Context of Business: SWOT and PESTLE Analysis for Amazon

This report explores the SWOT and PESTLE analysis for Amazon, including the opportunities and threats faced by the company. It also discusses different leadership styles and the social responsibilities of Amazon.

Context of Business

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
1.SWOT and PESTLE analysis for Amazon ..............................................................................3
2. Analysis of opportunity and threat from PESTLE ..................................................................5
3. Different styles of leadership...................................................................................................6
4. Management and Leadership Style That will Help Amazon To Grow Further.......................7
5. Social responsibilities, response and obligations of Amazon .................................................8
6. Reflection towards report.........................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES................................................................................................................................1

INTRODUCTION
Context of business refers to the various factors which affects the business from numerous
perspectives. Analysis of business context defines the environment where business is being
operated also includes the internal and external factors. The main objective of business context is
to analyse the environment and according to that business plans and creates the strategies of
action. This report explored about Amazon, which is an American technology company, but it
focuses on e-commerce. It is considered to be the biggest company among the big five
companies of U.S. This report describes the SWOT and PESTLE analysis for Amazon and it
states the PESTLE factor which influenced the opportunities and threat to the business. It also
elaborates the various styles of leadership which is followed in Amazon. It describes the social
and ethical obligations, responses and responsibilities of Amazon. In this report a suitable
leadership style is also recommended which helps the management style of Amazon to grow
faster.
MAIN BODY
1.SWOT and PESTLE analysis for Amazon
Amazon was come into business in 1955 the motive of the company is customer fascination. It
doesn't give more value to its competitors. The objective of Amazon is to give quality products
as it is a costumer centric company (Belas, 2020).
Swot analysis is as follows-
Strength
Customer satisfaction is the major goal of the company so that they deliver the product timely to
the customer therefore it has a huge delivery network. The model they have used is a low cost
model. As it has established as IT companies so it has advantage of IT services along with e-
commerce.
Weaknesses
Amazon has faced weakness of flop products in the early stage. Providing free shipping is a loss
for the company. Amazon is unable to trade in the Chinese product due to the trade war between
America and China (Drewniak, 2020).

Opportunities
It has adopted the digital changes of the world therefore offers its own payment and wallet
services to the customers. Now it is entering into physical location also and expanding its
business the Asian countries.
Threats
Being an e-commerce company cyber crime, data security and hacking is the biggest concern of
Amazon (Amayreh, 2020). Local sellers & many big companies like flip-kart and wall mart
entered in the e-commerce market and giving tough competition to Amazon.
PESTLE analysis of Amazon-
Political
Amazon provides services worldwide but it needs support of government they have support of
US government, but it serves worldwide so have to follow strict laws and taxation policies. Some
countries welcome Amazon but some countries like China, they e-tailing companies of China.
Economic
Profit and growth depends on the economic conditions where it is operating the business. The
Worst economic condition makes difficult for Amazon to stay competitive because consumer
can buy from retailers. Due to covid every country is facing recession so it impacted the profit
margin of Amazon (Gereziher, 2020).
Social
Online shopping has become a buzz nowadays, youngsters are crazy for it, Amazon made people
indolent, permit them to stay at home and provide them all the necessary products like –
groceries, electronic, clothes and films.
Technological
Amazon tries to improve its technology. There for it has launched Amazon Prime to entertain the
customers and to reduce the threat of cyber crime and to protect the data like debit and credit
card details of the customer it has introduced Amazon pay.
Environmental
Amazon has to look for environment there for they are providing online bill to protect the nature.
It has made investment in solar panel and energy to save the unnecessary use of electricity.

Legal
Amazon has to follow consumer & employee protection, sale of goods, health and safety,
security, contract and organizational laws of numerous countries (Tekleab, 2020).
2. Analysis of opportunity and threat from PESTLE
Utilization of opportunity
Pestle analysis helps the business to remove the threat from political, social, economical,
technological, and legal factors, Amazon can take advantage from these factors after finding out
the pros and cons of these factors amazon can introduce new products and technology in the
market. From the political factor amazon can expand their business in the untouched countries as
the government of many countries welcome Amazon to make investment. As it is e-commerce
company but for the storage of goods and products it needs to open warehouse in different
countries, different states and cities to give delivery on time. With the help of PESTLE Amazon
analysis the market conditions and trends of various countries and to survive their it tied up with
the names and famed e-commerce companies to survive for long. With the help of PESTLE
Amazon got to know the GDP of different countries, lifestyle and income of the people, how
many people can spend on livelihood after knowing all this it enterers in different countries.
After considering the Technological factor it has introduced prime video which provides films
and series to its customer. The major aim of prime videos is to make loyal customer because
amazon provides free delivery to the prime customers the reason behind introducing prime is this
only so the customer don't switch. To survive in Indian market it got merged with Myntra
(Panagiotakopoulos, 2020).
Elimination of threat and weaknesses
Amazon started the business by selling books but now it is spread its business in the globe and
now it is dealing in software, video games, food, toys, kitchenwares, merchandise, kitchenware
etc. and serving a million of customers worldwide. It becomes possible because it used their
strength to reduce the weaknesses. The biggest strength of Amazon is that they follow customer
centric approach. It gathers the feedback and views of the customer on their products and if the
customer gives negative feedback they try to sort out the issues. In India Amazon was getting
threat from big e-commerce of India and local sellers as people prefer to buy from local retailers
to avid this threat Amazon got merged with e-commerce of India to avoid the local sellers it

