AMAZON

Meaning in their new logo.

The smile that goes from A to Z tells that the company is willing to deliver any product,
anywhere in the world.

About Amazon:

 Amazon Inc is an American international e-commerce company.

 It was started by Jeffrey P. Bezos in the year 1994.
 It is a world’s largest online retailer
 When many .com companies were not able to survive during the 90’s, Amazon managed
to survive and is successful now.
 It is the 11th most searched site around the world.
 The structure of website will definitely make you to buy.
 Buying suggestions based on your search.
 Amazon also acquired many about to close .com companies
 like IMDB, CD Now and Pets.com

Why has Amazon.com succeeded online when so many other companies have failed?

 Amazon always welcomed addition of new products to its site. Even though it has started
its business selling books, presently it deals with 21 different categories of product.
 The wide range of products availability has created a very strong customer base.
 If any individual wants anything, the first vendor that comes to people’s mind is Amazon.
 It is easy to sell your product with the help of Amazon. This attracted many suppliers.
 You can’t get things at a cheaper price anywhere than Amazon.
 Anywhere shipping. If the product is dealed directly by Amazon no shipping charges.
 Will the kindle revolutionize the book industry?

 Kindle offers you a easy to carry option.

 You can carry many books in a slim tab.
 Reference is easy.
 Reading at night time without a light is possible.
 Many sites offers free kindle books.
 In future, the kindle users will increase.
 With the enormous development of technology, people get updated with their
electronic machines.

What’s next for Amazon? Is cloud computing the right direction for the company? Where else
can it grow?

 Amazon has already entered into the cloud computing business.

 The company has a very good scope on the cloud computing. It is performing well.
 It’s also said to be one of the safest sites for CC by forbes.

Suggestions:

 Amazon can enter into online entertainment and communication.

 It can develop software for international calling at cheaper rates.

AMAZON SWOT ANALYSIS

Amazon’s Strength (Internal Strategic Factors)

Amazon.com Inc.’s e-commerce success relies on the effective use of business strengths. In the
SWOT Analysis framework, this aspect enumerates the internal strategic factors that the
company uses to maintain and improve its operations in the online retail, technology products,
and online services markets. The following strengths support the success and continuous growth
of Amazon:

1. Strong brand
2. Moderate and expanding business diversification
3. High capability for rapid technological innovation, especially in online services

Amazon.com Inc. has the strongest brand in the online retail market. This strength is partly
responsible for the rapid growth of the business, especially in its early years, considering brand
 recognition and confidence among consumers. Moderate business diversification is also among
the strengths in this SWOT analysis of Amazon. For instance, the company now operates as a
provider of consumer electronics, online retail services, brick-and-mortar (non-online) retail
services, private-label goods, and information technology services, including cloud-computing
services, among others. These diversified operations are complementary and make Amazon.com
Inc. a formidable competitor. Moreover, the high capability for rapid technological innovation
strengthens the business in terms of the ability to respond to trends, at least technologically. 

Amazon’s Weaknesses (Internal Strategic Factors)

Amazon’s weaknesses present challenges that limit its business growth and expansion. This
aspect of the SWOT Analysis model outlines the internal strategic factors that impose difficulties
in growing or improving the business. In this case of Amazon, the following weaknesses are
most significant:

1. Imitable business model

2. Limited penetration in developing markets
3. Limited brick-and-mortar presence

Amazon.com Inc. has a business model that is easy to imitate. For example, other companies can
establish e-commerce websites that sell just about anything. In the SWOT analysis framework,
this internal factor is a weakness that creates opportunities for other firms to impose greater
competition against the e-commerce giant. Amazon’s limited penetration in developing markets
is also a weakness that prevents the business from benefitting from the high economic growth
rates of these markets. On the other hand, the company’s limited brick-and-mortar presence is a
barrier to rapidly expanding in the non-online market. Nonetheless, considering its acquisition
of Whole Foods Market, Amazon is on track to grow its non-online operations. Overall, the
internal factors in this aspect of the SWOT analysis impose challenges on the company,
especially in terms of growth in current and new e-commerce markets. Addressing these
challenges may involve changes in Amazon’s organizational structure and design, as well as
corresponding adjustments in strategic planning and management.

