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Question: Discuss about the Operation Management Strategies Implemented. Answer: Introduction In the late 2012, the company reported its first quarterly loss over the period of five years. The company has invested heavily in new distribution centres, launching daily deals on the site and the development of kindle. The founder Jeff Bezos knew that competition is very tough for the company and there are many other players in the market who are performing well enough. In 1994 after seeing the boom in the internet usage of near about 2300% Jeff Bezos left his highly paid job and started an online book store inside his rented house in Suburban Seattle (Teles and Coutinho, 2011). His online book selling company emerged as the worlds largest online retailer who deals in books, fashion, DVDs, apparels, furniture, electronics and health, and beauty. Amazon deals with four types of customers, which includes sellers, enterprises, final consumers and content creators. Amazon has designed its website consumer friendly by offering various options in size, color, brand, and price. The websi te is very easy to use and has been developed keeping in mind to cater the maximum needs of the consumer at one virtual portal. The Companys mission statement is Earths most customer centric company (Teles and Coutinho, 2011) Amazons Operations strategies Goods and services design- organizational output design is covered in this strategic decision area of operational management. This is done primarily with the help of technologies. For example, the company ensures that its online retail services are in line with the requirements of target customers using the advanced communication and information technologies. It also supports the maximum operation of e-commerce (Teles and Coutinho, 2011). Quality management- the objective of this decision is to maximize the operational output in order to fulfill the customer satisfaction. For example, amazon always motivates its employees to solve the problems and improve the business by creating new ideas (Teles and Coutinho, 2011). Location strategy- the accessibility of market and resources is considered in this strategic decision like their warehouses should be nearest to the location where the maximum customer base is available. Process and capacity design- the objective of this decision is to optimize the capacity and production process. Extensive automation is applied to streamline the business process. For example, the companys main output is to receive the orders so it has automated the technologies to receive as many orders as possible. This approach highlights the importance of automation and other related technologies to enhance the capacity and process (Cassidy and Scott, 2002). Strategy and layout design- this decision area deals with the movement of information, material, and human resource. This objective is fulfilled with the help of efficient layout designs which is aligned with computer assisted programs. For example, in the warehouses, all the items are assigned as per the computerization policies. The layout is made for maximizing the shelf space and minimizing the aisles for achieving the optimal capacity and this is done without reducing the process efficiency. Supply chain management- this strategic decision is concerned with the streamline of supply chain management. Company does this through automating and enabling the buyers and suppliers to access some of its IT assets for example sellers streamline their supply with help of demand data available on the companys online retail website, and buyers can track the order placed and can do all the communication with sellers through the data available on the website. Job design and human resource- HRD is the main focus of this strategic decision area. Companys operation management uses a combination of third party employment agencies and in house employees. For example, workers from all these agencies fill the temporary positions of the company and are also evaluated if they are fir for the permanent position or not? Especially in their warehouses and fulfillment centers. Companys recruitment process is based on the organizational growth. Scheduling- operation managers keep in mind the short term and intermediate schedules to ensure that all the resources satisfy market needs. In this strategic decision area company is fully reliable on suppliers to run its online retail business. For instance, suppliers need to access the companys website in order to determine the demand level and streamline their delivery and shipping schedules accordingly. Inventory management- .under this decision company has to ensure the sufficient storage of inventory to meet the demand, this is done with the help of using just in time technique for example in most of the cases as the inventory comes in the warehouse it immegiatelybgets delivered to the customer to fulfill the order(Emblemsvg, 2006). Moreover, to ensure the optimal inventory holding and order, employees in the warehouse are trained to maximize the speed so that orders can be fulfilled. By this way, company minimizes its cost by satisfying the maximum customers need. Maintenance- it emphasizes on the stability and reliability of the business processes. Workers are trained regularly in order to maintain HR capacity for satisfying the companys need for its e-commerce business. Moreover, companies always search for advanced options for the improvisation of its operational efficiencies (Emblemsvg, 2006). The do-buy decision strategy It is the departure point for creating operations strategy.it helps managers to decide what should be done by organization and what should be done by suppliers (Cassidy and Scott, 2002). Amazon has clearly defined the objectives for its managers that what startegies must be adopted by them in order to increase the sales of the company and suppliers are also aware of the terms and conditions on which they need to work. The company decided to outsource its products through various suppliers in order to cater the maximum market with minimum cost. Amazon has placed itself as a giant in the world of technology by providing the convenience at customers doorstep (Shelar, 2016). Since inception amazon has acquired many strategic gains in research and technology and claims to be worlds most customer centric company by implementing many innovative ideas such as one click order convenience to customers, improvising on customer reviews etc v.it has also acquired new customer base by forging an