Grading Scale RubricRunning head PROJECT MANAGEMENT PLA.docx

Grading Scale Rubric
Running head: PROJECT MANAGEMENT PLAN
1
PROJECT MANAGEMENT PLAN
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Final Project: Project Management Plan - Amazon
Student Name
Affiliated College or Institution
I. Operations Management
A) Significant Forces
Amazon remains the leader in online retail marketing,
especially coming from the integration of issues which have
been identified in the Porters five forces analysis. The Porters
five forces model will help analyze the external model of
Amazon, specifically the factors which impact its operations
and management (Akzin, et al. 2017). The factors to help define
the conditions of the e-commerce environment, with focus on
the market. The organization remains the biggest market player,
and to maintain this desired market position, Amazon needs to
evaluate the factors which affect its operational effectiveness
regularly.
i) Market rivalry or competition
Amazon, just like any other established organization, competes
against very strong competitors in the market (Akzin, et al.
2017). Analyzing the competition will help show three distinct
aspects which end up affecting operations management within
the market. Such factors include; high aggressiveness of other
firms in the market, the high availability of substitutes and the

low switching costs. Retail firms are known to be aggressive
and exert significant competitive forces.
For example, Amazon's chief competitor is Walmart. The
physical or the brick & mortar stores are perfect substitutes for
the online retail services at Amazon (Akzin, et al. 2017).
Management dealing with Amazon's market presence needs to
come up with better ideas to mitigate the competition more
proactively. There is a need to make the competition a strategic
factor of consideration, and a priority meant to ensure that the
organization maintains long-term competence in the market.
ii) Bargaining power of the consumers
The influence of the firm towards the consumers in the market
is determined by the bargaining power of the consumers. The
operations management of Amazon will need to be aware of the
strong intensity of buyers, and the need to always satisfy the
demands in the market (Akzin, et al. 2017). Factors affecting
operations management based on the bargaining power of
consumers at Amazon include; high quality of information, low
switching costs and the availability of substitute commodities,
in the competitive market.
Consumers access a lot of quality information online, especially
regarding services that the retailers offer. In the future, this
aspect is bound to affect Amazon, since it will make it easier
for consumers to transfer from Amazon to more productive
firms and operational friendly entities like Walmart stores.
There is a need for the operational managers in the organization
to consider the substantial bargaining power of all consumers,
including addressing its business challenges in the retail
industry (Akzin, et al. 2017).
iii) Bargaining power of the suppliers
Suppliers can control the materials and the e-commerce
operations which Amazon is involved in. In this case, there is a
need for Amazon to consider fundamental factors including; the
small population of suppliers in the market which is a strong

force in operations management. Other moderate forces include
forward integration and the size of suppliers. Regarding
operational management at Amazon, the small population of
suppliers allows the suppliers to impose a powerful force on the
organization's e-commerce business (Akzin, et al. 2017). For
example, the degree of control that suppliers have in the market,
impacts the retail operations of Amazon as a business.
iv) The threat of substitutes
Amazon just like most organizations competes with the
availability of substitute products within the online retail
market. The availability of substitutes affects the operations of
the organization and the industry environment at large; hence
this is a strong force (Christopher, 2016). Important aspects
which should be considered strong forces based on the threat of
substitution include; low switching costs, the high availability
of substitutes as well as the lower costs of substitutes from
other companies. The management at Amazon will be affected
in the future, primarily if substitutes are not controlled in the
market. High availability leads to decreased product costs,
which also limits the operational profitability of the
organization.
v) Threat of new entrants into the market
The threat can be considered the weakest force affecting the
operational management at Amazon. New firms are bound to
lead to a reduction in the market share at Amazon, in online
retail business. These threats end up affecting the organization,
which experiences weaker intensity based on significant factors
such as; high economies of scale, and the high cost of brand
development, which are both relatively weaker forces
(Christopher, 2016). If this force is not handled, consumers at
Amazon are likely to transfer to new firms in the industry,
which will lead to the empowerment of the new firms to impose
a stronger force, against Amazon's operational success. There is
a need to develop strategies to counter operational inefficiency.
B) Key Obstacles