Opportunities for Amazon.com Inc. (External Strategic Factors)

There are various opportunities to improve Amazon’s business performance and service quality.
In the SWOT Analysis model, this aspect identifies the external factors that the company can use
to enhance its business, such as through growth in the international e-commerce market. In this
case, Amazon has the following opportunities:

1. Expansion in developing markets

2. Expansion of brick-and-mortar business operations
3. New partnerships with other firms, especially in developing markets

Amazon has the opportunity to penetrate developing markets. This move should establish the
company’s presence before other large e-commerce firms take root, thereby giving the advantage
 of a stronger competitive edge. In relation to the weaknesses considered in this SWOT analysis
of Amazon.com Inc., there is an opportunity to expand the company’s brick-and-mortar
operations. This external factor refers to the potential revenue increase that comes with
establishing a stronger presence through more brick-and-mortar stores, in addition to existing
Amazon Go stores. Furthermore, the opportunity to develop new partnerships with other firms is
an external strategic factor that the company can exploit to expand its reach in the global e-
commerce industry. Also, partnerships with businesses that have a strong corporate citizenship
image can improve the effects of Amazon’s corporate social responsibility strategy and
stakeholder management efforts. The company can use these external factors to improve market
reach and revenues. Thus, this aspect of the SWOT analysis illustrates that Amazon can continue
growing despite increasing market saturation.

Threats Facing Amazon (External Strategic Factors)

Amazon experiences various threats corresponding to its operations in different industries and
markets. External factors that reduce or limit business development and performance, such as in
e-commerce operations, are considered in this aspect of the SWOT Analysis model.
Amazon.com Inc. must address the following threats in its industry environment:

1. Aggressive competition with online and non-online firms

2. Cybercrime
3. Imitation of business model and products

Competition remains one of the strongest threats against Amazon.com Inc., with regard to
competition against firms like Walmart, Home Depot, Costco
Wholesale, eBay, Apple, Google, Microsoft, and Netflix, among others. This competitive
pressure represents the strategic management challenges in the markets for consumer electronics,
retail, e-commerce, online digital content distribution, cloud-based services, and other
information technology services. Cybercrime is also pertinent to this SWOT analysis of
Amazon.com Inc. Cybercriminals threaten the security and integrity of the business, as well as
customer confidence in the company. The PESTEL/PESTLE analysis of Amazon.com
Inc. identifies this threat as one of the technological trends affecting the industry. Another threat
is imitation, which is an external factor that could reduce the e-commerce company’s market
share and brand value. Amazon’s marketing mix or 4P helps address the adverse effects of this
threat. Overall, the external strategic factors presented in this aspect of the SWOT analysis point
to the need to develop stronger measures to strategically overcome the threats in the e-
commerce, retail, consumer electronics, consumer goods, and information technology services
industry environments.
 THE CHALLENGES FACED BY AMAZON

-Amazon has grown to be one of the most successful companies in the world, grabbing market
share not only in retail but cloud computing, media, and entertainment.

-Despite its successes, the company remains open to competitors as well as razor-thin profit
margins.

-The company's stock has a beta of around 1.3 and trailing P/E ratio of 138x, making it still a
highly speculative investment fueled by anticipation of even greater growth ahead.

