Unit 1 - Exploring Business - Assignment 3 [DISTINCTION* GRADED]
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Unit 1 - Exploring Business
Institution
PEARSON (PEARSON)
This essay covers the whole of Assignment 3 (P7, M5, D4) for Unit 1 - Exploring Business. It goes in depth to ensure all Pass, Merit and Distinction criteria within Learning Aim E are met with references linked. There are also documents for Assignment 1 and 2 which can be bought too!
Iqbal Ahmed 15174
Centre Number: 10500
Unit 1 – Exploring Business (Assignment 3)
Explore how innovation and enterprise contribute to the success of a business
Analyse how successful the use of innovation and enterprise has been for the given
business
Justify the use of innovation and enterprise for a business in relation to its changing
market and environment
Role of innovation and enterprise
Benefits and risks associated with innovation and enterprise
Innovation is the process of introducing new ideas/methods.
Enterprise is a project or undertaking that is especially difficult, complication or risky. 1
Innovation
One factor of innovation which applies to Amazon is product or service development. For example, “in 2014,
Amazon released the Echo, a smart speaker that connects to the Amazon Alexa Voice Service. Virtual assistants have
been steadily gaining popularity among consumers and business. Right now, the four main ones are Cortana
(Microsoft), Google Assistant, Siri (Apple) and Alexa (Amazon).” 2 CEO of Amazon, Jeff Bezos, would have gone
through a process of taking Echo and Alexa from conception to the market. The process has a set of stages such as
beginning with concept generation and ending with Echo and Alexa being introduced to the market. This has
contributed to the success of Amazon because it has helped them to be different from their competitors. For
instance, “one of the main selling points of Alexa is Alexa skills. Skills are essentially voice applications that users can
activate through Alexa. There are over 30,000 skills available currently, with new skills being added daily. The novelty
of interacting with services and brands in this way along with making experiences more frictionless is what’s driving
consumer interest and demand for Alexa skill development.” 3 This is something alternate virtual assistances do not
have, hence Amazon being different and having high demand on this product. Also, this innovation allows Amazon to
improve customer loyalty. For example, “Alexa was made to provide high quality services to their users such as being
able to stream music, control their smart gadgets, order items from Amazon.” 4 This clearly demonstrates how
Amazon are committing to their mission statement of raising the bar of customer experience and meeting their aim
of becoming a more customer-centric company. This will impact Amazon positively because Amazon because this
innovation allowed customers to be satisfied with the service of the product which will allow customers to be loyal
to Amazon and result to Amazon having an increase in their percentage of the market share. This will then allow
Amazon to maintain their position as a monopoly and have a huge advantage over their competitors. Also, this
innovation will allow Amazon to have an increase in revenue. This is because “Amazon and Microsoft teamed to
enable both virtual assistant (Alexa and Cortana) to talk to each other. With collaborations like these there won’t be
one virtual assistant that becomes dominant, there’ll be multiple virtual assistances each with their strengths and
associated products.” As a result, Amazon Alexa will be gaining a lot of recognition from this collaboration, allowing
them to have high demand and resulting to a huge increase in revenue. However, if Amazon didn’t use this factor of
innovation, Amazon would lose their loyal customers and allow their competitors to gain an advantage over them.
This is because Amazon would not be committed to their mission statement and meeting their aim of becoming a
more customer-centric company. As a result, Amazon customers will not be happy that they are not receiving the
service they would have hoped and will potentially move to an alternate company which could provide better
services. To conclude, I believe this factor is significantly important to Amazon because it allows them to maintain
their position as a monopoly. For example, a benefit of using this factor of innovation is that it allows Amazon to
develop into a new niche market. By Amazon introducing Alexa and Echo devices, it allows Amazon to become the
market leader. This is because it is a niche market and there are few competitors with virtual assistants such as right
1
https://www.merriam-webster.com/dictionary/enterprise
2
https://fxdigital.uk/introduction-amazon-alexa
3
https://fxdigital.uk/introduction-amazon-alexa
4
https://www.cnet.com/how-to/amazon-echo-most-useful-alexa-skills
Page 1 of 6
, Iqbal Ahmed 15174
Centre Number: 10500
Unit 1 – Exploring Business (Assignment 3)
now, the four main ones are Cortana (Microsoft), Google Assistant, Siri (Apple) and Alexa (Amazon).” 5 As there is not
much competition and Amazon are already a monopoly, they have a high chance of becoming market leader in this
niche market. Another benefit of this factor of innovation is that it allowed Amazon to provide better service and
customer experience. This is the most beneficial because their mission statement is to raise the bar of customer
experience and their aim is to become a more customer-centric company so by using this factor of innovation, it will
allow them to be seen as determined and professional to the public. As a result, customers will become more loyal
to the company because of their customer services and they will be seen as reliable, allowing Amazon to maintain
their position as a monopoly and adapt to the change in market and environment.
