Abstract

The case discusses American multinational conglomerate and technology company Amazon.com Inc.’s strategy to survive and emerge successfully from the Covid-19 or Coronavirus pandemic. The Covid-19 outbreak that started in December 2019 in Wuhan, China, soon spread to countries across the world, and led to consumers and businesses taking precautions to prevent transmission of the disease. Many were forced to stay indoors. While this affected many industries, Amazon experienced a surge in orders for delivery with consumers spending US$11,000 every second on buying products or services on the company’s e-commerce platform. Analysts felt that Amazon, which was already a hit with consumers doing shopping online and which controlled 40% of all the online retail sales in the US, as of March 2020, was better positioned to tackle the crisis due to its e-commerce prowess and its cloud computing arm, Amazon Web Services. Though the initial months of the pandemic led to sales increases due to a spike in demand, the retailer was facing issues with delivery fulfillment. Product delivery was taking weeks or even months due to a surge in demand resulting from panic buying by consumers. The company was also facing issues with its supply chain. Amazon and its founder, Jeff Bezos, also attracted the ire of its warehouse workers who alleged that the company was putting their safety at risk by continuing operations. They alleged that Amazon was not being transparent about the Covid-19 cases in its facilities and that it was slow to provide them with personal protective equipment (PPE). Some of the workers complained that the retailer was risking their lives, forcing them to work during the pandemic in a bid to keep its stores running when most people were being asked to stay indoors. The retailer was also criticized by US Senators for allegedly firing whistleblowers who had raised concerns over warehouse conditions during the pandemic. With these being early days of the pandemic, some analysts opined that it could be a tough road ahead for Amazon as the company would have to grapple with the full impact of the Covid-19 pandemic.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the reasons for Amazon’s better performance amidst the Covid-19 pandemic
• Understand the issues and challenges faced by Amazon with regard to delivering essentials to consumers during the pandemic and explore strategies on how Amazon can tackle the challenges
• Employ strategies to balance its need to build resilience in its supply chain and logistics to serve customers with the need for protecting its employees and customers
• Discuss the importance of crisis management and crisis communication
• Explore the strategy Amazon can use in future to come out of this public health crisis.

Keywords

International management; e-commerce; online retail; supply chain; e-commerce infrastructure; Business continuity plan; Covid-19 pandemic; supply chain disruptions; supply chain resilience; lockdown; social distancing; Stakeholder tension; Labor unrest; Process changes; Employee safety