international relationship with the help of viral marketing. Ways in which amazon excels relationship building. When it comes to big companies most of them fail to acquire customer relationship, but this is not the case with amazon. The company not only builds customer relationship but also provide them with the personalized services by offering them the products basis their past purchasing history (Shelar, 2016). Below are the strategies which make the company standalone amongst its competitors: Data-driven relationship marketing- amazon leverages the idea of web research and big data to all their customer facing interactions. Whenever a customer calls a customer representative they not only great you with your name but they have all the required information available to them in order to make you feel comfortable and confident. The same can be seen in their extremely personalized emails in which they not only refer to you with your name but also gives you the required information without wasting much of your time (Shelar, 2016). The maximum a customer visits their sites and search for products the more personalized emails you get from them. Convenience and experience- customers now days prefer to shop online because of the convenience they get. Amazon provides them with the technologies ease with which they can look for what they want without taking much time and also make them confident by their replacement or return protocols. Operation managers keep in mind the short term and intermediate schedules to ensure that all the resources satisfy market needs. In this strategic decision area company is fully reliable on suppliers to run its online retail business (Shelar, 2016). For instance, suppliers need to access The___14 Companys website in order to determine the demand level and streamline their delivery and shipping schedules accordingly. Customers shopping is made more hassle free by Doing quick purchases with the help of one click. Amazons dash buttons- it is a hardware which can be bought at home and all the purchases can be done just by one click. Amazon prime in which customers can get their orders in a day and if the location is nearby then maybe the same day. Making e- commerce an experience to share- although it has been observed that shopping is a social experience this is not in the case of e-commerce here customers make their purchases alone. But amazon relationship marketing team has built up an option in which whenever a customer makes any purchase then they are being asked to share their experience on social networking sites (Shen, Benyounes and Gerbaud, 2015). This not only works as a tool for advertising but also helps in the improvisation of the product. Cost strategy Amazon is having overall cost leadership among all of its competitors by providing Lowest possible prices Launching amazon prime in which customers can save shipping cost Customers can avoid state tax. Providing various free shipping offers. Dealing with small companies and resellers. Deficit selling of kindle. Price check app launched by amazon (Shen, Benyounes and Gerbaud, 2015). As per many research, it has been observed that amazon changed prices of about 80 million products in a single day because they wanted to provide their customers with the best possible prices in the market (Cie?la, 2015). For example in the mid of year 2012 HP 8600 printer was launched other sites were offering a price of 160$ wherein amazon sold it for 120$ as the market opened many sellers raised prices up to 180$ but amazon raised it only to 130$ and at the end of the day amazon was the cheap priced seller in the market and its sales figures raised drastically (Cie?la, 2015). Supply chain management by Amazon From the beginning of its establishment amazon has focused on its logistics of distribution as a center to the online retail growth. Initially, the company uses to hand deliver its products but now everything is being managed by the supply chain managers and they are now managing around 400 orders per second during peak times and bringing their revenue to around 90bn$ a year (Cie?la, 2015).. All this is done by working at various levels: Pre structural level- amazon is one of the giant of selling books and other stuff online Unit structural level- their supply chain management has an edge over many other competitors because of the shopping experience they offer to their customers. It has a strong network of the supply chain (Cie?la, 2015). Multi structural level- amazon is the first company to launch the rating system under which customers have the options to rate its shopping experience and company can work accordingly. Amazon ships its products on its own (Cie?la, 2015).. Relational level- amazon has such a vast network of the supply chain that its competitors uses companys website to improvise their business. As the company is growing it gradually increasing its ware houses and other networks to meet the demand of the customers they are focusing on setting up the warehouses near the target customer areas so that the response time is decreased (Cie?la, 2015). Company targets to deliver their maximum items the same day they are ordered so that their competitors do not peel off their customers. This strategic decision is concerned with the streamline of supply chain management. Company does this through automating and enabling the buyers and suppliers to access some of its IT assets for example sellers streamline their supply with help of demand data available on the companys online retail website, and buyers can track the order placed and can do all the communication with sellers through the data available on the website (Cie?la, 2015). Supply chain drivers Facilities- Order fulfillment and warehousing for third party sellers. 