SWOT and PESTEL analysis of Amazon

This document provides a detailed analysis of the SWOT and PESTEL factors affecting Amazon's business. It also compares and contrasts different leadership styles and identifies the current style of the organization. Additionally, it discusses the responsibility, response, and obligation in ethics and social responsibilities in Amazon.

Context of Business
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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY ..................................................................................................................................3
SWOT and PESTEL analysis of Amazon...................................................................................3
Evaluate how the PESTEL factors has influenced the opportunities and threats of the
business.......................................................................................................................................5
Compare and contrast the different leadership styles and identify the current style of the
chosen organisation.....................................................................................................................6
Responsibility , response and obligation in their ethics and social responsibilities in Amazon. 9
Reflection report..........................................................................................................................9
CONCLUSION .............................................................................................................................11
REFERENCES..............................................................................................................................12
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INTRODUCTION
A business is define as an organization or company in which the activities related to
business is been carried by group of people or individuals such as industrial, professional and
commercial activities (Bucchiarone and et.al., 2012). Business are mainly run with the objective
of earning profit and some businesses are run with the motive to providing benefit to the society.
Basically it is define as the process in which products and services are been exchanged or sell by
the company to its target audience. The organisation chosen for this report is Amazon. The
company was founded by Jeff Bezos in year 1994 in Washington US. The company deal in
almost all goods and services such as electronics, furniture, food, toys and many more. The
topics covered in the report are SWOT analysis and PESTEL analysis of the company,
opportunities and threats faced by company on bases of PESTEL analysis, different styles of
leadership, best style which they can use in its business operations, ethics and social
responsibilities in the processes at company and the reflection report of the experience.
MAIN BODY
SWOT and PESTEL analysis of Amazon
Amazon has able to establish its brand name in the e-commerce sector by analysing and
evaluating the market trends and the preferences of customers. By analysing various market
trends and the strategies the company is able to take the benefit from competitors and able to
start at this position in the market (Hermosillo, Seinturier and Duchien, 2010).
SWOT Analysis
Strengths
 Brand name- The company has able to establish its brand name in marketplace and holds
strong position in the e-commerce sector.
 Focus on customers- The main motive of the company is to provide conveniences to its
customers and provide all type of products at one place at affordable prices. Hence they
are known as customer-oriented brand.
Weaknesses
 Facing loss in few market areas- The company is experiencing losses in few areas of
market as people simply return the product after it has been deliver which act as the extra
cost.
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 Declining consumer safety- As they are offering large range of products to its customers
so they are facing problem in its management and don't provide guarantee of safety. Its
important for them to remove or take precautions for pesticides and unsafe products.
Opportunities
 The company is dealing on online platform only where as it can come up with physical
stores in order to attract large number of potential customers.
 The company can acquire more e-commerce companies in order in order to increase its
profit margins and to reduce the level of competition (da Cunha Mattos and et.al., 2014).
Threats
 The changes take place in the policies and rules of government so it become difficult to
adapt to the changes and effect the proceedings of the company.
 As they are operating on digital platform only the chances of fraud are more due to
increase in cybercrime and effect their network security system.
PESTEL Analysis
This is one of the best approach which business unities uses in order to identify and
monitor the various external factors which can effect the operations of business.
Political factor- The company is not facing any difficulty in its business operations as
they US is politically stable. The company is experiencing full support from government side as
the management is taking efforts to improve the cyber security options.
Economical factor- The company is dealing in large range of products at global level so
is experiencing economic stability in the developed marketplace. With the increase in the
disposable income of the customers in the developed countries they are experiencing increase in
sales and profit volume (Johannsen and Leist, 2012).
Social factor- The changes in the taste and preferences of the customers changes on
frequent bases and moreover the increasing online buying habits of the customer help them in
increasing the sales.
Technological factor- The advancement in technology is effecting the operations of the
company in positive and negative way that is as they are dealing online so these updates helps in
making there process easier. Whereas the crime activities are increasing due to which they are
facing security issues.
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Environmental factors- The company is taking proper measures in order to promote
healthy environment as these steps helped in sustainable development of the business.
Legal factors- They are following all the legal rules and regulation set by the
government and implementing changes in its import and export operations.
Evaluate how the PESTEL factors has influenced the opportunities and threats of the business.
