Change plays a significant role in the growth and proliferation of businesses and organizations. Amazon is the world’s leading tech company and it has gone through various transitional and transformational phases in its history of more than three decades. However, studying the change management strategies and practices of Amazon gives you a key insight into how the company remained competitive in the changing environment. Today, we’ll discuss Amazon change management case study; its historical background, and analysis of its CM successful processes.
Historical Background of Amazon
Jeff Bezos laid the foundation of the online bookstore Amazon in 1994. He was running the online store from his garage and his focus was to sell books. Soon after Amazon amplified its product portfolio and started offering a vast variety of products and goods like clothing, toys, electronics, accessories, and much more.
Amazon became a public company by the end of 1997, and it is now operating its business in 50 states of the US and over 160 countries across the world. However, Amazon started to expand its business portfolio in the 2000s.
- 2006 – The platform launched Amazon Web Services
- 2007 – Amazon introduced the Kindle e-reader
- 2010 – Amazon achieved the status of becoming the world’s largest online store by offering millions of products to many customers across the world
- Currently – the market capital of Amazon is more than 1.5 trillion US dollars and 15 million employees are working for the company to manage its worldwide operations
Why Amazon Required Change Management
Amazon has progressed a lot over the past three decades, and the need for change management has become more important than ever. Some of the top reasons are as follows;
Fast Changing Industry
Amazon has been operating its business in the tech industry for the past three decades. The tech industry is evolving relevant to the changing market conditions, customer preferences, and changing technology. Amazon would be at risk of losing its market leadership position if it doesn’t implement the change management strategies effectively.
Large Organizational Size
Approximately 1.5 million people are working for the company to manage its worldwide operations. Implementing changes in the vast size and scale of Amazon would be highly time-consuming and complicated. The processes of CM are necessary to make sure that you are communicating the changes clearly and effectively with various stakeholders of the company. You should launch the changes in such a way that would reduce disruptions.
In order to stay ahead of the competition in the fast-changing environment, it puts a lot of pressure on Amazon to implement change management effectively. Implementing changes effectively allows Amazon an opportunity to maintain its competitive position in the market.
Expansion into Retail Food Industry
Amazon purchased the retail grocery store brand Whole Foods in 2017, and it was focusing on providing locally produced organic food items to customers. The company bought it for 13.7 billion US dollars, and many experts considered the entrance of a Tech Company into the food industry would be a game changer.
On the other hand, many experts, investors, and industry analysts were skeptical of Amazon’s acquisition of the food brand. Some considered it a smart strategic move that would help the company to take advantage of the growth and profitability of the grocery market. However, the reason for the skepticism of some experts is that they think that the company would face issues in the physical operations that the brand has no experience with.
Despite receiving mixed reactions and criticism from industry experts and analysts, Amazon completed the transaction in 2017. The company combined the food brand with its business operations by launching changes in the supply chain, product offering, and store pricing. However, it allowed the company to launch Amazon Go and bring innovation and creativity to the grocery store market.
Successful Process of Amazon Change Management Case Study
Some of the key factors that have successfully contributed to the acquisition of retail chain food brands are as follows;
The tech expertise allowed Amazon to successfully integrate the retail food brand into the company’s business operations with limited disruptions in the customer experience and the retail store’s daily operations. However, the tech brand launched changes with limited negative impact in the following areas;
- Product portfolio
- Supply chain
During the integration process, the focus of Amazon is to satisfy the needs, wishes, and concerns of employees by taking the following steps;
- Combining the culture of two different organizations
- Launching training programs
These strategic steps played a significant role in employee engagement and satisfaction levels and allowed the company to maintain employee loyalty.
Innovation & Creativity
The reason for the introduction of Amazon Go and Amazon Fresh is the company’s purchase of retail chain brands. In fact, the innovation and creativity in the grocery industry have allowed the company to maintain a leading position in the market. It helped the company to amplify its growth and profitability.
A strong financial position allowed the company to complete the transaction of acquisition. It is because Amazon saw tremendous growth in the grocery market. However, financial strength plays a dominant role in the effectiveness of the change management processes.
Change Management Process Analysis
When it comes to implementing changes while integrating the food portfolio into Amazon’s business operations, the tech company focused on the following steps;
Amazon invested a lot of time and resources in the planning before closing the acquisition. The company recognized the key growing areas; how to integrate the food brand into its business operations, and pricing strategy; analyzing the impact of change on customers and employees.
Communicating Change Plan
When it comes to implementing the change, an effective communication plan is highly important. Amazon communicated with its employees, stakeholders, investors, and customers. The tech company showed its commitment to the food industry and focused on the benefits for customers and employees.
Training, Learning, and Education
In order to bring employees on board with the change program, the company training, education, and learning programs for the employees in the food brand. Amazon offered them training on how to use technology in the integration processes and operations.
Agility & Flexibility
Amazon followed the agile and flexible approach in the process of change management. In fact, the company brought changes in its plans based on the reviews of customers and employees.
Amazon was aware of the need for cultural changes in the company during the change management process. Both companies had different cultures because they were operating in different industries; the company offered them support during the cultural integration process.
Conclusion: Amazon Change Management Case Study
After an in-depth study of Amazon change management case study; we have realized that the Tech brand has successfully implemented the changes despite all the odds. If you are learning about the factors that have helped the company to integrate changes, then you should keep in mind the abovementioned guidelines.
Ahsan is an accomplished researcher and has a deep insight in worldly life affairs. He goes Live 3 days a week on various social media platforms. Other than research writing, he’s a very interesting person.