It isn’t every day that Amazon looks like the runt of the litter. Here are a few of the key
challenges facing Amazon in 2020:

1. Competition

Competition is the most salient operational risk faced by Amazon. The general merchandise
retail industry is highly competitive and includes formidable competitors such as Wal-Mart
Stores, Inc., Costco Wholesale Corporation and Target Corporation. Specialty retailers such as
Staples, Inc., Best Buy Co., Inc., Home Depot, Inc. and Bed Bath & Beyond, Inc. have gained
traction as physical showrooms and category specialists. All of these major retailers have
invested heavily in online sales channels in response to evolving consumer tastes. The build-out
of well-regarded retail e-commerce sites threatens to challenge Amazon’s supremacy in the
market. These developments remain mere threats, however, as Amazon still holds more than
40% of the highly fragmented online retail market as of 2019.

2. Profit Uncertainty

Amazon operates with very narrow profit margins and was not able to sustained net profits
during the early to mid 2010s, where it posted net losses in FY 2012 and FY 2014. Prior to 2019,
the highest full-year net margin reported by the company was 3.7%, which was achieved back in
2009.10 Competitive pricing ensures Amazon’s gross margins stay within a only small range of
modest values.Amazon’s management is committed to infrastructure expansion and growing
investments in research and development, necessitating high operating expenses. For 2019,
Amazon's profit margin rose to a record high, of just over 4%.

3. Slowing Revenue Growth

Amazon has delivered strong growth performance over the past decade, with annualized revenue
growth metrics rarely falling below 20% and sometimes approaching 40%. This achievement has
stoked bullish investor sentiment and aggressive analyst estimates. Nonetheless, growth has
decelerated on average over the 2010s, with Amazon's revenue for the twelve months ending
September 30, 2019 posting a 20.14% increase year-over-year.12 Several factors have
contributed to this trend. Rapid growth is typically difficult to sustain as the base level rises each
year, meaning a larger nominal expansion is required to drive a constant growth rate.
Intensifying price competition in both retail and Web services also has an impact on sales growth
rates. Despite a substantial shift to online sales channels, e-commerce still makes just around
12% of the total retail market.

4. Highly Speculative Valuation

The valuation of Amazon shares poses investment risk. At nearly $3,000 a share as of July 2020,
Amazon is a highly speculative investment with a market cap over $1 trillion and a trailing P/E
ratio of 138x earnings.151611 If a person were to assume Amazon will meet the highest analyst
estimates two years from now and then grow 28% each year over a five-year period, the market
price still implies nearly 10% annual growth over the long-term. This is not an impossible
outcome, but investors are assuming very favorable performance over a long, difficult-to-
forecast interval. There are likely and plausible outcomes that involve less-stellar results.
Speculation is common for unprofitable growth companies with an uncertain medium term, but
this fact does not reduce the risk of unmet expectations.

How Amazon managed the coronavirus crisis and came out stronger:

 Amazon remains one of the few companies to benefit from the coronavirus pandemic,
with surging online sales helping it to report record profits in July.
 It didn’t get there without navigating a slew of challenges, including a labor crisis that
drew public scrutiny from lawmakers, regulators and workers rights groups.
 Amazon’s supply chain was hit hard, resulting in delivery delays and out-of-stock
notices.

THE LEADERSHIP CHANGES THAT HAVE TAKEN PLACE OVER THE

YEARS AND ITS IMPACT ON THE CREATIVITY AND INNOVATION

News of Amazon's innovations and innovative industry moves are becoming more and more
common, as is the company's recognition for being an innovation-friendly workplace. Here's
how that happens at Amazon according to the company, and how we can make innovation part
of our company's DNA as well.

1. Every single employee is empowered to innovate.

Any employee with a big idea outlines the vision for their product idea with a theoretical press
release to go with it, and writes a FAQ that explains the customer benefits and answers potential
customer questions. A team of fellow innovators at Amazon evaluates the idea, and some get
funding and make it to market. As an example, Prime Now, Amazon Go, and Alexa all came
from this process. It's a smart approach because it's an actual system and process that's been
baked into the culture--there's no excuse not to contribute if you have an idea. It also forces the
inventor to think through the idea from the customer's perspective. And it's something we can do
at our company, as long as we're willing to have the network of evaluators established and are
willing to put our money where our mouth is.