IN context of the Amazon, the PESTEL analysis provide scope to identify the
opportunity and the threats facing by company in order to take corrective steps to make its
position more stronger in marketplace (Lubinski, 2014).
Political factors
 Opportunity- The head office of Amazon is in US which is politically stable so in the
process of business expansion they will not face any difficulty due to these political
factors.
 Threats-Company imports large import of products from overseas so there is a possibility
of reducing in the imported products.
Economical factors
 Opportunity- The company is operating at global level hence it has large employee force
moreover they are helping the small businesses to tie up with them. Hence generating
employment opportunities and expanding its vendors.
 Threats- The company has its business across the globe due to which they are facing
problems in foreign exchange rate as different countries have different rules regarding
exchange rates.
Social factors
 Opportunity- The customers are shifting from offline mode to online mode for shopping
purpose and for satisfying there needs and wants. This is one of the crucial opportunity
for the company to increase its sales and profit volume.
 Threats- Many customers prefer traditional modes to buy goods and services due to fraud
and criminal activities taking place on various online platform. Due to safety and security
purposes they are preferring offline modes (De La Vara and et.al., 2010).
Technological factors
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 Opportunity- The advancement in the technology mainly in the digital sector making the
operations of company easier and faster as they are able to address the issues and
problems of customers.
 Threat- The delivery process sometime takes more time than the estimated time and when
customers receive broken products it will lead to customer dis-satisfaction (Li, Bose and
van der Aalst, 2010).
Environmental factors
 Opportunity- The company take steps and follow all the activities related to
CSR(corporate social responsibility) and organise campaigns which help in enhance its
value in marketplace.
 Threat- The company is dealing at global level so is highly involved in import and export
activities due to the pollution level is increasing.
Legal factors
 Opportunity- The company follow all the rules and regulation related to legal factors
hence government provide them support in diversification and expansion of business.
 Threat- Due to different rules and restriction in various countries it face problem in
operating there will act as one of the biggest threat.
The company is taking steps in order to reduce the weaknesses and the threats which they
are facing in the marketplace by making its strengths more stronger. By focusing on making
strong bounds with its vendors and suppliers they are solving the issues related to import and
export services. They are focusing on providing quality services to its customers and to solve
their issues in order to provide better customer experience and satisfaction. This help in building
trust among the customers (CHUANG and Liao, 2010).
Compare and contrast the different leadership styles and identify the current style of the chosen
organisation.
Leadership styles
Leadership is a position where a person influences the behaviour of others. They help in
providing directions, implementing plans and motivating people to guide their actions. The
leader inspires and empower with various practices such as open communication, employee
engagement, and creativity.
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Autocratic Leadership- In this style of leadership, company engages in holding
authority to make decision and provide guidelines to perform various tasks. The leader holds
authority in total contrast with delegative leadership style. As compare to delegative leadership
the leader controls the activities whereas in delegating leader delegates and exercise no control in
the working of a company.
Delegative Leadership- It is also called lassiez faire, company engages itself in
supporting and delegating work to subordinates. The leader holds no authority and delegates its
decision making to subordinates. In compare with participative leadership it provides full
authority to its workers while in participative leaders includes its team members to make
decision in a company. It helps in keeping high morale of its employees (Lankoski, 2016).
Participative Leadership- In this leaders involves others for taking decisions and make
them more participative in a company. In comparison with transactional leadership it motivates
employees without including monetary incentives and rewards. In this leader inspires its team
with the help of involvement, work satisfaction, and engagement. While in transactional, leader
guides the activities to achieve a task in exchange of monetary rewards and incentives.
Transactional Leadership- In this leader uses transaction approach for completion of a
work. The leader holds a transactional relationship with its team or subordinates. They provide
monetary incentives and rewards in completing of a work. In comparison with transformational
leadership, the leader is more focus on providing directions for achievement of a task with the
help of monetary motivation.
Transformational Leadership- In this leaders engage themselves to transform its team
with a futuristic view and inspires them to achieve goals effectively. In comparison with
autocratic leadership the leader inspires its team instead of controlling them. In autocratic,
leaders exercises full control in the decision making process of a company. While in
transformational, leaders inspires and empowers them to achieve its vision. They provide full
support and involves open communication between management and its employees (Berger,
Herstein and Barnes, 2015).
