The main purpose of evaluating a company’s performance is to determine the efficacy of organizational strategies, determine the progress attained with regard to attainment of goals, and provide feedback that can be used to improve performance (Attorney, 2007). Feedback obtained from evaluation is used to improve decision making and streamline organizational processes and operations. Several companies use different systems to measure performance depending on the business model they use.
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I would use several measures to evaluate the performance of Amazon.com. The first measure would be to determine the level of customer satisfaction with regard to service delivery. Determining customer satisfaction would involve using statistics from the American Customer Satisfaction Index (ACSI), which offers information that gives insights into various organizational aspects (Attorney, 2007). The index shows the level of customer satisfaction with regard to a certain product or service.
This approach would be effective because Amazon is an online company that engages in e-commerce and serves a large customer base. Amazon can also conduct its own customer satisfaction survey to determine whether customers are satisfied with its services. Low customer satisfaction would be a sign of poor performance while high customer satisfaction would be a sign good performance. Amazon operates in the service industry. Therefore, satisfying customers is one of the most important aspects of its success.
Focusing on customer satisfaction metrics in all of its businesses would be an important strategy (Attorney, 2007). Another strategy to evaluate performance involves determining the company’s cash flow. Amazon operates in an industry that is highly competitive and that is awash with online and physical retailers that are fighting for a share of the retail industry. Therefore, it is more effective to measure its performance using cash flow than using profits.
High cash flow means that the company’s products are selling fast and therefore performance is good (Attorney, 2007). Moreover, high demand for products and services translates into a high cash flow and healthy performance. Another measure would involve determining the progress attained in each of the company’s divisions with regard to attainment of goals.
For instance, the company could evaluate the progress of the marketing and administrative divisions. In marketing, the company could look at its market share, sales growth, inventory levels, and quality of products while in the administrative division, factors such as employee satisfaction and turnover could be considered (Attorney, 2007). High employee turnover and low employee satisfaction would signify poor performance.
Evaluation of Amazon’s supply chain would involve determination of the quality of products and services based on customer satisfaction levels. In addition, evaluating the support, consistency, coverage, and sufficiency of the supply chain strategy would be necessary. The activities of a company should align with the goals of the supply chain strategy (Attorney, 2007). Moreover, the various components of the supply chain should be aligned and compatible for effective provision of services.
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The strategy used should address all areas such as supply, technology, planning, marketing, finance, procurement, transportation, inventory management, order processing, manufacturing, and distribution (Attorney, 2007). An effective supply chain aligns these activities and ensures that they are streamlined to avoid fragmentation.
If a supply chain is integrated, then it is effective and will exhibit high performance. On the other hand, if it is fragmented, it will exhibit poor performance. Evaluation of Amazon’s supply chain would involve determining whether its various business processes and operations are synchronized to fit its supply chain strategy.
Attorney, A. D. (2007). Performance Appraisal Handbook. New York, NY: Nolo.