Mueed Babar - Amazon.pdf - Student Name CMS ID Class Case...

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Student Name: Mueed Babar CMS ID: 123-16-0019 Class: BSAF-VII Case Study: Amazon Course: Strategic Business Management Instructor: Mr. Adnan Kehar 1. What are the key issues? Amazon is faced with some major issues currently. Next, Trump's comments accusing the corporation of not paying taxes, deriving retailers from profits, and using bargaining power to charge less than the cost of delivering the packages to the US postal service. Third, it is necessary to pay labor taxes to cover the rent for the labor of the building. Third, the company has reported many years of losses due to the adoption of aggressive policies that focus more on growth than profitability. And for that company is considering and is in discussions with 20 North American cities to host its Head Quarters. The problems occur from Amazon’s strategy of not charging the taxes from third parties in its marketplace thus giving them edge to have least cost products and hence delivered at lower prices than other physical retailers. The labor taxes, on the other hand, problem arises from the very fact the Amazon considered Seattle as its production head quarter, for it could avoid more taxes. Amazon must decide upon what may go wrong with Trump’s continuous attacks. And, be concerned about labor taxes. It would either pay all the employee’s taxes that approximates to $500 per employee or come up with solution of headquartering the business somewhere in North America as discussed. Both problems are both important and urgent but the later takes precedence owing to being straight forward and the former less because of ambiguity of consequences. 2. What is the market cycle of the case company? Amazon operates in fast cycle industry as it is engaged in business that brings in the idea of incorporating technology in retailing and delivering the products to the consumers. Company has a very diversified portfolio which makes it necessary to consistently change and find out new ways of satisfying customer needs better than competitors do. However, the company has constantly been serving in grocery, and other FMCG products which are in no way going to change rather the process and customer reach technique may be ch anged thus making the company’s cycle standard. 3. Exploration of various alternatives and effect in decision-making The company must focus on relocating/expanding its headquarters in North American cities which would allow to cope with increased imposition of taxes and bearing higher employee costs. Alternatively, the company ought to consider paying labor taxes for setting the rent rises off. The company must consider the policy that focuses more on profitability than growth at given stage as the company has already invested very huge amounts in making growth. As it was done in 2001, where some costs were reduced and some of non-profitable divisions were closed.
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