2. Failure is more than embraced, it's expected.

Amazon writes in the blog that it's a safe space to fail. It's about more than the typical test, fail,
repeat cycle that many companies can claim. The Amazon staffers say if you're testing
something that you know will work, it isn't considered an experiment, and thus you're not
inventing anything.

My experience tells me that for a true spirit-of-invention-enabled-by-failure to succeed, the kinds

of failures that are acceptable have to be spelled out (not all failures are created equal) and they
must be rewarded.

3. Decisions aren't seen as irreversible.

This nuance of the Amazon culture encourages experimentation. If it's agreed in advance that a
failed experiment won't have a negative impact on the customer, it makes inventors more
comfortable proceeding. It's understood at Amazon that it's OK to unwind a decision that was the
wrong one, and to try again with a different decision. When employees feel every experiment is
loaded with implications, they aren't going to experiment as much.

4. Help employees move toward their passions and ideas.

Amazon's efforts to broaden its employees' skill sets. Doing so inherently breeds best-practice
sharing and gives employees the chance to pursue their big idea, even by pursuing a new role.
Granted, few companies are as big as Amazon and have as many opportunities for an employee
to just up and leave their current job to pursue a passion elsewhere within the company. But the
spirit is applicable. It's about thinking of out-of-the-box ways to support employees in pursuing
their innovative ideas.

5. Nurture creativity and we'll foster innovation

We can't have innovation without creativity, and Amazon supports creativity almost as a pursuit
in and of itself. The company has its Expressions Lab, which allows employees to attend
workshops and creative classes; the Spheres, a place to conduct meetings in a botanical setting;
and even the Amazon Symphony Orchestra, an all-employee orchestra that plays community
concerts. Breeding creativity is definitely something you can do at your company, too. It doesn't
have to be on the scale of Amazon. It just needs to be visible and genuine.
6. Invest in tomorrow's innovators.

The companies most dedicated to innovation have a long-term view on the pursuit. In the case of
Amazon, it has its Future Engineer program, which expands computer science education access
for more than 10 million students. The goal is to give more students the chance to be innovators
in health care, arts, education, tech, and more. The investment doesn't even ensure direct benefit
back to Amazon, other than the fact that it feeds the overall culture of innovation Amazon is
building.

AMAZON ORGANIZATIONAL STRUCTURE

Amazon uses the Hierarchical organizational structure. This consists of senior management team
like, but not limited to, senior vice presidents and a worldwide controller that report directly to
CEO Jeff Bezos. The management is divided into seven segments that include, but not limited
to, human resources and legal operations where the heads of segments also report directly
to the CEO. Under the different segments, over 560,000 employees are placed, serving
over 300million customers worldwide. The organization’s structure and culture lean
delicately on its motto, ‘Earth’s Most Customer – Centric Company’ which is visible in all its
operations. They also adopted a ‘two pizza rule’, which states that meetings should be held in
teams small enough that they could all be fed on two pizzas. This makes the organization highly
adaptable to any necessary market adjustments.

Bottlenecks

According to (Collier, 2016), some of the biggest challenges e-commerce businesses will face
are shipping costs, taxation and volatile currency fluctuations. Amazon has independent sites
in Spain, France, Germany, Italy and the UK. Opening independent sites in all EU countries in
which Amazon operates, managed directly by the headquarters in Washington can help the
organization solve the potential bottlenecks listed above. Furthermore, because sellers
provide their own products, and taxes are carried forward to the consumer, this makes adjusting
to post taxation legislation easily adaptable for the organisation.

Narrow Span of Control

The authority at Amazon is well structured, with proper job specialization, a narrow span of
control that allows for clear lines of communication as subordinates know whom to report
to, and whom to get orders from, and the centralized system allows for easy adaptation.
 MICHAEL PORTER’S FIVE FORCES FRAMEWORK

This framework is a method used to assess the level of competition of an organisation within an
industry. Porter, the formulator, first published this theory in the Harvard Business Review
while at Harvard University (Coyne, 1996; Porter, 1979).

