................................49

4.4.3. Market development ..................................................................................50

4.4.4. The analysis of business performance result .............................................51

4.4.4.1. Business performance result review before 2014 ...............................51

4.4.4.2. Business performance result review between 2014 and 2019 ............52

4.4.4.3. The special period of Amazons‘ business performance result in 2020

55

4.4.4.3.1. Covid – 19 pandemic overview........................................................55

4.4.4.3.2. Technological innovation and commercial triumph during Covid–19

pandemic 56

CHAPTER 5: CONCLUSION, IMPLICATIONS AND LESSONS.......................58

5.1. Conclusion ........................................................................................................58

5.2. Implications and Lessons..................................................................................59

5.2.1. For Amazon ...............................................................................................59

5.2.2. For other SMEs..........................................................................................62

5.3. Limitation and future research..........................................................................64

3

5.3.1. Limitation...................................................................................................64

5.3.2. Future research...........................................................................................64

REFERENCES.............................................................................................................65

APPENDIX ...................................................................................................................71

4

FIGURES

Figure 1: Amazon.com Business structure ....................................................................21

Figure 2:The conceptual Framework of the thesis.........................................................23

Figure 3: Amazon.com value chain analysis in technology stream...............................34

Figure 4: Amazon.com Value chain...............................................................................36

Figure 5: The main activities generate revenue for Amazon.com. ................................40

Figure 6: The bar chart of Amazon‘s Shareholders's Equity ........................................41

Figure 7: Technology and content..................................................................................43

Figure 8: The investment of Amazon's field..................................................................45

Figure 8: The Total Assets of Amazon.com ..................................................................46

Figure 9: Emloyees in Amazon......................................................................................47

Figure 10: R&D Expenses and Inventory ......................................................................50

Figure 11: Revenue, Cost of goof sold, EBIT................................................................53

TABLES

Table 1: The comparison between Amazon, eBay and Barnes & Nobles........................ 26

Table 2: CPM of Amazon.com, eBay, and Barnes & Noble ............................................ 32

Table 3: Revenue generating activities in Amazon .......................................................... 39

Table 4: The investment of Shareholder‘s Equity ............................................................ 42

Table 5: Information about Amazon's Executive Officer................................................. 48

Table 6: Financials ratios of Amazon ............................................................................... 54

Table 7: AWS market share .............................................................................................. 57

Table 8: The table of Amazon Income Statement (2014-2019) ....................................... 71

Table 9: The table of Amazon Balance Sheet (2014-2020).............................................. 72

Table 10: Amazon Financial Ratio 2014-2020 ................................................................. 73

Table 11: CashFlow Statement of Amazon 2014-2019.................................................... 74

5

ABBREVIATION

AWS: Amazon Web Service

CEO: Chief Executive Officer

CFO: Chief Financial Officer

SPV: Senior Vice President

B2B: Business to business

B2C: Business to customer

CPM: Competitive Profile Matrix

KDP: Kindle Direct Publishing

IT: Information Technology

SMEs: Small and Medium Enterprises

EBIT: Earnings before interest and taxes

EPS: Earning per share

ROA: Return on Assets

ROI: Return on Investment

ROE: Return on Equity

EBITDA: Earnings before interest, taxes, depreciation, and amortization

MWPVL International: A global supply chain and logistics consulting services

6

ABSTRACT

Amazon.com Corporation - one of the largest and most tremendous successful web￾based shopping worldwide. Amazon.com is the most famous for modern innovation in

all academic fields they have typically involved. In the world, technology innovation

has been applied and developed in many fields like security, military, medicine,

entertainment, commerce, and post... and brings many great benefits. High

technologies are the right procedure in the commerce field both now and in the future.

Therefore, the importance of the research is to highlight the benefits, advantages, and

the strength that technology innovation brings about in the Amazon.com fulfillment

centers, contributions, and warehouses, in such the way that alters the enterprise in the

long term by improving the value chain. Furthermore, this study shows that continuous

technological innovation creates impact on business structure and business

performance of Amazon.com Corporation.

7

CHAPTER 1: INTRODUCTION

1.1. Background

Technology has stopped being strange and advantaged all through the modern world,

and its efficient utilization has instantly become an essential component in the business

field. In a particularly dynamic and globalized world, if a business does not innovate or

improve manufacturing processes of such enterprises by technological innovation so

that becoming technologically out of date can mean preventing it penetrate the market.

Some other previous research has focused on development as the vital of corporate

development and technology innovation is the most widely recognized methodology to

expand the development of the corporation (Hervas-Oliver, J.L.; Sempere-Ripoll, F.;

Boronat-Moll, C.; Rojas-Alvarado, R., 2018). That is the reason companies should

bargain each day with technological advances and adjust to them, in order to accelerate

their processes and maintain competitiveness in the market. In a turbulent market,

those firms which have high technological capabilities become leaders of the market

and gain high profitability (Chae, H.C.; Koh, C.E.; Park, K.O. , 2018). The

fundamental companies are attempting to create and implement their own technical

advances in order to overcome their rivals. These innovations give various services that

assist organizations with building up more straightforward associations with their

clients and providers, incomes, improve processes, make modern procedures for the

new strategy of the organization. Technological innovation is regarded as an important

driver factor that significantly contributes to business performance (Hervas-Oliver,

J.L.; Sempere-Ripoll, F.; Boronat-Moll, C.; Rojas-Alvarado, R., 2018). The importance

of a firm‘s technological innovation capability, which can be beneficial to the company

and leads to improved competitiveness, has been confirmed by many studies (Zhang,

Y.; Khan, U.; Lee, S.; Salik, M. , 2019). It was proven that Industry4.0 is key to the

improvement of sustainable business performance for SMEs.