The evolution of operations management in the modern era,
especially in the competitive business platform is alarming. The
competitiveness displays just how much change has been
experienced and the intense need for organizations such as
Amazon to keep adapting to changes as the changes come into
the dynamic business and industry platform. Amazon must be
detailed to keep up with a lot of business challenges and
pressures, during the evolution of operations management, to fit
into the modern era in business (Christopher, 2016). Amazon
was extremely keen to share its plans regarding making moves
and working on the next generation smartphones.
However, the management experienced greater challenges,
which does not get as much attention. International growth has
been a significant challenge for the organization, especially in
operations management. This was evident when the entity
reported its annual financial results, recently. The foreign
exchange fluctuations played a significant role. The
organization cost was approximately $1.3 billion, to
international revenues. However, the pattern could not have
been sustained in the growing American business and the
industry as a whole. The pattern is more worrying especially
because the entity is not failing to invest in the business. It is
also losing money which greatly affects its profitability.
Losing on profitability and revenue is a nightmare to all profit-
making entities. In countering this problem, the management at
Amazon handled the issue through embracing the need to invest
into a fulfillment center actively and increasing more efficient
and diverse infrastructure, in every country in which it operates
(Christopher, 2016). The move was aimed at building capacity
and increasing the overall demand in the market. The operations
management team believes that Amazon's strategy is aimed at
building capacity so that demand in the market can be
adequately met without any struggle, and with a seamless
experience. This was a relatively proactive approach, which
helped Amazon tackle international growth problems on a
different level.

C) Changes
The success of Amazon depends on the high-efficiency levels,
which are in the operations management, that determine the
productivity of the organization (Cummings & Worley, 2014).
The organization has learned to embrace and address key
strategic decision areas which are optimized by operations
management productivity. Being the leading player in the online
retail industry, the organization is the best example of
technologically supported productivity. The management in the
organization has ended up making ten strategic decisions,
considering the increasing complexity of operations.
The organization structure has also been modified, considering
that the organization also continues to expand and diversify its
operations continuous improvement is bound to help enhance
the capabilities of the organization to support global expansion
(Cummings & Worley, 2014).
Essential decision areas which have been embraced include the
following:
i) Design of goods and services
The organization design output addresses the primary concern
of technology. Advanced information and communication
technologies help address complexity in the organization.
ii) Quality management
Quality management at Amazon is meant to ensure that
continuous improvement is not shunned. The organization uses
its organizational culture to provide support to idea creation,
among its various personnel (Cummings & Worley, 2014).
iii) Location strategy
Accessibility of resources in the organization makes location an
area of priority at Amazon. Amazon needs to maintain its
warehouses and at the same time, be close enough to its
consumers, of the online retail business to maximize
satisfaction (Stadtler, 2015).
iv) Supply chain management.
Operations management prioritizes the need to streamline all
the supply chain efforts, to support the objectives of the

organization. For example, sellers are required to adjust to all
supply levels, based on demand.
v) Inventory management.
The focus of operations management at Amazon is to maintain
optimal levels of inventory. This is a strategic decision area,
which helps in the optimization of retail inventory size for cost
minimization while satisfying demand in the market (Stadtler,
2015).
D) Business Operations
Different organizations embrace different approaches regarding
processes, as well as operational management. At Amazon, all
operational procedures are aimed at obtaining quality output in
the long run. The company uses specific organizational
processes, which make it more unique and easy to handle
considering the numerous demands.
i) Reviewing all plans and objectives
Objectives include all activities which need to be completed for
the sake of achieving goals and objectives in an organization
(Stadtler, 2015). At Amazon, all activities needed to reach goals
are identified and plans also established for development.
ii) Determining work activities, which are needed to accomplish
identified objectives.
Once all objectives have been identified in the organization, the
management team at Amazon is responsible for analyzing all
tasks and listing those that need to be accomplished. In the long
run, all goals must be met.
iii) Classification and grouping of activities into manageable
units
Managers are expected to categorize all group activities based
on four distinct models at Amazon. These include;
departmentalization, geographical, product, customer and
functional.
iv) Assigning activities and delegation of duties
The management is responsible for assigning the defined roles
to specific persons. This is based on the specialization of