Industry Analysis of Amazon

The five forces are threat of substitutes, bargaining power of buyers, threat of new
entrants, competitive rivalry and bargaining power of suppliers. These forces will be used to
analyze Amazon industry analysis.

1. Threat of substitutes

This is a strong force that Amazon faces due to low switching costs as seen with
alternatives like eBay. Second is the high availability of substitutes for example Tesco which
has additional support for physical stores in urgent purchase scenarios. Third is the low cost of
substitutes for example gum tree where customers have option to meet their sellers despite the
higher risks.

2. Bargaining power of buyers

This is a strong force that Amazon faces due to the high availability of quality information all
over the internet gives consumers a bargaining chip hence exposure and ability to find
alternatives. Second is the high availability of substitutes for example Argos where they can get
same day delivery service or pickup in store instantly after online reservation. Price comparisons
can also be made within the two retailers online.

3. Threat of new entrants

This is a weak force due to the high cost of brand development for competitors to grow to a level
where they can pose a threat to Amazon. Second is the high economies of scale that Amazon
benefits from giving it leverage over the competition. This is a minor issue for the organisation.

4. Competitive rivalry

This is a strong force due to the high aggressiveness of the substitutes in terms of marketing and
developing their ecommerce stores. An example is Tesco that has alternatives for physical
stores that pose as a valid substitute to Amazon’s online store.
5. Bargaining power of suppliers

This is a moderate force because of the moderate size of suppliers as seen with sellers using the
platform competing to keep the prices low. Second is the moderate forward integration
which limits suppliers’ actual impact on Amazon.

AMAZON TEAMWORK PRINCIPLES

Amazon founder and CEO Jeff Bezos is notorious for a lot of things; the immense success of his
company is just one of them. His basic leadership and teamwork philosophy has been cited by
many other leaders as key to their success as well—and can be pieced together through reports
and interviews over the years. In truth, it boils down to some fairly straightforward, though not
necessarily easy, principles.

SUPER SIMPLE SUMMARY:

Know where you’re going, and do whatever it takes to get there. That means being willing
to disagree, stand up, and change. Also, don’t waste time or people.

DETAILED EXPLANATION:

Bezos advocates for a relentless focus on long-term success. This means that patience,
adaptability, and a willingness to take a harder road are baked into the few rules he’s strict
about:

 Be stubborn on vision, and flexible on the details. Being firm about where you
want to go is the important part of strategy. Being firm about how you get there, on
the other hand, is unwise.
 Have backbone; disagree and commit. “Leaders are obligated to respectfully
challenge decisions when they disagree, even when doing so is uncomfortable or
exhausting. Leaders have conviction and are tenacious. They do not compromise for
the sake of social cohesion. Once a decision is determined, they commit wholly.”
 The Two Pizza Rule. No working group should be larger than the number of people
that two pizzas can feed. In other words, if your team is larger than 5-7 people,
you’re losing effectiveness. (This speaks to the idea of simple inclusion vs. active
participation. If someone is in a meeting but not doing anything, you’re wasting
 potential—and time. Working groups with too many members very easily fall into
this trap of false inclusion.)

RECOMMENDATIONS – SWOT ANALYSIS OF AMAZON.COM INC.

This SWOT analysis shows that Amazon’s operations can continue expanding, based on the
opportunities in the business environment, as well as the company’s strengths. For example, the
corporation can grow through expansion into new e-commerce markets, especially in high-
growth developing economies. However, the weaknesses and threats identified in this SWOT
analysis require Amazon to consider revising some of its strategies. Still, the business remains
strong and one of the biggest technology firms in the global market. To address the external and
internal factors in this SWOT analysis, it is recommended that Amazon.com Inc. continue
diversifying its business to further strengthen itself against industry-specific risks. Another
recommendation is to develop new partnerships to extend market reach and reinforce Amazon’s
multinational operations against competition and related strategic challenges.

