Business Contexts and its Management

This report covers the analysis of external and internal environment of Amazon UK. It includes the analysis of e-commerce industry trends, stakeholder analysis, operational management, and managing changes. The report also provides strategic recommendations using PDCA cycle.

Business Contexts and its
Management

Table of Contents
INTRODUCTION...........................................................................................................................3
PART A...........................................................................................................................................3
(a) Analysis of External Environment.........................................................................................3
(b) Analysis of Internal environment...........................................................................................6
(c) operational management.........................................................................................................8
(d) Managing Changes.................................................................................................................9
(e) Stakeholder Analysis............................................................................................................10
part 2 .............................................................................................................................................10
presenting client report .............................................................................................................10
Conclusion ....................................................................................................................................11
REFERENCES................................................................................................................................1

INTRODUCTION
Understanding business context and its management is crucial for the company in the
present time in order to succeed (Kiba-Janiak and et.al., 2021). The present report will cover the
industry trend analysis of e-commerce industry and Amazon UK plc. For this various internal,
external, operational and change management theories will be used. The report will also cover
the stakeholder analysis of Amazon UK using Edward Freeman Stakeholder theory. Lastly, this
will also cover the client report which will cover the analysis conclusion as well as strategic
recommendation using PDCA cycle.
PART A
(a) Analysis of External Environment
Revenue Growth Statistics:
Figure 1: Graphical presentation of Amazon UK annual sales from 2010 to 2021
Business cycle model: There are five stages in business cycle model. The five phase of
business cycle:

Launch: This is the first phase where each company begins or start its business in a
particular industry. For example, Amazon UK in their initial stage focus on their marketing tactic
in order to launch its business in UK.
Growth: This is the first stage of business cycle which indicate the positive economic
indicators. In this stage, the business usually expands and grow because of high demand of its
goods, low unemployment rate, timely payment from debtors etc. For example, Amazon UK is
currently at their growth stage because of its technologic innovation and online shopping
channel.
Shake-out: This is the phase of business cycle where the company sales increase but at a
slower rate. For example, Amazon UK has fall under this phase at the time of Covid-19 where
their online sales increase but at lower rate (Amaral and et.al., 2022).
Maturity: This is the fourth stage of business cycle where business sales slowly start
declining after attaining maturity stage. For example, Amazon Plc reinvest in the technology at
the time when it reaches mature stage in order to stop its sales from declining.

Decline: This is the last stage of business cycles where the decline in sales of business
result into the inability of business to adapt changing business environment. For example,
Amazon UK has not fall under this phase of business cycle in their lifetime.
Industry sector analysis- PEST analysis: The external analysis of e-commerce industry in UK
using PEST model is as follows:
Political: The change in the taxation policy and strict safety regulation is a political factor which
create threat for the e-commerce industry to function smoothly in UK market. Brexit has affected
the e-commerce industry and Amazon UK very badly.
Economical: Due to Covid-19, the reduction in the income of consumer has change their
spending patter which is an opportunity for e-commerce industry and Amazon company in UK
as they provide best quality product at low price to customer doorstep. The market size of
Amazon UK is 30% of UK e-commerce market (Phan, 2021).
Socio-culture: The change in consumer taste and preference towards healthy product after
pandemic has also created opportunity for e-commerce industry as well as Amazon plc to
provide the healthy products to meet customer demand.

Technological: The continuous change in technological innovation is an opportunity for the e-
commerce industry to contribute more towards growth of economy and for Amazon UK to
further expand in various area of UK (Phan, 2021).
Identification of three trends in the external environment: On the basis of above analysis of
ecommerce industry, it is identified that the three trends in the external environment of UK e-
commerce industry which help the Amazon UK to gain competitive advantage is as follows:
 Trend 1: Technological innovation is the first trend in the e-commerce industry which
create opportunity for the businesses such as Amazon UK.
 Trend 2: Change in customer preference to healthy food and online shopping is also one
of the trends that have created growth opportunity for Amazon UK
 Trend 3: Lastly, it is identified that the change in consumer pattern due to economic
change in the UK environment has affected e-commerce industry and Amazon UK (Kiba-
Janiak and et.al., 2021).
(b) Analysis of Internal environment
The analysis of Amazon UK external environment using the following model:
McKinsey 7s: The internal environment of Amazon UK as per Mc Kinsey 7s model is as
follows:
 Strategy: The strategy of Amazon UK is cost leadership which is basically a main pillar
of company. The company provides various products at low cost to its customers.

