Using your favorite search engine, locate some information about a company that you are interested in. Identify at least two major strategic capital decisions that have been made by this company since its inception. What financial and nonfinancial issues do you think the company’s management considered when making these decisions?
Major strategic capital decisions of a company
Full Answer Section
Here are some of the financial and nonfinancial issues that Amazon's management considered when making these decisions:- Financial issues: Amazon's management considered the cost of building its own data centers and acquiring Whole Foods Market. They also considered the potential financial benefits of these decisions, such as increased revenue and improved efficiency.
- Nonfinancial issues: Amazon's management also considered the nonfinancial implications of these decisions, such as the impact on the environment and the company's reputation. They also considered the impact on employees and customers.
- The decision to launch Amazon Prime: Amazon Prime is a paid subscription service that offers free two-day shipping on eligible items. It is one of Amazon's most successful products, and it has helped the company to attract and retain customers.
- The decision to invest in artificial intelligence and machine learning: Amazon is investing heavily in artificial intelligence and machine learning. These technologies are being used to improve the company's products and services, such as its recommendation engine and its fulfillment network.
- The decision to expand into international markets: Amazon has expanded into over 20 countries around the world. This has helped the company to reach a global audience and to grow its business.
Sample Answer
- The decision to build its own data centers: In the early days of Amazon, the company relied on third-party data centers to host its website and applications. However, as Amazon grew, it became clear that the company needed to build its own data centers in order to meet its growing needs. This was a major strategic decision, as it required Amazon to invest heavily in infrastructure. However, it was also a necessary decision, as it allowed Amazon to have more control over its IT environment and to improve its performance and reliability.
- The decision to acquire Whole Foods Market: In 2017, Amazon acquired Whole Foods Market for $13.7 billion. This was a major strategic decision, as it allowed Amazon to enter the brick-and-mortar retail market. Whole Foods Market is a leading natural and organic foods supermarket chain, and its acquisition gave Amazon a physical presence in grocery stores across the United States. This decision was made in order to diversify Amazon's business and to reach a new customer base.