specific groups of personnel (Stevenson & Hojati, 2017). Equal
authority is provided to allow easier and more favorable work
environment.
v) Designing a hierarchy of relationships
Managers at Amazon are keen to determine the vertical decision
making, as well as coordination, or horizontal relationships of
the organization. Management also needs to diagram all
relationships to allow easier determination of hierarchy
(Stevenson & Hojati, 2017).
The business operations at Amazon have been designed to
support the strategic plan, mission and vision and the values of
the organization. The business operations at Amazon
complement all operations, which makes everything in the
organization run smoothly and effectively. For example, the
strategic plan, mission, and vision of the company are
encouraged based on the operational activities. The ultimate
goal is to achieve overall success, for the benefit of the
organization as a whole (Stevenson & Hojati, 2017). A lot of
factors affect the profitability and productivity at Amazon. For
example, profitability is affected by organizational expenses,
corporate social responsibilities, and the overall economic
conditions.
E) Key Trends
Production trends have since evolved, following the dynamic
business platform in the global context. Quality, resource, and
information management have also changed, which have
majorly impacted the business operations of Amazon as an
organization. For example, regarding information management
and quality, technology has played a significant role and is
recognized as a critical trend affecting organization operations
at Amazon. Also looking at the production point of view, most
businesses are now producing based on market demand, to avoid
stock-outs and costs of holding goods, which increases the
losses and expenses incurred (Stevenson & Hojati, 2017).
Quality is gauged through consumer acceptance and comparison

with other organizations in online the retail industry such as
Walmart among other entities.
F) Impact
Business operations of Amazon, just like any other
organization, are bound to be affected considering the major
developments on business operations products and services in
every entity should be maintained, in terms of determining
quality effectiveness and control. The trends have led to
increased production quality, especially in terms of services
(Stevenson & Hojati, 2017). Other trends include; advancement
in technology, emerging markets end up gaining power,
demographic changes, global warming, and the increased growth
of the population. Decisions made at Amazon need to
completely conform with the changes, hence the process should
strictly rely on global changes in the market.
II. Operationalization
The technique that our company Amazon is initiating in
operationalization is through quality management to align all of
its processes. Quality management arises when the firm
recognizes any mistakes and shortages that are associated with
the products been provided and effective measures are
initialized to counteract the limitations (Cummings, & Worley,
2014). Quality control acts as means for success for the
company since it is with the provision of the best items that
customers wish to purchase what the customer will need from
the firm. The paper outlines the concepts of quality management
including the total quality management which is the key to
maintaining the high-quality of items by Amazon. The business
strategy of operationalization will comprise of the work
breakdown structure that offers information about the major
tasks that should be performed in connection with quality
control. Therefore, the business opportunity to be explained in
this paper will reference the quality management that is
required from the firm to seize offering of high-quality goods
with the use of statistical quality control.

A) Potential Costs
It is evident and inevitable to incur some costs with the
introduction of quality management concepts and perspectives.
In other words, it is not possible to come with measures that
will be meant to attain quality management and fail to incur
some costs. For instance, technology is one of the aspects that
are associated with quality management. Technology requires
the adoption of information management measures such as the
purchase of computers and creation of other systems that are
meant to keep track on the continuous provision of effective
goods and products. Therefore, additional funds will be incurred
to the firm needs to improve the activities that are currently in
place concerning quality management. The other costs are
associated with the training programs that must be adopted and
introduced to the workers.
The other costs associated will be in the advertisement once the
firm seeks to offer awareness to the public concerning the
goods. Moreover, creating ads and making them accessible over
the internet and social media is costly. Some of the risks that
are associated with quality management include lack of
adequate skills among the personnel since the employees will be
faced with new technologies. The other risk includes the lack of
adequate funds that are supposed to accommodate for the new
technologies introduced by Amazon. Also, it is possible that
there might be a risk if all the employees do not support the new
changes adoption resulting in reduced collaboration among the
team members.
However, even with the existence of the risks and costs, there
are some benefits associated with quality management. For
instance, it is known that clients never wish to purchase goods

