How Amazon Shifted its Business Model for Pandemic Success

Note that this was a portion of an Academic paper that has been re-worked and reworded for Medium. The story is an opinion and does not devulge sensitive information about Amazon.

Introduction

During the COVID Era of the year 2020, we have seen many companies rise, and many companies fall based on various business models and business strategies that the organizations to attempt to propel themselves through the pandemic, or at the very least — survive the pandemic. One of the companies that has seen much success during the pandemic is the company owned by Jeff Bezos — a company commonly and widely known as Amazon. If you were attempting to design a company that could capitalize on a global crisis, Amazon would be the big-ticket winner that would survive something such as COVID-19, or any other global issue.

Regardless of being a multi-billion-dollar powerhouse, Amazon has still had to align its business strategies to fit the current state of the world. This blow is going to discuss, in a theoretical sense, on how Amazon was able to change its business model, practically overnight, and strive through the current pandemic.

Analysis

The analysis portion of this post will discuss the goals that Amazon set to be able to make it through the pandemic, while also maintaining revenue growth and sustainability. For Amazon, this meant setting goals that would allow the business to scale effecting and quickly when the pandemic hit the global economy.

The next section discusses some of the goals and how they deviate from previous goals set by Amazon.

Goals

Before the pandemic, Amazon was known as one of the largest in not arguably the largest online retailer in online shopping. Proving services such as minimum day shipping on essential and nonessential items, video and music services, and having one of the largest cloud providers (AWS) globally. Amazon had its hand in many different pockets; however, have we have seen from the economic impact from the pandemic, not every company has survived as well as Amazon.

So how did Amazon pull it off? How did Amazon, a Fortune 500 company, make such a huge impact on technology, culture, and improving what is known as one of our current generation’s worst economic crises? Let’s look at how they used metrics to scale the company through the global financial (and health) crisis by changing the core service: online retail and delivery.

Adapting Delivery Services

• Before the pandemic, Amazon is dubbed as a 2-day shipping retailer with a vast array of items shipped within two days. However, with a pandemic, Amazon understood that it had to adjust to ensure it would keep up with the surge of orders coming in. With everyone staying home, it was easily understandable that orders would surge and happen quickly.
• To meet demands and create more public values, Amazon opened itself up to hire up to 175,000 part-time and full-time workers in its distribution and delivery services to help with the high surge in orders. Amazon understood a potential problem and adjusted correctly to meet the demands. Additionally, Amazon ensured that medical supplies took first place in the delivery hierarchy, and all other items would be subject to delays in order to get medical supplies out quickly.

Lessons Learned

As the pandemic continues to impact many companies, both local and online, it goes without saying that Amazon sets itself apart from the rest of the crowd. The tactics and strategies Amazon has taken made it arguably one of the biggest tech giants now and post-pandemic. With a market value of 1.5 trillion what was once an online bookstore has now become a company that will is a fortune two company and built to come out of the pandemic as the winner.

We can learn from Amazon that sometimes certain parts of the business may need to take the back seat to let other services flourish during the times. In this case, Amazon had to pull back its prime service model where users could get two-day shipping and put medical supplies first. Additionally, Amazon opened up mass hiring to meet the surge with online orders with everyone now staying or working remotely. This type of innovative sacrificial thinking is not foreign. When asked why Bill Gates, found of Microsoft, dropped out of Harvard, he stated that if he did not, he would be “missing out on the personal computing revolution”. Amazon has done just what Mr. Gates did — they had the power and finances to help revolutionize during the pandemic era, and what is arguably becoming a “Technology Revolution.”

Missing out on the computing process revolution

Past and Future Processes

Now let's discuss at a high-level view, what the process was like for the Amazons delivery service model and how they adapted it to fit the pandemic era. The main point of this section is to illustrate the streamlined delivery service, and how it implemented some subtle but very crucial and impactful changes to ensure it could keep up with demands during the pandemic.

To start, let’s take the simple model that was used before the COVID-19 pandemic. This model was simple, yet extremely useful in hitting the goal of providing quick and efficient delivery of products and services to all of Amazons customers. The next section breaks down each process, followed by a brief high-view illustration of the business model.

Post-Pandemic Processes

1. Customer|Actor places an order on the Amazon website.

2. The website receives the order.

3. The order is processed and packaged.

4. The products shipped via 2-day shipping,

5. Products delivered to the customer.

As we can see, this model proves to be pretty easy to follow, however, with more individuals working from home, and medical supplies in high demand, Amazon needed to complete the current model with a future model that allowed it to maintain its services while also helping give relief on medical and essential supplies during the pandemic.

Future-Pandemic Processes

1. Customer|Actor places an order on the Amazon website.

2. The website receives the order.

3. The order is filtered based on if it essential or not.

4. Essential items are shipped first and processed.

5. Once there is more for delivery, nonessential items are processed and shipped.

6. Products delivered to the customer.

The new model shows that a newer business model complemented with more stay allows for the Amazon delivery model to sustain through the pandemic even with a surge of orders. While this model is proven to work through the pandemic, it should be noted that this type of new model can help maintain post-pandemic and will allow for essential items that save lives to be pushed first before less, nonessential items, are shipped.

Conclusion

In conclusion, we have taken a look at how a global pandemic did not stand in the way of technology retailer giant, Amazon, and how Amazon paved the wave for emergency services and shopping services by creating a model of a “one-size” fits all that allowed for medical supplies and essential products and services to be deployed quickly, while also allowing us to shop and get those new bath towels we want so badly.