Another factor that applies to Amazon is new ways of increasing business efficiency or improving profitability. For
example, “Amazon had 100,000 robotic systems placed around the US as well as now having 200,000 robotic drives
globally and will now be able to purchase more computing technology such as robots.”6 This helps contribute to the
success of Amazon because by purchasing more robots/machinery, they are able to reduce their costs because they
will not have actual employees within their warehouses and pay wages, allowing Amazon to save money and having
an increase in profitability. Also, with the money Amazon are saving, they can invest it somewhere else such as
expanding their business by making a new branch. This will allow Amazon to store more stocks within their
warehouses, adding value to their business and if they acquire more robots within these new branches, Amazon will
be able to increase their work rate. By increasing work rate, customers will be able to receive their orders more
quickly, allowing them to be satisfied and happy with Amazon’s services. As a result, customers will become more
loyal to Amazon as alternates may not provide the same service, clearly indicating Amazon are committed to their
mission statement of raising the bar of customer experience and meeting their aim of becoming a more customer-
centric company. This will impact Amazon positively because by obtaining more advanced machineries within their
warehouses, they will increase their profit margin and revenue. This is because they will not need as many
employees within their warehouses, meaning Amazon will not have to pay as many wages, allowing them to
minimise costs. As a result, by reducing costs, they will have a bigger figure of profits and revenue. This is beneficial
for Amazon because they “take the vast majority of the money they earn and invests it right back into the
company so that it will profit all the more in the future.”7 Also, by acquiring more advanced machineries, it can allow
Amazon to obtain more of the market share. This is because they will have a higher level of productivity, meaning
Amazon will be processing and delivering their customers’ orders a lot more efficiently, giving reasons for the
customers to be loyal to them. As a result, the public will be purchasing more from Amazon rather than alternates,
allowing Amazon to gain more of the market share and maintain their position as a monopoly. To conclude, I believe
this factor is to some extent important to Amazon because it allows them to be more efficient and be able to gain a
competitive advantage over their competitors. For example, by having 100,000 robotic systems placed in their
business around the US, it will allow them to be more efficient within their business and minimise their costs
because they won’t need real employees, meaning not having to pay wages and showing that a benefit of this factor
is better processes within the business. By reducing costs, it will allow Amazon to have a higher figure of profits
which they “take the vast majority of the money and invests it right back into the company so that it will profit all the
more in the future.”8 As a result, Amazon will have more money in the long term, which can allow them to invest
that money to adapt into different markets and environments.
Also, another factor of innovation that applies to Amazon is services or markets to differentiate them from their
competitors. For example, Amazon launched their Prime subscription in 2007, “offering an unlimited one-day
delivery membership programme for about a million products. Their vision was that fast delivery should be an
everyday experience.”9 This helps contribute to the success of Amazon because it allowed Amazon to improve their
customer loyalty. For instance, this innovation allowed the public to see how Amazon are committed to their mission
statement of raising the bar of customer experience as well as meeting their aim of becoming a more customer-
centric company. Also, Amazon holds Prime day, offering Prime members huge sales on their products which allows
Amazon merchants to have huge increase in sales. For example, in Prime Day 2020, “third-party sellers, most of
5
https://fxdigital.uk/introduction-amazon-alexa
6
https://techcrunch.com/2019/06/05/amazon-says-it-has-deployed-more-than-200000-robotic-drives-globally
7
https://www.vox.com/recode/2019/8/21/20826405/amazons-profits-revenue-free-cash-flow-explained-charts
8
https://www.vox.com/recode/2019/8/21/20826405/amazons-profits-revenue-free-cash-flow-explained-charts
9
https://www.aboutamazon.co.uk/innovation/amazon-prime
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