Macroenvironment

Analysis of

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Presentation Content
1. Introduction to AMAZON

2. Macroenvironment

3. Importance of each Macroenvironment elements and

Comparision (US versus China)

4. Effects of macroenvironment to recent launchs

(Whole Foods Market)

5. Evaluation
 1.
INTRODUCTION
TO AMAZON
About AMAZON
A BRI E F B A C K GR OUND

Founded in July, 1994 by Jeff Bezos and

based in Seattle, Washington.

An American multinational technology

company.

One of the Big Five companies in the U.S.

information technology industry.

 About AMAZON
WHO T HEY A R E?

Amazon strives to be Earth’s most customer-centric company, Earth’s

best employer, and Earth’s safest place to work.

Guided by four principles:

Customer obsession rather than competitor focus
Passion for invention
Commitment to operational excellence
Long-term thinking
Pionner things by AMAZON

1-Click shopping Customer Amazon Studios Virtual Assitant

reviews
About AMAZON
WHA T T HEY DO?

Amazon Store

Delivery and Logistics

Devices and Services

Amazon Web Services

Entertainment
About AMAZON
IN COVID - 19 PANDEMIC
Provided more than $2.5 billion in bonuses and
incentives for our teams globally in 2020.
Established a $25 million relief fund for partners,
such as delivery drivers, and seasonal associates
facing financial hardship
Amazon is vigorously combating price gouging to
ensure fair pricing and fight entities seeking to
profit off the COVID-19 crisis.
2.
Macroenvironment
2.1.
DEMOGRAPHIC
FACTORS
Population and Gender

Household income

Education

Marital status
2.1. Demogarphic
factors
Population and Gender
Population: According to data from the US Census Bureau,
millennials (born 1981-1996) made up the largest population
group in the US in 2021, followed by baby boomers (1946-
1964), Gen Z (1997-2012), and Gen X (1965-1980),
respectively.
Gender: In the US, the resident population was estimated to
be around 330 million in 2020. In terms of population size,
the sex ratio in the United States favors females. Females
outnumbered males in the majority of states across the
country in 2018, and there were only ten states where the
gender ratio favored men.
2.1. Demogarphic
factors
Household income

Median household income was $67,521 in 2020, a

decrease of 2.9 percent from 2019. This is the first
statistically significant decline in median household
income since 2011.
2.1. Demogarphic
factors
Education
In 2020, about 37.5 percent of the U.S. population
who were aged 25 and above had graduated from
college or another higher education institution.

Moreover, Women have made great strides in

education. 2018 data shows that women outstrip
men in terms of educational attainment at all levels.
2.1. Demogarphic
factors
Marital status
In 2020, there were 68.43 million married men and
69.34 married women living in the United States

Some of the major factors behind the long-term

decline in the marriage rate have been female
education and labor force participation, women’s
economic independence and gender equality.
2.2.
POLITICAL
FACTORS
Fair political system

War on terror policies

Foreign Direct Investment

2.2. Political
factors
Fair political system
The USA is the second largest democracy in the world.
The president is the head of the country and is elected
for a four-year term. Elections held in the USA are
usually considered fair and transparent. The country
enjoys a stable political climate

It also has an enormous influence over the political

dynamics of many countries around the world.
2.2. Political
factors
War on terror policies
Many political critics claim that the 9/11 attacks have
provided the USA an excuse to attack any country
under the disguise of national security measures. The
war on terror policies has led the country into many
wars and interventions in other countries.
2.2. Political
factors
Foreign Direct Investment

The USA advocates and promotes democracy around

the world. With a stable political environment,
advanced infrastructure, and technology, the USA
positions itself as a great destination for foreign direct
investment
2.3.
ECONOMIC
FACTORS
Stable economy

Economic recession

Labor
2.3. Economic factors
Stable economy
The USA has the world’s largest and most stable and powerful
economy.

The economic system is well-developed and gathers its

strength from its services and manufacturing industries.

Some of the top exports of the USA are refined petroleum,

crude petroleum, cars, integrated circuits, and vehicle parts

Its top imports are computers, crude petroleum, broadcasting

equipment, and packaged medications
2.3. Demogarphic
factors
Economic recession
The pandemic of covid-19 has shut down all the businesses
worldwide

The USA has the advantage of global in-house tech companies. They
contribute a major portion to the country’s economy.

The pandemic of covid-19 is harming the world’s economy. The

pandemic would leave the world with millions of unemployed people.
2.3. Demogarphic
factors
Labor
Labor is not cheap in the USA, particularly when
compared to that in China, India, and Mexico.
Availability of cheap labor has encouraged many US
firms to outsource many of their business activities
around the world. However, this has angered many
Americans.
2.4.
TECHNOLOGICAL
FACTOR
Technological leader

Adapting technology
2.4. Technological
factor
Technological leader
The USA is the global leader in science and
technology. Americans have a longstanding
fascination for technology, and companies such as
Apple, Amazon, Microsoft, Google, Facebook

Additionally, the US has also been at the forefront in

enhancing and developing technologies in areas such
as nanotechnology, environmental technology and
biotechnology,
2.4. Technological
factor
Adapting technology
The American people have also got a flexible
attitude towards technology. They accept and
adapt the latest technology and apply it in
different fields.