gives them a platform to sell their goods and products to Amazon instead of selling to customer
and it reduces the manufacturing cost of Amazon. To avoid the high cost of manufacturing of
goods and products it has made few strategies it got tied up with good providers to avoid the
manufacturing process and they get the finish goods directly. Amazon tied up with different
delivery partners like- Ecom express, blue dart, delivery, Fed-ex etc. so that delivery becomes
easy and customer get their product on time. The major weakness of Amazon is loan and high
debt to repay that loans it is doing tie ups and mergers with other e-commerce to survive in the
market. expanding their business in the developing countries and Asian markets are helping
Amazon to generate high profit as these markets are not expensive as compared to the market of
UK and US (Ciulla, 2020).
3. Different styles of leadership
A leadership style is a process that how a leader guides a team through different stages and
motivate the employees through innovation and creativity towards their work. The leadership
styles describe how a leader utilize plans, manage group of people, overlook work etc (Gosavi,
2020). In case of Amazon the management and the leader refers the leading behaviours towards
their employees. Based on different behaviour, personalities and methods there are three basic
leadership styles which are as :-
Authoritarian (Autocratic) Leadership Style- Authoritarian leadership style is completely
opposite of the democratic leadership style. In this style, a leader will not take any advice with
the employees and inform them what to do , how to do and itself decides the polices and
procedure and order the employees to follow the criteria made by them. As this style has
followed in today's business environment. Due to Covid-19, the Amazon operate this leadership
style as the crisis makes lots of changes in working environment and in policies. The
management change such policies and inform the employees to follow the procedure, so that
they can that advantage of this opportunity and build a goodwill towards their customers and
satisfy them by providing good services.
Participative (Democratic) Leadership Style- As this style is more effective style and the leader
offer the group members and take part in the group to contribute high quality as compare to
autocratic group and complete the task. Participative leaders encourage their group member by
taking part in the activity and invite employees for any suggestion or any ideas towards their

target but the final decision-making process will stay in the hands of leader (Chan, 2019). In
democratic leadership style, the relationship of management and employees developed as they
can share their ideas to each other and together complete the task. In case of Amazon, the leaders
motivate the employees and ask them to give their maximum working hours to work and
contribute towards success, as the leader having the final authority to take decision. During
Covid-19, the amazon used it as a opportunity to achieve higher market share. As the leaders are
also take part in controlling the sales as they are known for a online business. At the time of
pandemic, every employee and leader take initiative towards their business and increase their
efficiency.
Laissez-Faire (Delegative) Leadership Style- In this style, the leaders provide necessary
resources to its team and tools needed to work well and by allowing greater employee autonomy
the leader inform the employees to complete the task as according to them so that it helps to
build better independent workers (Reunanen and Kaitonen, 2017). The delegative leader describe
hands-off to their employees, once the leader assign a task to the employee then the
responsibility to complete the task in on employees. The operating manager of Amazon leaves
their employees to complete the target by taking decisions and increase the sales ratio. So, that
the employees well develop their skills and effectively work towards the organisation. The leader
trust their team ability this will encourage the employees towards their performance.
While discussing all this three basic style a Amazon uses a participative leadership style in
current situation, as the leaders and management participate in the workflow and invite the
employees for any suggestions. So that they can build their market share and become a Trillion
Dollar Company.
4. Management and Leadership Style That will Help Amazon To Grow Further
Authoritarian or Autocratic Leadership Style helps Amazon to grow in future as the Jeff Bezos,
CEO of Amazon, follow this style while taking decisions. And focus towards the customers by
maintaining the product selection and offering various services so that the customers satisfied
and Amazon will lead for long-team and flexible enough for any changes occurred in future. An
autocratic leader increase the growth of Amazon by improving efficiency and productivity ,
quickly decide or implement plan in the organisation without taking suggestion with rest of the
team, the authoritarian leader can supervise his team directly. For growth in today's business

