Strategic Analysis Report of Amazon: PESTEL and Porter Five Forces Analysis

STRATEGIC
ANALYSIS REPORT

Table of Contents
INTRODUCTION...........................................................................................................................3
Amazon’s Background.................................................................................................................3
EXTERNAL ANALYSIS................................................................................................................3
PESTEL ANALYSIS..................................................................................................................3
PORTER FIVE FORCES............................................................................................................5
INTERNAL ANALYSIS.................................................................................................................7
RESOURCES..............................................................................................................................7
COMPETENCES.........................................................................................................................7
STRATEGY EVALUATION........................................................................................................10
SUITABILITY...........................................................................................................................11
ACCEPTABILITY....................................................................................................................12
FEASIBILITY...........................................................................................................................12
CONCLUSION..............................................................................................................................13
SUMMARY...................................................................................................................................13
REFLECTIVE ACCOUNT ..........................................................................................................14
REFERENCES..............................................................................................................................16

INTRODUCTION
This project report will assess corporate strategy of Amazon. The external factors will be
identified with the help of Pestel analysis for understanding macro factors and Porter five forces
framework will be applied for understanding industry effectiveness. The report will also identify
internal factors with the help of value chain and VRIO framework. Lastly, the report will define
the SAFe technique which will be implemented in order to identify the viability.
Amazon’s Background
Amazon is an American multinational technology company which is operating in cloud
computing, e-commerce, artificial intelligence, consumer electronics, entertainment, digital
distribution, self-driving cars and retail industry. The company was founded by Jeff Bezos in the
year 1994 and is currently operating worldwide. The company is operating as world's largest
online marketplace and offers a wide variety of products and services that can be availed by
customers.
EXTERNAL ANALYSIS
PESTEL ANALYSIS
Political factor (threat)- Political factors for E-Commerce business and technological
industry can create a threats, as there are various giant companies which are already operating in
the industry such as eBay and Amazon (Abushova, Burova and Suloeva, 2016). The political
factors such as political and regulatory factors create an incline in the challenge which will be
faced by e-commerce business. As the growth rate of e-commerce in Europe is low, this has been
a threat for companies operating in the same industry. Political stability in different regions of
the world derived economic stability whereas, political issues create a challenge for E-
Commerce business to effectively and smoothly operate in the industry. Political issues have led
to disruption of business at online and physical level and influenced the growth of e-commerce
business which majorly acted as a threat for companies.
Economic factor (opportunity)- Economic factors create huge impact on the term of
business and such factors directly linked with business which influence the revenues and profits
of companies operating in e-commerce industry (Balasubramanian, Bhattacharya and Krishnan,
2015). Due to economic recession, this has affected and lead to fluctuation in economic stability

of such industry at local and global level whereas after recession the economic activity returned
to track which strengthened the E-Commerce industry and let to higher economic activities
which resulted into generation of higher revenues, increased business growth and progress
towards success in the economic industry which has been proven as an opportunity for
companies which are operating in e-commerce industry.
Social factor (opportunity)- Socio cultural factors create a significant impact on E-
Commerce industry. For E-Commerce business, it is an opportunity for business expansion and
growth in local markets where the changing trends and demands of customers can influence the
managerial operation (Clarkson, 2019). The incline in use of technology and mobile technology
has also influenced E-Commerce industry as this has been a popular and easiest approach in
nowadays which is the era of digitalization and created opportunities which resulted in incline of
sale and higher revenue generation for business.
Technological factor (opportunity)- The technological factors play a crucial role in
relation to E-Commerce industry, as this industry majorly relies on technology. All the
managerial activities and operations of an E-Commerce industry from sales to customer service
is done with the help of technology which helps to business in managing successful growth. The
factors create an opportunity for business operating in e-commerce industry to face challenges,
competition and maintain their position in the industry.
Environmental factor (opportunity)- Environmental factors also plays a significant role
in relation to E-Commerce industry. Such factors majorly focus on sustainability and
accountability towards the environment as the direct environmental impact on the E-Commerce
industry is low which reduces the threats for organizations operating in this industry. By
investing in sustainability, this can be highly productive for companies operating in e-commerce
industry as sustainable packaging will be helpful approach for minimizing waste reduction and
encouraging the use of renewable energy which will be a positive step towards the environment
(Cusson, 2017). Such external environment factors influence organizations operating in e-
commerce industry to opt for renewable energy which will help in making optimum utilization of
all resources and ensuring the stability of business and sustainability of environment. Such
factors have acted as an opportunity for business to contribute in betterment of the environment
and follow such practices that can enhance environmental sustainability.