Most importantly, technology has created many

job opportunities and reduced production costs.
 3.
Importance of each
Macroenvironment
elements and
Comparision
 3.1 THE IMPORTANCE OF
MACROENVIRONMENT ELEMENTS
Demographic
Useful for Amazon to understand
how to market to consumers and
plan strategically for future trends in
consumer demand.
Use to craft consumer personas,
create targeted ads, and funnel
traffic to external platforms.
Political
The range of political factors that
affect Amazon include but are not
limited to the political stability or
instability in the country
The freedom of press, trade unions
and their activities and the extent of
corruption belong to the list of
political factors with potential
implications on Amazon business
practices
 3.1 THE IMPORTANCE OF
MACROENVIRONMENT ELEMENTS
Economics
There are a whole host of economic
factors such as taxation and inflation
rates, overall and industry-specific
economic growth, unemployment
levels and changes in currency
exchange rates that directly affect
the volume of revenues and growth
prospects of Amazon.
Political
Used to improve processes and
assist Amazon doing their daily role,
ranging from random stow and pick
through to box sizing algorithms,
software that determines the
shortest, most efficient walking
route from one place to another
 3.2 Comparision

U.S. CHINA
 3.2 Comparision
Demographic
COUNTRY
The current population: 333,955,957 (January 10, 2022)
Density: 36 per Km2 (94 people per mi2).
The total land area is 9,147,420 Km2 (3,531,837 sq. miles)
The median age: 38.3 years.
AMAZON
The number of Amazon Prime members in the United States
is projected to reach more than 153 million users in 2022, up
from 142.5 million in 2020.
81% of US adults between the ages of 18 and 34 were
Amazon Prime members.
=> Amazon in U.S sells mainly products for young people such as
Copyright Videos, Music, Android Appstore, Kindle Books &
eBooks ,...
COUNTRY
The current population: 1,447,781,510 (January 10, 2022).
Density in China is 153 per Km2 (397 people per mi2).
The total land area is 9,388,211 Km2 (3,624,807 sq. miles)
The median age: 38.4 years.
AMAZON
Sellers based in China represented 47 percent of new sellers
in January 2020 and 41 percent of new sellers in January
2019.
About percent of the top sellers on Amazon were based in
China
=> China has a large population, a higher population density
than the US, suitable for the development of the Amazon
market.
 3.2 Comparision
Demographic

=> Amazon may utilize demographic data to better understand how to sell to
consumers and plan strategically for future consumer demand trends.
 3.2 Comparision
Political
Political stability of developed countries
Governmental support for e-commerce
Increasing governmental efforts on cyber-security
The ruling government usually has a certain stance towards
the e-commerce giant
Criticism by US President Donald Trump
=> Amazon has devised measures to reduce the risk as well as
develop the company's opportunities and strengths
Amazon debuted a public website in 2019
Expand its brick-and-mortar operations in the United States
to complement its e-commerce business.
The lack of political freedom is a major concern.
Maintains good diplomatic relations with many great powers
in world trade and politics.
Relationship with the United States has been very challenging
for a long time.
=> Because of the above influencing factors, the development of
the amazon market is quite difficult in China
Amazon entered the Chinese market in 2004 through a deal
to acquire Joyo, which was very successful in its early days
but in 2019, it share plummeted to less than 1% - down from
15% in 2011.
 3.2 Comparision
Political

=> Political considerations that impact Amazon include, but are not limited to,
the country's political stability or volatility, the influence of domestic market
lobbying and pressure organizations, and the government's stance toward e-
commerce and retail in particular.
 3.2 Comparision
Economics

The global economic landscape is changing very rapidly
which is a challenge for the USA
The global lockdowns in 2020/21 caused havoc to the US
economy
Labour is not cheap in the USA, particularly when compared
to that in China, India, and Mexico.
The potential economic recession of China threatens
Amazon’s business
China positions itself as a great destination for foreign direct
investment (FDI).
Global name for its manufacturing power
The standard corporate income tax rate

=> This factor affects the development direction of amazon in => Because China is a potential market, Amazon has to compete
many aspects: fiercely with other companies such as eBay, Wish, Shopee and
Amazon's revenue from U.S. consumers' web purchases Alibaba.
amounted to 30.7% of online retail sales in the first quarter
of 2021.
In 2020, Amazon employed approximately 1.3 million
employees worldwide. The company also added 400,000
jobs.
For 2020, Amazon's effective income tax rate was 9.4%—
versus the 21% statutory corporate tax rate.
 3.2 Comparision
Economics

=> Taxation and inflation rates, general and industry-specific economic

growth, unemployment rates, and changes in currency exchange rates are all
economic factors that have a direct impact on Amazon's revenue volume and
growth possibilities.
 3.2 Comparision
Technological

Rapid technological obsolescence
Increasing efficiencies of IT resources
Increasing rates of cybercrime
=> The company knows how to use the potential of technology
in the US into its product business model.
For instance, new computing technologies can maximize online
retail productivity and minimize operational costs.
The world’s largest online population with over 854 million
users
The development of the B2C industry does not have a safe
and stable online payment system.
How to accommodate the tech industry and giant tech
companies into its socialist market economy.
=> Amazon is still facing many difficulties in China because
technology is now very developed and the company has to face
many other big competitors.