Mapping the reasons for Amazon’s industry leadership and growth is a difficult task. There is
hardly an area of innovation left untapped (often, re-invented) by the company.
Amazon’s mission is to be a “customer focused company”, and this guides any decision made by
the company.  
The company is guided by 4 principles:
 customer obsession rather than competitor focus,
 passion for invention,
 commitment to operational excellence, and
 long-term thinking.
Here is an analysis of some of the elements making Amazon a best in class company. 

1. Loyalty and Pricing.

The Prime membership program offers a variety of benefits, from faster delivery to video and
music content. It is key to Amazon’s sustained growth, due to Prime Members more frequent and
larger purchases.
The Amazon private label further strengthens price-competitiveness.

Innovations
Subscribe and Save and Amazon Pantry offer discount for bulk or repeat purchase. Payment
cards and point system offer additional benefits. “Digital Day”, “Prime Day” are special
members’ events.

2. Supporting decisions.
Almost a given today, Amazon.com was a pioneer in customer reviews, and has improved the
personal recommendation and Q&A system.
Innovations
A “personal stylist” app which helps you decide between two outfits; a 7 day trial period for
apparel

3. Fast and convenient.

As quick delivery is often a barrier in e-commerce, Amazon uses various tools (from algorithms,
through warehousing, to couriers), to deliver products within as little as 1 hour (and mostly, 2
days).
Innovations
While a patent for drone-based delivery is the center of media attention, Amazon is rumored to
be building its own delivery services. An X-Ray service lets customers “see” what’s in their
closed box through the app.

4. Platform-Specific.
Understanding that shoppers have different motivations for each category, Amazon expands
lucrative categories (e.g., grocery, outdoor equipment) in the form of micro-sites. It seems that
the company is starting to create mini-businesses with each operating as a separate entity, for a
focused competitive positioning.
Innovations
Amazon Go, the new Amazon supermarket, and the Whole Foods Market acquisition, stem from
looking at grocery as an independent platform, creating differentiation and competitive
capabilities as would be expected from an entirely separate business.
5. Content as a Service.
Beyond products and services, Amazon sees content as a strong benefit for today’s digital
consumer. This pertains to both production of original content for Prime Video members, and
sales of content, such as through Amazon Music Unlimited. Amazon Devices such as Fire TV,
Echo etc., support streaming of content.
Innovations
Prime Reading is an unlimited reading portfolio for U.S. Prime members. Audible, acquired by
Amazon, ventured the company into the growing audiobook arena. With Alexa (Amazon Echo’s
AI), content is delivered ever more seamlessly.

6. Omni-Channel.
Orders made through Dash Buttons, a physical connected button enabling the online order of
everyday goods (an IoT platform), increased over 5x during 2016. Dash Buttons expanded
beyond the US to Austria, Germany, and the UK.
Innovations
Amazon Echo (Alexa), the company’s AI platform, allows a seamless shopping experience,
beyond the company’s variety.
The brick and mortar Amazon Go and Amazon Bookshop, which are digital at core, are a
demonstration of anywhere-anyhow shopping.

7. Curation and specialty items.

The company offers variety that is a mixture between leading supplier products, and small
artisanal manufacturers. In both cases, the company offers some products that cannot be
purchased elsewhere.
Innovations
Amazon Surprise is an example for how the company acts as a direct-to-consumer platform for
small, artisan brands, “curated” by Amazon. It operates through a “Surprise” dash button, to
encourage impulse confectionery purchase.
With its private label and growing service offering, Amazon is an ever-growing threat to
manufacturers, not only to retailers. But at the same time, it provides a ground-breaking curation
and distribution platform where small suppliers can grow – and as such, the opportunities that
Amazon offers are greater than the threat it creates for product and service providers.