environment the Amazon leaders will ensure that in their surroundings they can take decisions
and ordered to their team members to follow the decision and this autocratic style in helpful for a
company in any rapid decision-making (Harms and et.al., 2018). As according to the Besoz
philosophy they are focusing towards customers rather than competitors so this style recommend
for increasing the efficiency towards growth of the firm.
This style takes less time in decision-making process as the decision made by one
person's opinion. So every member in a team clearly understood the instructions and eliminate
the defect of confusion. The leaders operate a greater power to provide a way to their team as it
is helpful in critical situations. An autocratic leader has lots of members surrounding himself that
members do not ask questions towards the decision and authority set by the autocratic leader as
an authoritarian leader is the on who control or manage every part of activity that has
implemented strict standard and this all will build a culture that are right for a company
(Dyczkowska, 2018).
5. Social responsibilities, response and obligations of Amazon
Corporate social responsibilities define the company's attempts and efforts towards the
improvement of society. It can be done by donations, charities and by providing education to the
poor students. By CSR company can make policies which are environment friendly and can
conduct some plantation activities and recycling the product. Amazon put more focus on CSR
activities one of its department work for the society. Like during the proliferation of covid 19
Amazons created Amazon relief fund in which it has donated big amount of money to support its
delivery services partners to deal with the tough situation. It donates the study material electronic
devices like computers and laptops to the schools which are situated near go downs and
warehouses of Amazon in US. Gender equality is always a priority of Amazon, for development
and welfare of women they give equal job opportunity to them. Amazon take cares the
employees for that it runs program in which Amazon pays more than half of the tuition fees of
various programmes like air plane mechanic or different programs which helps the employees at
their workplace also, it has attracted many employees till now. For the welfare of the
environment it encourages the use of Solar panel and made heavy investment in wind and solar
renewable energy. Amazon also conduct campaign activities to make people aware about the
recycling of the product. It also aware the people of draught affected area to save and harvesting

of rained water. For environment amazon has reduced the use of paper, in many cities it is
providing online and paperless bill on e-mail of the customer, even they are avoiding the extra
packaging to reduce the wastage of paper.
6. Reflection towards report
While making this report, I have learned the SWOT and PESTLE analysis for Amazon, for any
business what are the things to keep in mind to analysis-competitive environment and what are
the responsibilities to behave ethically in relation to political, economical, social, technological,
legal and environmental issues. As it is important for every business to understand the strength,
weakness, opportunities, threats which are internal factor and external factor (Diehl and Bishop,
2017). By applying the SWOT in the Amazon, they will get a benefit to know that by what
elements they can distinguish themselves with the competitors and improve the strategies so that
they effectively focus towards customers satisfaction. Develop new things in business so that the
business will get a opportunity to expand their growth and the negativity which are affecting to
the organisation can be a threat, as I gained a knowledge by analysing this factors is helpful for
me to develop my skills towards business and consideration of the future organisation within
global business environment.
As I have also learned different leadership styles for development of people in the
organisation. The leader is one who guide their team , motivate towards goals and overlook work
of employees. I gained a knowledge while researching towards the three basic leadership styles
as the authoritarian leadership style teach me about how a leader can independently take
decisions in any situation without interruption of the rest team whereas participative leadership
styles build my knowledge towards the leader that how a leader can take part in the activities and
invite employees for any suggestions so that they get motivated towards the goals. And the free-
rein leadership style is one of the most effective style as all the employees are free to take
decisions. All this leadership styles guide me or build my knowledge towards different types of
leaders are included in an organisation. And it is benefited for me , as I came to know the
behaviours aspects of an leader, the qualities a leader required , the way in which a business can
developed with peoples and also the how to develop the employees skills by giving
responsibilities to the employees so that they can bring innovative ideas and creativity for the
business grow. As Amazon is using the best leadership style so that they can increase their

Market share in the present condition as they use the current opportunity and work according top
the situation arises as they mainly focuses towards the customer satisfaction.
I have also learned about the Corporate Social Responsibility (CSR) model in which a
management deals with its social and environmental impacts and interact with shareholders and
public (Advantage, 2020). Through this model I came to know that how this model is helpful to
improve the image of business in front of public, engaging the customers towards the business,
increase the brand awareness towards peoples and recognize the changes, helpful in operation
cost saving and how to overcome with the competitors this all are benefited for me in future how
to compete in the market and increase market share for grow.
CONCLUSION
It can be concluded from above information that this report is based on the SWOT and PESTLE
analysis for Amazon and with this analysis the changes evaluated in PESTLE factors which
influenced the opportunities and threats businesses and the company is addressing their strengths
to negate threats and weakness affecting their opportunities to consider the future organisation
business environment and identify the responsibilities to behave ethically in relation to social,
culture, economic, and environmental issues. As this report is also evaluate the different
leadership styles and management styles that will help Amazon to grow in future. And develop
appropriate policies and strategies within the changing environment to meet the interest of
stakeholders. This study is also commenting on the responsibility, response and obligations in
their ethics and social responsibilities in the processes at Amazon using evidence from research
and also involve the reflection of experience in the report by applying the theories to the practical
framework of Amazon for the design and development of the organisation.

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