There are many people who take advantage of the development

of technology to profit from amazon
 3.2 Comparision
Technological

=> By applying modern technology techniques, Amazon is able to increase the quality of
products, reduce downtime and increase security, and thereby increase revenue,
productivity and growth of the company.
4.
Effects of
macroenvironment to
recent launchs
(WHOLE FOODS MARKET)
4.1. Overview about
Whole Foods Market
Whole Foods Market is one of the subsidiaries of Amazon.
Whole Foods Market Inc. is an American chain supermarket
that sells products that are free of hydrogenated fats and
artificial colors, flavors, preservatives and sweeteners.

Whole Foods has 500 stores in North America and in the UK as

of March 4, 2019.
 4.2 MACROENVIRONMENT IMPACTS
ON WHOLE FOODS MARKET
Political factors

In Whole Foods Market’s case, the following are the most significant political external
factors in the remote/macro-environment:
Regulations on organic and GMO food
Free trade agreements
Low labor standards in developing countries
Whole Foods Market has the opportunity to further improve its standards to ensure
proper labeling of organic and GMO-free products.
 4.2 MACROENVIRONMENT IMPACTS
ON WHOLE FOODS MARKET
Economic factors

The impacts of economic conditions are determined:

Economic stability (opportunity)
Higher employment rate in the U.S. (opportunity)
Rising labor costs in developing countries (threat)
Whole Foods Market has the opportunity to grow based on the economic stability and
gradually rising employment rate in the U.S
Amazon is buckling under unprecedented COVID-19 supply-and-demand disruptions.
 4.2 MACROENVIRONMENT IMPACTS
ON WHOLE FOODS MARKET
Demographic factors

The target customers for Whole Foods Market are individuals and families:
The average Amazon user is 37 years old.
The average Amazon buyer has an annual household income of $84,449
During the COVID-19 pandemic, Amazon experienced an uptick in subscriptions for
the Prime program.
 4.2 MACROENVIRONMENT IMPACTS
ON WHOLE FOODS MARKET
Technology factors

The effects of technology or technological changes are presented:

Increasing automation in business (opportunity)
Increasing mobile technology usage (opportunity)
Patenting of GMOs (threat & opportunity)
Whole Foods Market has the opportunity to implement more automation technologies
 ​A ma z o n d e b u t e d a p u b l i c we b s i t e
4.3 on Thursday outlining the e-
c o mme r c e g i a n t ' s v i e ws
Some solutions
AMAZON deal
with Amazon’s current policy for
sponsored products states that
macroeconomic “Content

factors
Whole Foods is fighting for the
right to maintain a workplace
4.3 investing in innovation

Some solutions
AMAZON deal Job creation

with
Amazon Brand Analytics,
macroeconomic including the customer
demographics report
factors
Unlocking free customer
demographics information
addresses

Shopping innovation
5.
Evaluation
A MA Z O N M A R K E T I N G M I X ( 4 P S )
ANALYSIS
5.1 AMAZON.COM INC.’S PRODUCTS
(PRODUCT MIX)

Amazon websites

Electronic devices

Media content

Amazon Web Services (AWS)

5.2 PRICE ELEMENT IN AMAZON
MARKETING MIX

Market-oriented pricing strategy

Price discrimination strategy

Value-based pricing strategy

5.3 AMAZON’S PROMOTION
(PROMOTIONAL MIX)

Aggressive marketing campaigns

SEO and targeting customers

through their browsing patterns

Affiliate programs

Sales promotion
 5.4 CONCLUSION

The worldwide marketplace is evolving rapidly and intensely competitive,

Amazon keeps facing a broad array of competitions from many different
industry sectors from around the world. However, Amazon is a highly
strategic company, and it has been since its inception. It will continue to use
its customer-centric philosophy as a compass in the future.
 5.5 STRENGTHS AND WEAKNESSES
Strengths
Prime membership:
100 million people in the United States have
an Amazon Prime account
spend double the amount of non-prime
members on Amazon
Worldwide recognition:
Amazon now has 31% of the market share in
Germany and 47% market share in the UK.
Logistics:
Amazon has a logistics system that is far
superior compared to other global retailers,
Weaknesses
Fragmentation:
Amazon is an “everything” company.
limits the company’s ability to focus on one
strategic goal.
Not brand friendly
Amazon has traditionally done poorly in these
categories where brand is important, such as
fashion and home goods
Limited brick-and-mortar presence
Data and online privacy - Legislation and
regulations
 Employing an end-to-end
supply chain

Combined with return-

conscious pricing

Focusing on 1 specific goal -

evaluate brand image

5.6 Debate over what is private

Recommendation data versus what is public

data
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