Amazon And Urbanization

Summary
Laya (2015) reported in the news that the potential growth for online shopping in Mexico has caught the attention of Amazon. A relatively high degree of urbanization and an increasing number of millennials present Amazon with lucrative opportunities in Mexico. However, Amazon has to innovate technologically to cater to Mexicans specifically as they have not fully changed their shopping habits and have trust issues of online payment.
Application of concepts
Socio-cultural environment
The demographical factors link this article to the socio-cultural environment. Urbanization is defined as the ‘social process referring to the physical growth of urban areas with the increase in population’ (Ramachandra, Bharath and Sowmyashree 2013, p.

Amazon’s innovative move in respect of payment options is caused by market and user practices as Joker (2007) found out that the income and educational levels are correlated with preference of payment methods. This amongst other factors such as infrastructure included the sociotechnical configuration, play an important role in Amazon’s technical trajectories (Geels 2002). With ongoing government effort to improve electronic commerce in Mexico and incremental innovations taking place, Amazon needs to be swift in repositioning itself to embrace opportunities and counter threats in the existing electronic commerce

This incremental innovation has negative impacts on the electronic commerce regime.
However, as security is a strong variable to the customers’ perceptions of online shopping quality (Janda, Trocchia and Gwinner 2002), with this new payment system, Amazon ensures its customers that their financial and privacy issues are not at stake as the payment does not take place on the internet. Besides, this incremental innovation is better at satisfying the mainstream needs and brings immediate reward with a lower market risk (Slater and Mohr 2006).
Nevertheless, with globalization, the use of smart cards for electronic cash is probable to be the future (Buck 1996), Amazon’s R&D in this payment method is unsustainable in the future. Also, according to Song et al. (2014), high levels of technological opportunity have a positive impact on the quality of project performance, Amazon’s innovation can be argued to be of low technological opportunity as it is only catered to a specific country. Thus, in the long term, Amazon does not achieve competitive advantage in terms of