that are of poor quality. In other words, no person ever wishes
to purchase an item that is low in its quality. Therefore, with
the improvement of quality, there are high chances that Amazon
will attract a significant number of clients who will gladly want
to buy items from the company. Moreover, high sales
correspond to high revenue suggesting the company will manage
to earn itself a high proportion of income from all the
investments that it will put in place regarding operations and
quality control (Cummings, & Worley, 2014). Additionally,
there are high chances that Amazon will enjoy an improved
market share that will transform into advanced relationships
between Amazon and its potential customers. Therefore, it is
evident that there are high chances that Amazon will enjoy
additional benefits with the sustainment of quality management
and operations.
An estimated notional demand of 25,500 units, the average
notional demand should be 4,250 per month over the semiannual
period (Dey, Cheffi, & Nunes, 2015). To produce these units per
month given a standard labor rate of 0.74, the workforce
required will be:
4,250*0.74 = 3,145 units.
Units per hour given 160 regular hours available = 3,145/160 =
20 workers.
Opening Inventory: 3,145 units
Current workforce: 22
Regular hours available: 160
Overtime hours available: 20

Standard of Labor: 0.74
123456
Demand
500500040002500100003500
Production
425042504250425042504250
Cumulative
Demand
50055009500120002200025500
Cumulative
Production
4250850012750170002125025500
Excess Units
375030003250500000
Units Short
00007500
Description
Months
Since the workforce that is needed is 20 workers, the company
will have to lay off two employees to minimize costs and at the
same time maximize in profits.
The table below shows the estimated operation costs:
CostPer Unit ($)Total Cost ($)
Materials 4040*25,500 = 1,020,000
Labor1010*25,500 = 255,000
Laying off10001,000*2 = 2,000
1,277,000
Total Cost
The semiannual production plan above shows that the total cost

of production for the six months period is $1,277,000.
B) WorkBreakdownStructure
C) Narrative
For quality management to be attained, three tasks are
associated with its success. The three tasks are total quality
management, business operations, and changes for
improvements that should be adopted. The three tasks are
associated with other three subtasks that result in their success.
For the total quality management, there is the issue to do with
institute leadership that refers to the situation by which Amazon
should focus on making sure the best leadership team is created.
In other words for Amazon to excel, there is no doubt that its
management team should be highly experienced and placed in
the right conditions to succeed. It includes ensuring that the
leadership team is determined to work in hand with all staff
members since unity will grant them better results.
Additionally, the firm has a responsibility to train its employees
in order to possess all the required skill sets for them to conduct
the production activities and meet the defined expectations.
Additionally, the company should introduce and support a
culture of improving its services and goods from time to time.
The culture of improving is necessary as technology advances,
the company can make sure that it fulfills the desires of its
consumers by incorporating all of its items to align with the
advancement of new technological development that arise.
The other task associated is business operations which include
the reviewing of the plans that have been implemented by the
firm. In other words, it is required that the company should
always make sure that it assesses all the plans that have been in
connection with quality control to make sure that the plans are
appropriate (Cummings, & Worley, 2014). The aim of the
activity is to make any necessary changes that are related to any

mistakes and shortages that might have occurred with the plans
that are already in place. The other task is the determination of
hierarchy that considers the Amazon Company should ensure all
staff members are aware of the leaders in place to receive
directives and expectations regarding what the staff member
should do. With measure in place, it becomes easier for the
leaders to monitor how the workers are performing their duties.
The other task is the delegation of the duties that require
Amazon to always ensure that the assignment of roles is done
by evaluating a worker’s skills and traits. In other words, it is
required that the Amazon Company should assess all the
abilities of the employees to make sure the staff members can
significantly perform the duties well.
The other task is the adoption of changes into ensuring that
quality is attained which includes developing the item’s design
to make sure that it is what the customers want at that particular
time. Since clients tend to lose their taste for a certain design
with time, it is indispensable for the company to transform the
product’s design that will ensure that the clients never lose their
taste for the corporation and will always appreciate their effort
in supplying the market with new items. Supply chain
management is another task that should be managed requiring
the firm to realize better ways and channels that can be adopted
to help reach the market. Inventory management should be
controlled and aligned with the core business activities since it
will ensure that the company does not lack items to offer the
clients. In other words, inventory management is a task that
requires the firm to research and analyze the market trends that
relate to consumer demands to make sure to always have all
what the consumer needs. The inventory management also
includes offering of the products at the most convenient
locations so the clients will not have a hard time to getting to
the products.

