Pestle Analysis of Amazon

AMAZON
INTRODUCTION
Amazon is American Multinational Corporation that
is operating its business in information technology
providing services such as ecommerce, digital
streaming, cloud computing and artificial
intelligence. Company was established in 1994, 5
July by jeff Bezos in Bellevue, Washington, United
states with an objectives to offer extreme qualitative
services to people living across worldwide. Amazon
is one among four big technology companies such as
Google, Facebook and Apple thus it have US$
280.522 billion revenue in 2019. Company was
initially started as online market place but it further
expand into provide products and services such as
video games, Furniture, food, jewellery, toys and
electronic items.
Pestle analysis
Pestle analysis is a
powerful tool that helps in identifying various
external factors that have impacted on operation
and strategy of business. Therefore, Pestle model
is used to analysis and evaluates situation of
external environment in which Amazon is
operating. Such as:
Political Factor: Amazon operates its business in
several countries so political condition, rules and
regulation made by government of each country
impact on its growth and strategy. Government are
encouraging more and more ecommerce enterprise
to expand their business operation thus it have
provided opportunity to Amazon to enter into
various global market for earning maximum
profit.
Economical factor: Retail industry is growing at
rapid stage because people are interested to buy
regular or essential products for satisfaction of
their needs. So, all whether high or low disposable
income group are interested to prefer Amazon
products as it have wide range of products and
services at reasonable prices (Amazon Pestel
analysis, 2019). It have products form premium or
high range to lower so it have inspired each
individual to be choose products of Amazon for
fulfilment of their requirements.
Social Factor: Recently there is trend in society to
make more online shopping to cater their needs so
Amazon by adapting to external change have
satisfied customers needs beyond their expectancy.
At the same time due to increased competition
level and availability of varieties of products
customers are become more demanding so
Amazon by offering best quality products at
reasonable rates have influenced them.
Price: Company have make use of three
different pricing strategy in order to retained and
attracted more and more customers in the
organisation. For examples: It reviews its price
with existing competitors and makes adjustment
in its price so that customers can get products at
affordable and reasonable rates. It also makes use
of price discrimination or setting different price
for same products thus company can easily
adjust its price at national market condition.
Thus, customers are charged prices for valued
that are delivered to products which have lead in
expansion and growth of firm.
Place: Official ecommerce website is primary
place where Amazon sells its various products
and services to number of individual that are
living across worldwide. Like Amazon. Com or
audible. Com and many more sites that have
target specific group so that more and more
people are motivated to be part of firm. Amazon
books in seattle is physical book stored that is
operated by company to provide ease to
customers to physically come and evaluates
products for satisfaction of their needs.
4 Ps of marketing used by Amazon
Amazon inc have make use of
marketing mix elements in order to motivate large
number of customers to visit its e-commerce website
for purchase of products and services. 4 P’s of
marketing mix include products, place, promotion
and price which have been used by marketing
manager of Amazon to expand firm market share and
profitability (Prist and et.al., 2019). Despite biggest
ecommerce firm it is also facing tough competition
so marketing manager in order to retained market
share and profitability of firm have make use of
marketing mix strategy. Such as:
Products: Amazon in terms of products and services
is known as top player in online retail industry that
have offer wide varieties of products to customers to
choose among for satisfaction of their requirements.
Such as it have products from home care, personal,
clothe, food, to consumer electronic goods so
customers can easily make purchase of products
while staying safe at their homes.
Promotion: Amazon has make use of various methods in order to
promote products and services of company to end users such as
sales promotion, advertisement, public relation and direct
marketing. Advertisements is most effective method that has help
in communicating or generating awareness among people about
products or service in which firms deals that have contributed in
increasing overall sales volume and profitability (Amazon
Marketing Mix (4Ps) Strategy, 2019). It also offered regular
discounts or other special offers at various occasion so that
customers are motivated to select products of its as compared to
other competitors. Company make use of direct digital or online
marketing that helps in building and maintain strong relationship
Marketing section
Pricing: Company have set reasonable or value pricing strategy
for its different products and services so that customers can get
more value at lower price.
Sales: E- commerce or internet, email marketing are some of the
method which have been used by Amazon to increased its overall
sales and profitability.
Advertisement and promotion: Special discounts, emphasis on
building public relationship and direct marketing are promotion
tactics that are used by Amazon to retained and add more
customers in the organisation(Gage, 2017).
Technological factor: Most of the
organisations are making use of digital media
and innovative technologies to delivered best
services to customers. Therefore, Amazon
by making more and more investment in new
technologies have provide ease and comfort
to customers to easily select and get delivery
of products at particular place.
Environmental Factor: Lot of harm have
been caused by retail industry to environment
and natural resources therefore Amazon by
planning to make optimum utilisation of
resources and take steps towards CSR
activities have build strong brand image and
retained customers loyalty.
Legal Factor: Company have make separate
legal system that oversee all issue related to
laws, rules and regulation made by
government so that no barrier or hurdle can
be created in smooth operation of business
(Comm and Mathaisel, 2018). Amazon has
tried its best to abide all rules and regulation
made by government in order to avoid
penalty and extra fine.