AMAZON.COM INC. PESTEL/PESTLE ANALYSIS

Amazon.com Inc.’s performance relates to the issues shown in this PESTEL/PESTLE analysis of
the business and its remote or macro-environment. The PESTEL/PESTLE analysis model is a
strategic management tool for identifying the external factors (political, economic,
social/sociocultural, technological, ecological/environmental, and legal) that shape the conditions
of the remote or macro-environment, which in this case is that of the e-commerce enterprise.
Other markets or segments included in this external analysis of Amazon are cloud computing
services, consumer electronics, and retail. As one of the largest players in the global market for
information technologies and related online services, the company enjoys the benefits of
extensive market reach, high capitalization, and high popularity. However, the online market is
 dynamic and continually presents new challenges for Amazon. Through tools like the
PESTEL/PESTLE analysis model, the company’s decision makers can identify the most
significant opportunities and threats based on external factors in the remote or macro-
environment of the business.

Political Factors Affecting Amazon’s Technology and Services Business

Amazon.com Inc. operates alongside political influence. This aspect of the PESTEL/PESTLE
analysis model focuses on governmental activity and its effects on businesses and their remote or
macro-environment. In Amazon’s case, the following political external factors are important in
the development of the e-commerce industry:

1. Political stability of developed countries, especially the U.S.A. and European countries
(opportunity)
2. Governmental support for e-commerce (opportunity & threat)
3. Increasing governmental efforts on cyber-security (opportunity)

Economic Factors Important to Amazon.com Inc.

Amazon’s performance depends on the situation of the economies where it operates its online
and non-online businesses. The effects of economic trends and changes on the remote or macro-
environment are considered in this aspect of the PESTEL/PESTLE analysis model. In the case of
Amazon.com Inc., the following economic external factors are significant:

1. Economic stability of developed markets, especially the U.S. and European countries
(opportunity)
2. Increasing disposable incomes in developing countries (opportunity)
3. Potential economic recession of China (threat).

Social/Socio cultural Factors Influencing Amazon

Social conditions are a determinant of Amazon.com Inc. This aspect of the PESTEL/PESTLE
analysis model identifies the impact of socio cultural changes or trends on the company’s
performance as a leading online retailer and provider of information technology goods and
services. Considering such trends in the remote or macro-environment, Amazon faces the
following socio cultural external factors:

1. Increasing wealth disparity (threat)

2. Increasing consumerism in developing countries (opportunity)
3. Increasing online buying habits (opportunity)

Technological Factors in Amazon’s Business

Technological advancement directly affects Amazon, considering the centrality of technology in

its business. The consequences of technologies and related trends on the remote or macro-
 environment are covered in this aspect of the PESTEL/PESTLE analysis of the e-commerce
company. The technological external factors important in Amazon.com Inc.’s business are as
follows:

1. Rapid technological obsolescence (threat & opportunity)

2. Increasing efficiencies of IT resources (opportunity)
3. Increasing rates of cybercrime (threat)

Ecological/Environmental Factors

Even though Amazon.com Inc. is mainly an online business, its operations are subject to the
influence of the natural environment. This aspect of the PESTEL/PESTLE analysis model
presents how the company’s remote or macro-environment relates with ecological changes.
Amazon considers the following ecological external factors in its strategic formulation:

1. Rising interest in environmental programs (opportunity)

2. Rising emphasis on business sustainability (opportunity)
3. Increasing popularity of low-carbon lifestyles (opportunity)

Legal Factors

Amazon.com Inc.’s e-commerce operations must adhere to legal requirements. The effects of
regulations on the remote or macro-environment are determined in this aspect of the
PESTEL/PESTLE analysis model. In Amazon’s case, the following legal external factors are
significant:

1. Rising product regulation (opportunity)

2. Changing import and export regulations (opportunity)
3. Rising environmental protection regulations on businesses (opportunity).