D) Key Milestones
Different deliverables, milestones, and resource requirements
are necessary for the attainment of the different objectives that
have been implemented by Amazon. For instance, with the
introduction of total quality management, the company will
select key team members that should be given the mandate to
overlook all that happens within the firm. In other words, there
is the need to assign a team lead to watch the overall business
activities that are based on ensuring the quality of production is
ongoing throughout the operations of the product. Moreover, the
management team has a responsibility of ensuring that other
team members are open to come to with questions or concerns if
facing significant difficulties. It starts at formulating and
sustaining healthy relationships between the management team
and staff members. When management ensures to empower and
hold personnel responsible for performing tasks; team members
will always seek to coordinate and collaborate to help the
business in identifying how best it can create more quality than
any other company in the same business market.
The other milestone includes the construction of budgets and
ensuring that the budgets are met with the operational plan that
was estimated in the plan. The budgets are the strategies that
will guide the operation on how resources should be allocated.
The budget will ensure that all the business departments are
granted the best share of the available resources. The
monitoring of the budget also ensures every department keeps
good visibility of tracking expenditures. With the watch out on
the level of expenditure, it becomes easier for the company to
make sure that no overspending is noticed and so the
departments are using the right proportions of the available
resources. Additional deliverables include making sure that the
projected profits do not have a big difference in the actual

profits. It is paramount and beneficial that the actual profits
show a positive sign comparing with the projected performance.
Information management is another aspect that should be
controlled and monitored to make sure that it is done in the
right way. Therefore, Amazon has a responsibility of ensuring
that all the proceedings are recorded appropriately, along with
tracking and documenting key information to stay keen on
trends being done within operations. The documented
information is to be utilized when the firm needs to research
and evaluate how it has been progressing and which areas that
have proven to be declining with time. It helps in discussing the
way forward on the activities that are noted to have declined to
bring up the best methodologies that will assist the firm in
recognizing a significant change in a positive way.
Additionally, technological change is an aspect that should
never be neglected at any time. It is because it has been
discovered that the companies that have been noticed to be
doing extremely well in the market have never failed to
introduce the most recent technology. Clients have portrayed a
high desire for improved technology expecting Amazon
Company always to seek the best ways and perspectives that it
can adopt when requiring maintaining the newest technology
(Paul, 2013). Additionally, for Amazon to attain the customers’
demand there is the need to always come up with questionnaires
and interviews whose aim is to give the clients an opportunity
to choose what the client want from the company. It is a method
of involving the clients in its production activities, which yields
the corporation improved image in the market that corresponds
to improved returns on investments.
E) Potential Obstacles

The key obstacle in the industry is the competition that arises
with the existence of other large firms in the same industry. In
other words, the corporation is faced with a high competition
that might transform to reduced returns if the firm does not take
full responsibility for eradicating competition. Therefore,
different companies will always be fighting for a larger market
share than the other suggesting that it is the mandate of Amazon
to do its best to earn a better portion of the entire market.
Additionally, there is the issue to do with technological
challenges and pressures that relate to operation management
(Stevenson, & Hojati, 2017). In other words, it is challenging to
attain operational management with the continuous evolutions
that occur concerning technology and various measures of
advancement.
Amazon lacks the certainty of which technology will be in place
in the market after a certain period since the market has always
introduced new technologies. Also, not all the employees are
aware of the computer-aided design and JIT technique
suggesting that there will be ineffectiveness among the
employees. Additionally, most of the tools that need to be
purchased by Amazon to introduce improved technologies are
very costly which results in difficulties. Moreover, with
challenges arising from international growth, it becomes
complex for the staff to control all the global operations
including difficulties such as the foreign exchange fluctuations.
Therefore, with the existence of all these challenges, it becomes
necessary to understand which risk mitigation strategies should
be utilized.
F) Risk Mitigation
The risk mitigation strategies related to these obstacles include
identifying pain points to realize what Amazon should do

