4 Amazon’s Expansion to Africa Michael Jackson FIN/575 Amazon’s Expansion to Africa

4

Amazon’s Expansion to Africa

Michael Jackson

FIN/575

Amazon’s Expansion to Africa

Company Overview

Amazon was registered in 1994 by Jeff Bezos, an ex-wall Street hedge fund executive, where the organization’s name was chosen because it started with an A letter (Lee et al., 2017). This would enable Amazon to appear first because of the popularity and vastness of the Amazon’s river, which aligns with the goals and objectives of the organization of providing several varieties of products. After conducting research, the organization’s founder concluded that the most viable business was selling books through the e-commerce business model. During that period, other virtual booksellers, such as Silicon Valley-based book center called Computer Literacy, founded three years earlier than Amazon. The main difference between these two book stores was that Amazon was determined to deliver any book to its clients in any location in the United States. The organization successfully sold books, leading to the expansion of its portfolio by launching the sale of videos and music and started expanding its services to global markets in 1998 (Jakovljević, 2016).

Amazon’s Mission and Vision Statement

The mission and vision of Amazon are becoming a global, most customer-based company, with a platform that allows customers to find, go and discover any product they want to buy online. Based on this mission and vision, it can be said that Amazon is focused on two factors, which are achieving a global presence and being customer-centric. Expanding its operations to African countries will keep its mandate and word because its mission and vision require the organization to be worldwide and customer-centric (Lincoln IV, 2018).

Management Structure

Amazon embraces a hierarchical management structure that consists of the company’s founder, Jeff Bezos, as the Chief Executive Officer (CEO). Under Bezos, there are three senior vice presidents and three CEOs mandated to report under him. This management structure has developed over the years because of the vastness of the organization. It has also been able to maintain its flexibility, which allows it to be structured to form several small teams (Lincoln IV, 2018).

Existing Competitors Strengths

Among the main strengths of the current e-commerce retailers is their provision of flexible payment methods (Jakovljević, 2016). For instance, Jumia Kenya has incorporated several payment methods toits business transactions such as debit cards, cash on delivery, PayPal, and mobile money payments. Also, the current e-commerce organizations are providing the cheapest goods than physical retailers. Jumia is dominant in delivering products to customers in Sub-Saharan Africa, where it can offer timely deliveries in many ways. For instance, the company connects its delivery persons to its customers for specific locations (Haefliger et al., 2020).

Challenges

Despite experiencing rapid internet-driven adoptions through the ever-increasing appetite for smartphones, Africa has over 400 million internet users accounting for only a percentage of the entire population. Also, the data purchases are expensive. The limitations of purchasing data pose a more significant challenge. Most people living in Sub-Saharan Africa are experiencing a significant challenge that arises from a lack of trusted banking infrastructures. Most communities lack access to banking services, with some also not trusting the traditional approaches to banking. Further, African countries lack national street address systems in addition to poor infrastructures. This results in a significant huddle in service deliveries, particularly last-mile deliveries, making it very expensive (Haefliger et al., 2020).

References

Haefliger, S., Hueller, F., & Reza, D. (2020). Customer Complementarity in the Digital space: Exploring Amazon’s Business Model Diversification. Academy Of Management Proceedings, 2020(1), 16912. https://doi.org/10.5465/ambpp.2020.16912abstract

Jakovljević, M. (2016). Philip K. Dick in Amazon’s castle. Kultura, (150), 157-175. https://doi.org/10.5937/kultura1650157j

Lee, Y., Seo, Y., & Siemsen, E. (2017). Running Behavioral Operations Experiments Using Amazon’s Mechanical Turk. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.2972406

Lincoln IV, C. (2018). Porter Analysis: A Business Strategy of Amazon.com Through a Value Chain and Comparative Advantage Analysis of Amazon’s Trademarks and Intangibles. SSRN Electronic Journal. https://doi.org/10.2139/ssrn.3234380