 Structure: The structure follow by Amazon UK is hierarchical where each employee has
one supervisor who guide them and motivate them towards their work.
 System: The system of Amazon UK includes employee recruitment & selection system,
customer relationship system, team development & orientation system etc. in order to
became successful (Pospisil and Zavodna, 2022).
 Share values: The objective of Amazon UK is to became largest e-commerce brand in
the UK and enhance motivational as well as organizational commitment towards
environment protection.
 Staff: The total number of employee work in the UK branch of Amazon Plc is 229000 as
per 2021 annual report. They work for the success of the organization as well as their
own personal development.
 Style: The collaborative management style is followed by Amazon UK in order to keep
the employee engaged in the decision-making process.
 Skills: The employee working in Amazon UK are highly expertise and skilled. Further, to
enhance their skills, the company management provide training to its employee.
VRIO Framework:
Resources Valuable Rare Inimitable Organizationall
y exploitable
Global presence ✔ ✔ ✔ ✔
Relationship with supplier ✔ ✔ ✔
Innovative sales mix ✔ ✔
Large customer base ✔ ✔ ✔
Brand name ✔ ✔ ✔ ✔
Simplicity of operation ✔ ✔ ✔
Location and nature of
properties
✔ ✔ ✔
High skilled management ✔ ✔
On the basis of above analysis of Amazon UK internal environment, it is identified that
global presence, relationship with supplier, brand name, large customer base and simplicity of

operation are the competitive advantage of Amazon UK. This are the area with the help of which
the company able to exit and gain competitive advantage in UK e-commerce sector in less time.
They are the main reason towards the success of business (Ariwibowo, Saputro and Haryanto,
2021). Further, the company need to improve its management and innovative sales mix in order
to further grow its e-commerce business in UK.
(c) operational management
The amazon used various operation management tool in order to improve the quality of the
product and services in effective as well as efficient manner which are mentioned as follows:
TQM: in order to improve the quality of the product and services the organization determine the
area of improvement. In order to improve the quality of the product the Amazon involve the
employees in the process of decision making as every individual person has different skills and
knowledge to handle the issues in adequate manner. It deliver assistance in satisfying the
customers in an appropriate manner (Akimov, and et.al 2021) . Furthermore the organization
provide training and development programme to the workers of the association.
Kaizen: it is one of the another important tool which the company used as the plans of action
for the continuous improvement in the operation of the organization. It is indicate that for the
welfare of the organization it is important to bring the changes within the operation of the
company. In order to bring the changes the amazon reduces the waste or avoid the resources
which are not essential for the association. Moreover for the improvement the association Kee
empowering the employees of the organisation by offering various facilities which includes
bonuses, rewards and power to form the strategy. With the assistance of that the organization
keep influencing the workers to accomplish the goal and deliver the values in domestic as well
as international marketplace (Zhao, Yu, Shakeel,. and Montenegro-Marin, 2021) .
Six sigma: the amazon used this plans of action for offering the quality product to the consumer
and attract the consumer toward the productivity of the organisation. the Amazon determine the
issues or the improvement which is required in the organization. For improving the productivity
of the organization the company define the changes to the employees regarding the needs and

