Change Management

Identify the problem

Amazon is the world’s largest e-commerce company founded by Mr Bezos as an online bookstore, now it has a market capitalization of $270 billion and becomes diversified industry. The reason I chose this business is that Amazon is a representative global company and is seriously affected by Brexit. Besides, the achievements and success Amazon is worthy of learning by all the other companies for its management is good and successful.

The company’s success is largely due to its agility and ability to “shape” its business model into the market in which the company decides to participate. This is useful for any manager who wants to optimize his business.

The Brexit has a very complex impact on Amazon’s expansion plans. In the first place, Brexit makes hiring at Amazon become much difficult. After Brexit, a shortage of migrant workers would affect Amazon’s recruitment efforts. In addition, Brexit would significantly affect Amazon’s European business.Global Equities Research shows that Brexit will raise labour costs, with an oversupply of some skilled workers and lack of others. This would reduce the profits of many companies and lead to a reduction in the size of the company’s operations in the UK. At the same time, Brexit will lead to VAT on imported parcels increasing.If the UK leaves the EU, then all goods coming into the UK will be subject to VAT, including all goods coming into the EU. Finally,Brexit also leads to Amazon’s unified delivery (EFN) and Pan-European plans being affected, and sellers will need to ship independently in the UK and other European countries, so the pressure on sellers’ inventory will increase.

Develop a solution to the problem

Suggestion to the tough hiring

To make up for the shortage of human resources, Amazon needs to hire some skilled workers from China, India and other third world countries.It can reduce labor costs while paving the way for future strategic expansion.

Suggestion to Amazon’s European business expansion

Affected by the Brexit, Amazon’s business operation scale is shrinking in the UK and Europe. In order to gain more profits and expand the business, Amazon can look for more finance support for the development of the company in those areas and other part of the world. Meanwhile, Amazon can find more potential business partners from other countries to boost the expansion.

Suggestion to increasing VAT

On the one hand, the seller should cooperate with the platform and jointly abide by the VAT tax regulations. The seller should register the tax number and upload the required tax certificate to the platform within the specified time.The seller should return to the product itself and improve the product competitiveness. As we all know, customers pay more attention to shopping experience, and have high requirements on product quality. Therefore, sellers can focus on tapping the market potential, establish special category management, and select refined products.

In order to balance the profit, the seller can try to raise the price a little, but if the product advantage declines, the operation personnel need to adjust the operation mode and reserve more flexible space for the profit of the product.

Design an action plan for Amazon

Amazon’s new projects in cloud services, artificial intelligence, logistics and distribution are just getting started. In the future development process, in order to expand the scale of the enterprise, it is necessary to increase investment in these aspects and focus on development. Companies should diversify their investments, including logistics, cloud applications and media.Expand its own logistics network, improve transportation and logistics advantages, and vigorously promote unmanned logistics and distribution in the future. So Amazon could build a convenient delivery system that meets users around the world.

Because Brexit makes Amazon’s business in Europe more complex, companies can consider diverting attention to other regions, such as China.For example, although there already had Taobao, the leader in the e-commerce industry, the Chinese market still has demand for overseas products. Due to the large number of customer bases in the Chinese market, and the strong purchasing power of consumers. So Amazon can consider expanding its business to Asia Pacific.

Define my learning outcomes

In all business, one always wonders whether certain activities should not be managed by another partner, more experienced and better able to execute them, has a better cost. Often this is a paid strategy when no actor in the Eco-system has more information than another. By studying Amazon’s management model, I learned the following:

• When it’s uncertain, manage to transfer the risk to others.
• There are necessarily synergies in the marketing mix, exploit them.Put yourself in the client’s shoes.
• Make every effort to simplify your customer’s life and remove any friction in their buying process.

References

Burnes, B. (2009), “Managing Change”, 5th Edition, Financial Times Press

Kotter, J.P. and Schliesinger, L.A., (2008), “Choosing strategies for change”, Harvard Business Review, (Jul-Aug2008), Vol. 86 Issue 7/8, p130-139

McGuire, J.B., Palus, C.J., Passmore, W. and Rhodes, G.B. (2009), “Transforming your Organisation”, Centre for Creative Leadership

Newstartestates.com. (2019). After Brexit, how will British buyers in Spain be affected?. [online] Available at: https://newstartestates.com/news/104/after-brexit-how-will-british-buyers-in-spain-be-affected/ [Accessed 31 Mar. 2019].