49 fulfillment centers all over world Transportation Own logistic network Relying on national parcel couriers like fedX, ups. Smart innovation strategy The main reason behind the success story of amazon so far is their innovation strategy, the company started with the selling of DVD and CD along with the books. In the same year company introduced auction scheme this strategy provided a better experience for the customer and protected them from the frauds done by bidders though this innovation does not bring any profit to the customer by doing this, they came into customers knowledge (Tadelis, 2002). Amazon adopted B2C model but later it again changed its strategy and shifted from direct business sales model to service and sales model, with this model companys target group changed to customers and another business group.it offers many small business groups to use companys web services and platforms to offer various products to the customers, but amazon was charging some percentage of commission from every sale (Tadelis, 2002). With this service, amazon created an eco-system in the market and launched amazon associate program under wh ich it developed a partnership with customers and business associates. The primary goal of this program was to increase the customer base. Gradually with the addition to more and more products in the portfolio, the customer increased and it again changed its business model (Ritter and Andersen, 2014).There was a time when companys stock price were on high and this is not any flake, company has actually performed well during this time by mixing their innovation strategies. The company has worked on its core objectives. Institutional advantage- companies are well aware of what they need to do and what they are doing, service and product features with weaknesses and strength is well understood, what customers want and how it will be provided is also understood (Ritter and Andersen, 2014) Personal advantage- expertising in the current position is what every organization dream of. How you deal with the current scenario by taking new initiatives is how you are judged in todays world (Ritter and Andersen, 2014). Moving out of this familiarity is not easy and this is where the growth of the company is found.so it needs a lot of efforts moving outside of the world exploring new opportunities and work accordingly by taking new initiatives (Chua, 2011). Many organizations are not willing to do such things and this is where they are lacking behind. Amazon innovations by type If any company thinks that sustaining innovation doesnt work then amazon is the best example for them. Collaborative filtering option is the one wherein a customers search a product and some suggested products are displayed for example whenever a customer search any product then some other products also comes under tagline people who brought that also brought this (Chua, 2011). At some point in the history, this search engine was alone contributing 35% of revenue growth. Single click checkout- it is the innovation which was brought in by amazon. With a single click, a customer can complete its order and this is the significant improvement in the field of online retail stores (Chua, 2011). Drone delivery- it is a futuristic idea, delivering orders within 30 minutes and do not have face any hassle of traffic if this idea works then the company will for sure be the best among all(Spector, 2006). Prime- it is a way in which customer pay shipping for all orders at once, earlier they had to pay to ship for every single order but with prime company charge for one time and customers are free from paying to ship. It means expansion of new customers vs. new products and services but here the familiarity measure is less but meaningful. Kindle- it is amazons reading tablet, customers who are having kindle can easily access e books and download annotate passeges.kindle is contributing to 10% revenue of total sales. Affiliate marketing- it is now a very normal practice but amazon was the company who innovated this idea, though with this company was able to acquire new customers with existing offers (Jovi?evi? and Ivanovi?, 2014). Amazon fresh- it is a service of home delivery for groceries wherein all the perishable groceries are delivered to customers and along with new offers are also introduced. Amazons growth is increasing because the company is investing in transformative innovations along with its core objectives. The risk factor is much here because the company is moving beyond the familiarity and deals with its new competitors. The company offers cloud computing services to other companies with the help of amazon web services (Rossman, 2017). Amazon sets an example for other companies on how to deal with innovation portfolios. As per research it has been found that sustaining innovation is the key factor for growth and it is not easy for companies to do but amazon is the company among them who are doing this for ages and will continue to do so and this is the reason why they are growing their numbers and becoming a giant in the world of online retail (Jovi?evi? and Ivanovi?, 2014). Amazon always believes in taking risks and keeps on revising its portfolios according to the market requirements for example companys web service was a success but its fire phone was a failure, the company learned from this and completely changed its product portfolio. What matters is the right mix and it will vary as per the companys core objectives. The key to understanding all this is that why you are investing in innovations (Rossman, 2017) Conclusion Amazon is one of the best company among online retailers, it has planned various strategies in order to increase its sales, initially the company was only dealing with the books and opened many retails book shops and gradually they started offering many products like fashion, accessories, electronics. Amazon deals with four types of customers which includes sellers, enterprises, final consumers and content creators, so the company decided that Instead of delivering the products on its own company chose to outsource the products. Many sellers are connected with the company who are responsible for timely delivery of the products, warehouses have been opened at those places where the company have maximum customer coverage so that products can be delivered within the same day or maximum by next day. Companys supply chain network is very strong as soon the order is received it is ensured that it reaches on time and safely. All these strategies are helping company to build strong customer relation and are able to compete with its competitors. Company has formed a strong relationship marketing team who has built up an option in which whenever a customer makes any purchase then they are being asked to share their experience on social networking site.. This not only works as a tool for advertising but also helps in the improvisation of the product with the help of feedbacks they get from customers. Amazon as a company has faced many challenges and successfully dealt with them and finally managed to emerged as an online retail business giant. References Bernstein, D. (2015). Is Amazon Becoming the New Cool Software Company for Developers?.IEEE Cloud Computing, 2(1), pp.69-71. Bonomo, J. and Pasternak, A. (2005). 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