requirement of the consumer. Along with that the organization collect information and data from
the people. furthermore the association analysed whole data in order to improve. Before
implementing the plan the organization conduct test and determine that the choosable plan of
action is suitable for the business or not (Fahrurrozi, and et.al 2020). Furthermore the
organization control the activity of the organization in order to make sure that the is increasing
the demand and value of the company or not. Due to that the company is able to increase the
brand value in the marketplace and attract the customer toward the production. With the
assistance of that the association keep delivering stratification to the workers of association.
(d) Managing Changes
The impact of change over the business is high in the present world as it also affects the
people working within the business. The change affects the whole business operation and create
competitive threat for Amazon UK. Hence, it is important for the management of Amazon UK
that they should apply appropriate strategy in order to update the internal system of business as
well as restructure its organization in order to consider the change. As per Kurt Lewis theory of
change, it is important for the people to unfreeze the old pattern of organization, move to new
level and refreeze in order to establish the change within Amazon UK business. This three-stage
change model of Lewis such as unfreezing, change and refreezing within their business.
However, before implementing change within the business, it is important for Amazon UK
business that they get prior knowledge on it (Shrivastava and et.al., 2022).
As per Kubler Ross change curve, basically state the inner change that a company or its
employee experience when coping with transition and change. This theory state that change is
constant in business life and thus it is important for Amazon UK company to adopt those
changes within the business in order to gain competitive advantage in th e-commerce market.
The management of change is possible with the proper training and development to the
employees of the organization. As per this theory, the morale of employee changes over the
period of time such as shock, denial, depression, frustration, experiment, decision and integration
(Ray and Shklarski, 2021). Hence, it is important for the company management such as Amazon
UK management that they should conduct one to one session with its employee to listen and
solve their problem after Covid-19. This is one of the ways to manage change and reduce the
negative impact of change over business.

(e) Stakeholder Analysis
As per above stakeholder mapping, the stakeholder analysis of Amazon UK that operates in e-
commerce sector are as follows:
 Keep Satisfied: They are the stakeholder of company interest in company is low but
power is high. For example, customer of Amazon Plc whose power is high but interest is
low thus the company should keep them satisfied.
 Manage closely: This are the stakeholder whose power as well as interest both is high in
company (Raum, 2018). For example, the director and manager of Amazon Plc whose
power is high but interest is low thus the company should manage them closely.
 Keep Informed: This are the stakeholders whose interest is high but power is low in the
business. For example, Government, local community, society etc. of Amazon UK to
whom the company should keep informed about all the internal actions and strategies.
 Monitor: This are the stakeholder whose interest and power in the business is low thus
the company need to monitor them will little effort only as they can influence the
business. For example, general public that are not associated with Amazon UK company
(Raum, 2018).
part 2
presenting client report
From the analysation of the report it is determined that the organisation obtain the growth in the
marketplace of the UK in effective manner. The amazon company is generating higher revenue

from the marketplace by satisfying number of the customers ineffective as well as efficient
manner. During the covid 19 situations the organization face declining rate as the people are
willing to buy only essential item rather than buying the luxury item (Araz, Choi, Olson, and
Salman., 2020).. Furthermore from the analysation the organization is mange to survive in them
marketplace with the assistance of change management tools and innovation. For bringing the
changes in the operation and conductivity of the organization the manger form various plans of
action that aim to focus on improving the quality of product and services. In context to that the
organization used total quality management, Kaizen, six sigma frameworks in adequate manner.
Furthermore organization determine the key trends which is affecting the sales and growth of the
association. The trends are changing in the buying behaviour of the consumer or taste and
preferences of consumer. Along with that the consumer is willing to buy the healthy food as
after pandemic the customers are becoming health conscious. Furthermore it is determine that
the product and services of the organization is valuable in the marketplace.
Apart from that the company has the capability to satisfy the large numbers of the customers in
effective as well as efficient manner. For the further progress and the success the organization
keep monitoring the performance of the association in the organization. For the further
development the company should adopt different plans of action. For the improvement of the
services the company should use PDCA which stands for plan do check and act. Which the
assistance of that the amazon should plan new strategies for the welfare of the organization and
perform them in affective as well as efficient manner (van Echtelt, Wynstra, and van Weele,
2017). In context to that the organization determine the opportunity for increasing the value of
the organization. In order to implement the changes the organization should perform the plans of
action on small scale before implementing on the large scale for determine the impact on the
organization. Along with the organization should determine the potential of the individual
person. After the implement action the organization should check out and identify that the plan is
working or contributing in the success of business. Apart from the company should form the
alternative plans of action form the growth of the business enterprises and lead the marketplace
in adequate manner.
Conclusion
From the above report it will be concluded that the organization has the potential to lead the
domestic as well as international marketplace in effective as well as efficient manner. The

presented report highlighted the plans of action the Amazon is using in order to increase the
value and obtain profit from the marketplace in context to that the company keep bringing the
changes and improving the quality of product and services in adequate manner. Furthermore the
report shade a light on the various management tool due to which the organization is able to
improve the quality of product and services from the marketplace.

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