differently from the other competitors. With the existence of
technological challenges, the firm should utilize a selected team
that will be responsible for development and research activities
that will help in accessing new technologies at the moment the
knowledge is introduced into the market (Stevenson, & Hojati,
2017). In other words, Amazon should never stop to research
since that is one method that can help in discovering the most
recent technologies. Additionally, it is no doubt that the
company should never stop to train its workers since that will
advance their chances of being competent in their actions. The
initiation of budgets will always help in ensuring that the
company has profits that can be utilized to purchase most of the
tools that are inevitable if the company needs to use new
technologies.
The component of quality management within operationalization
comprises of the various strategies and steps that are related to
aligning and advancement of business operations. The company
has to make use of total quality management, make sure that it
adopts the best business operations, and initiate significant
changes if it is to succeed. For the corporation to reach the
majority if not all of its objectives, the company has to initiate
risk mitigation strategies to include research activities and
employee training. Additionally, it is paramount that the firm
keeps a good track on documenting and recording information
from management and the technologies the business utilizes.
III. Life Cycle Management
A. Life Cycle
The toy and games business idea will be subject to five basic
cycles since its development and embracement in the
organization. These stages include:
i) Seed and development
At this stage, the idea is officially in existence. The owner is

now ready to take the plunge, and there is a need to assess the
viability of the idea (Stadtler, 2015). Advice and opinion are
gathered at this stage, including personal abilities and readiness
of the market for the idea to be implemented in business
operations.
ii) Startup
After successful testing of the idea, there is a need to launch it
in the market. The startup is considered to be the riskiest stage
of the business idea life cycle. Adaptability is of the essence at
this stage, which will ensure that feedback is obtained from
consumers.
iii) Growth and establishment of the idea
At this stage, the idea should now be generating a large source
of income and attracting new consumers into the market
(Stevenson & Hojati, 2017). This stage of the cycle is also
characterized by improvement in revenue, which is enough to
cover all ongoing expenses. Profits also begin to improve
slowly, but more steadily.
iv) Expansion
The business begins to adopt a specific routine of operations at
this stage (Stevenson & Hojati, 2017). Staff is already in place
for the management of the idea, and the firm at this point has
already established a presence within the market.
v) Maturity
The organization receives stable profits, and the idea generator
is left with two options; to exit the business or expand to further
opportunities in the market and industry as a whole, for
increased profitability (Stevenson & Hojati, 2017).

B. Profit Generation
Based on the lifecycle as described in the above section, a lot of
profit generation and cost saving opportunities are present, and
significantly associated with the toy and game business idea.
First, the major opportunity which needs to be exploited is the
aspect of children in most target markets. Considering the high
middle age population especially in locations within which
Amazon operates, the population of children that find toys and
games fascinating is bound to boost the revenue of the
organization for this specific idea.
Another opportunity which needs to be exploited includes the
high demand for toys and games in the consumer market. Most
organizations are not keen to implement and avail toys and
games, which is considered demanding in most commercial and
profit-making organizations. With this gap in the market, the
idea is obviously going to generate profits for the business,
which may as well lead to increased revenues, high recognition,
and positive public image in the retail industry as a whole.
C. Phase-Out Plan
The planning phase should be the first step in the product
phase-out process. After a phase-out plan is laid out, there is a
need to embrace the phase-out process now. Depending on the
product in question, which is toys and games, in this case, the
process might take around a year, to completely exhaust all
market supplies (Stevenson & Hojati, 2017). This stage should
incorporate the sales team, which should, in turn, make sure that
there is a clean message on the failure to replace the
commodity.
The marketing department should also be involved in the
withdrawal of marketing material from all websites, and
catalogs related to the commodity. No more effort should be
spent on research and development. Regarding manufacturing,

handling the commodity should be in a way that components
and inventory are eliminated (Stevenson & Hojati, 2017).
Controlling department should decide on handling for costs
related to obsolesce. With this plan in place, toys and games
will be phased out systematically.
References
Aksin, Z., Armony, M., & Mehrotra, V. (2017). The modern call
center: A multi‐disciplinary perspective on operations
management research. Production and operations management,
16(6), 665-688.
Christopher, M. (2016). Logistics & supply chain management.
Pearson UK.
Cummings, T. G., & Worley, C. G. (2014). Organization
development and change. Cengage Learning.
Stadtler, H. (2015). Supply chain management: An overview. In
Supply chain management and advanced planning (pp. 3-28).
Springer Berlin Heidelberg.
Stevenson, W. J., & Hojati, M. (2017). Operations management
(Vol. 8). Boston: McGraw
Hill/Irwin.
Paul, L. (2013). Sustainability. Hoboken: Wiley.

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