Business Strategy of Amazon (doc)

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BusinessStrategy
Executive SummaryBusiness strategy refers to the decision taken by the company that assist toachieve organisation goals and objectives. The strategy should be implemented by themanagement in the way that maintain their position in the market, perform their day today operations and build strong relationship with customers that lead to personal growthof organisation. In Amazon, they are adopting business strategies in order to developproper plan, procedures and strategies for business operations. For this they need toconduct various activities which help them in gaining proper outcome. In order toanalyse the macro environment of Amazon, the company must conduct PESTELanalysis that will help them in making effective decision and strategies. Along with thisanalysis of internal environment of organisation, company must adopt SWOT analysisthat will help in identifying capabilities of Amazon. In addition to this to gain competitiveadvantage in the market, Amazon should apply Porter's five force model which will helpthem in maintaining their position in the market and examine the external factors to dealwith them. To identify all possible strategies that will benefit company in the long runthey must adopt Ansoff matrix Model as well Porter Generic model that will aid indeveloping effective strategies to attain goals and objectives of company.
Table of ContentsINTRODUCTION...........................................................................................................................1P1. Analyses of Macro environment on organisation............................................................1M1 Critically analyse the macro environment to determine and inform strategic managementdecisions.................................................................................................................................3P2. Evaluation of internal environment and capabilities of business.....................................3M2. Critically evaluate the internal environment to assess strengths and weaknesses oforganisation internal capabilities,structure and skill set.........................................................5P3. Porter' five force model and competitive forces in market..............................................7M3. Strategy to improve competitive advantage...................................................................9P4. Ansoff matrix and Porter's generic competitive strategies interpret and devise a strategicplan for your business...........................................................................................................10M4.Strategic management plan that has tangible and tactical strategic priorities and objectives..............................................................................................................................................12CONCLUSION..............................................................................................................................12REFERENCES..............................................................................................................................14
INTRODUCTIONMarketing strategy can be referred as overall plan of business for reachingpeople and converting them into potential customers of business (Baker and Saren,2016). These are strategies made to accomplish long term plans of business.Companies develop marketing strategies for effective and efficient working of businessin order to get comparative advantage over it rival companies. These strategies supportorganisation decision making by providing proper guidelines and achieving goals andobjective of company. For this report chosen company is Amazon. This is leading e-commerce company and American multinational organisation. This company wasfounded on 5 July, 1994 by Jeff Bezons. Amazon is providing it services all around theworld and it headquarter is located at Washington, US. Mission of Amazon is to providelowest possible price to customers with best available selection and utmostconvenience to customers. Its values include earn trust, customer obsession,ownership, hire the best and set highest standards in marketplace In this assignmentconsist of complete study regarding various strategic decisions of company. Impact ofmacro environment on business operations and critically analyses of external factor oncompany. Evaluation and analyses of internal and external factor of business in order toidentify capabilities of business. Study of porters five force model to evaluatecompetitive force and improve company competitive edge.P1. Analyses of Macro environment on organisationIn order to analyse macro environment of Amazon company, PESTLE model hasbeen used. This model is a strategic analytical tool which helps in developing strategiesand decision-making of company (Baker, 2014). Through this external environmentsuch as political, economic, social, technological, environmental and legal factors canbe critically analysed and its impact on business operations can be understood.Political factorsAmazon is an e-commerce organisation which offers its service through onlinecatalogue but political environment of a country can impact its business in positive andnegative way. Political factors consist of rules and regulation of political and governmentparties. It includes trade policies, tax rates, political stability, changes in regulations etc.1
Positive:Currently British and American government is holding a decisionsregarding potential trade deals between countries. So this could serve Amazonease in operating UK and reduce import taxes and strict regulations also.Negative:Brexit can have negative effect as Amazon of UK have to faceconsequential impact which cause political upheaval and uncertainty on country.Economical factorThis factor has major impact on decision making of Amazon company aseconomic factors are connected with goods, services and money. It includes interestrates, recession, taxes demand and supply etc.(Baker, 2016).Positive:People of UK are continuously looking for job options so Amazon canhave positive impact on organisation and leads to addition in human capital ofcompany.Negative:Increasing changes and uncertainty in stock market can have negativeinfluence over Amazon company and leads to drop in share price.Social factorThis factor incudes lifestyle, briefs, buying habits, population, social trends etc.All these factor have impact on overall business of Amazon company. Organisationhave to consider social factor before developing strategies (Banerjee and Soberman,2013).Positive:Social trends of UK or behavioural shift in customers by using onlineservices and market is leading to positive impact on Amazon company.Negative:Government is not encouraging extending services of Amazon suchas delivery of products to doorsteps of customers as its is influencing lifestyle ofUK and resulting in obesity pandemic.TechnologicalThese factors affect business operations and competitive edge over other rivalcompanies. Technology factors include all those variable which are related todevelopment, existence, availability of technology (Bang, Joshi and Singh, 2016).Positive:Increase in digital devices and services trends in UK customers is anopportunity for Amazon to grow and rise in this field. UK country is very advance2
in technology so company is also using new and innovative technology whichleads to improve in its business activities.Negative:Company is also facing constant treat of cybercrime. Major activitiesof Amazon in done online with the use of internet technology. Data breaches andhacking can affect organisation and leads to compromise with sensitiveinformation of organisation.EnvironmentalExternal factor such as environment in which company is affected, includesclimate change, pollution, availability of resources, environment related laws etc. (Baranand Galka, 2013) Amazon is mainly using online source but its operations affect naturalenvironment as well as macro environment.Positive:Amazon company can work to improve its environment situation andsolving environment issues through CSR activities. This organisation can buildstrong positive image by taking interest in environmental programs.Negative:Government is continuously increasing pressure on large companiesto reduces organisational emissions and Amazon company also have to followstrict rules and regulation of government.LegalLegal factors which are affecting Amazon business includes all regulation andlaw determinates that are influencing business action and decision in positive andnegative way.Positive:Amazon company is has good relationship with HMRC which is HMrevenue and customs department of UK and this leads to help company invarious way as company is not facing any legal challenges at moment.Negative:company is currently under federal investigation for selling goods toindividuals on watchlists and disregard to international law and safety.M1Critically analyse the macro environment to determine and inform strategicmanagement decisions.3
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