Amazon And Its Environment

Introduction
This report helps in understanding about importance of external and
internal factors over productivity and profitability of an organization.
This report helps in understanding about different aspects of external
and internal environment which could affect organization. External
factors cannot be controlled by an organization but in case of
internal factors organization can control its impact on organisation. It
is important for organisation to understand importance of impact of
these factors as it can lead organization towards its desired goals and
objectives. This report is based on Amazon which is an leading E-
commerce organization based in Seattle which is in US.
Amazon And Its Environment
External Environment
External factors are considered as factors which cannot be controlled by
organization and also business decisions are also affected by such factors.
External factors have greater impact on organization productivity and
profitability. Internal factors of organization basically includes strengths and
weaknesses of employees of organization and factors which can influence
outcome of organization. Internal factors of organization can be controlled and
impact which these factors made on outcome of organization can also be
controlled by managers. In order to understand internal and external factors of
organization SWOT and PESTLE analysis of Amazon is mentioned below:
PESTLE Analysis
This framework is utilized by organization in order to understand
external factors of business environment and how such factors can affect
organization performance. PESTLE analysis of Amazon is mentioned below:
Political Factor
Political factor is explained as government intervention in an economy
and stability of government in business environment. Amazon have to understand
stability of government in different countries and according to that develop their
strategies. Political factors plays vital role in formulation of goals and objectives of
an organization.
Economic Factor
Economic factors are explained as factors which have direct impact on
economy of nation. Such factors help organization in understanding their
profitability and productivity. Amazon have made higher profits amid COVID-
19 pandemic and it helped them in expanding their consumer base and also
contributed in boosting their profits.
Social Factor
Social factors help organization in understanding about culture, beliefs,
value and attitude of people which belongs to a society. Amazon focuses on
delivering its products to consumers effectively and focuses on utilizing
How the company impact its context External Environment
Amazon focuses on adapting to its external environment by
understanding changes and impact of external factors on business.
Amazon operates in different countries and with changing
environment there is change in impact of factors of organization. It
is important for Amazon to effectively analyses external factors
and form plan according to need.
CONCLUSION
This report concludes about internal and external factors
impact on organization and how these factors influence
performance of organization. This report concludes about
organization Amazon and different techniques utilized by
organization to effectively compete in business environment.
Internal Factors
SWOT analysis
Amazon is considered as global leader in retail business and
this analysis would help managers of Amazon in understanding need
of changes.
Strengths - Amazon global competitive edge help them in focusing
on resources and achieving their goals by effective strategies.
Amazon focuses on using cost leadership and differentiation strategy.
Such strategy helped them in boosting their revenues and also help
in achieving its goals and objectives.
Another strength of Amazon is that organization is famous among
global consumers which have made contributed in increasing their
market share.
Weaknesses - Amazon focuses on providing free delivery service to
its consumers which can affect their profits and might have negative
impact on their overall revenues it could lead to increase in their
overall cost.
Amazon is considered as leading online retailer but their strategy of
focusing on only retail sector can affect their strategy of expansion.
Opportunities - By making its payment system more flexible Amazon
have the opportunity to reach out higher number of consumers and
by providing more number of payment options it is easy for
consumer to pay for their products.
Amazon have the opportunity to expand its business by reaching out
to more number of consumers and expanding its business in different
sectors.
References
Bentz, C., 2018. 6. Explanatory Factors: Language “External”
Effects. In Adaptive Languages (pp. 111-120). De Gruyter Mouton.
Nurrahmat, M. H. and Sunindyo, W. D., 2019, July. Determining
External Factors Analysis Summary (EFAS) Metric for Company
Technological factor
Such factors focuses on technological innovation in
business environment and how such technological changes can
affect organization productivity and profitability. Amazon have
utilized digital technology as their major weapon and organization
have invested effectively in making their delivery services better
and efficient. Amazon also focuses on utilizing technology to make
their payments system effective and efficient.
Legal Factors
Legal factors help organization in understanding rules and
regulation which should be followed by organization before
conducting its business. Amazon had to deal with various legal
challenges as there are different law and policies in different
business environment.
Environmental Factors
Environmental factors are concerned with protection of
environment it focuses on environment friendly practices which
should be utilized by an organization while doing its business.
Amazon focuses on reducing greenhouse gas emission by using
environment friendly practices.
Threats - One of the threats to Amazon is regarding personal information
of its consumers as individuals which make online payment have fear of
being victim of identity theft and hacking which can leave their personal
information exposed to others.
Amazon faces competition from domestic retailers which are considered
more flexible and organization have to understand local market condition
carefully and develop their strategy according to their need.