In this company uses transformational leadership style with setting of high standards for
achieving goals and objectives. The leader inspire and transform its team with a vision to
accomplish. They empowers its team by providing effective work culture where people chase
innovation and high standards in completion of their task.
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Leadership style of Amazon
The most successful business of the world in e commerce is Amazon. It is achieving the
heights of success because of the leadership style they have in the environment of the
organisation. They have transformational leadership and the characteristics are charismatic and
determined. They are helping the organisation in maintaining long term relationship with the
employees. The leaders have the ability to influence the behaviour id others and they have
decisions for the organisation. The transformation leadership helps the organisation in making
strategies for achieving success (5 Key Takeaways from Jeff Bezos’ Leadership Style, 2020).
They help the organisation in increasing the satisfaction of the employees.
From the point of view of Tim Metz the leadership style is important in the organisation
because they help the employees in increasing the performance and help them in maintaining the
relationship with the organisation. There are many types of transformational leadership and they
are important for understanding the needs of the employees. The leaders will make the strategies
which will help the organisation by the charisma because they have the ability to influence the
employees. The leaders will make decisions which are important for the success of the
organisation. The strategies are helping the organisation manage the performance in the
environment which is helping them in expanding the organisation (Naray, 2011).
The environment of Amazon is helping the employees and they are making decisions for
the achievement of the goals of the organisation. The leaders will be motivated to increase the
satisfaction of the employees. The work in the organisation is given according to the skills of the
employees. The most important factor is that they should analyse the skills of the employees to
help them in increasing the performance.
The leaders in the organisation should make the strategies which will help employees to
perform creatively and they will increase the satisfaction of employees. The employees are
increasing the performance when are are managed by the leader who has the responsibility to
increase the performance of the employees and they will make the strategies to help the
organisation achieve the goals. The factors which are increasing the satisfaction of the employees
will help them in performance of employees. The employees will help the organisation in
making strategies for the expansion of the organisation (Amazon and corporate responsibility,
2020).
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Responsibility , response and obligation in their ethics and social responsibilities in Amazon
Social responsibility is an ethical concept where an individual are accountable for
fulfilling the social duties, actions must be considerable in the concept of society. From the point
of view of Harrison Homan Amazon increase their abilities to satisfied their stakeholders for the
growth of organisation in the e-commerce. Amazon's stakeholders have a wide interest in the
company as a wide range of expansion so amazon have to follow the corporate social
relationship strategies and adopt the programmes according to that. The main stakeholders are
customers, employees and communities. These CSR programmes help in clarifying Amazon's
vision, mission and affect the organisational growth. These CSR responsibilities includes, Local
community support, focus on education and empowering workers, health and safety issues for
the employees, gender equality and minorities issues and most important carbon emission in the
factory outlets of amazon (Beringer and Tarlin, 2012).
The three factors responsibilities, response and obligation effect in the ethics and CSR:
Responsibilities: The social responsibilities and ethics must be applied by both the
individual and a company like Amazon. Main responsibilities of the amazon is to maintain the
integrity of the society and the outside environment of the company must be protected. They
have to focused on the society's need and health.
Response: In reality how a company is responding to the CSR and ethics policy is
important. Their decision and actions all are dependent on the society. Company like amazon
have fulfil their response in CSR by giving some amount of their sales percentage to the society
and do some social work like, support the local community and take care of the companies staff
and customers.
Obligation: Main obligation of the amazon is to give the employment opportunities in
the market and help in growing the economies health. To follow these obligation amazon use
various techniques and policies which help in achieving their CSR duties and responsibilities.
Reflection report
I am glad that I get this opportunity to conduct the research on the business and its
operations in the marketplace. When organisation is operating in the business environment, it has
to deal with many issues and problems in order to identify the various opportunities available in
the marketplace which they can consider. The organisation need to work on resolving its
weakness and need to find solution for the threats in order to accomplish the desire goals and
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objectives of the company. In context of Amazon, it has been identified that due to increasing
cyber crime they are facing problem as there sales are reducing and they need to work on
improving it. With the use of advance technology there work process has become easy as they
are functioning across the globe so need to have strong network connectivity. The strong
connectivity has helped them in resolving the issues which are internal as if they are not able to
have strong network connectivity the operation process will take more time. I come to learned
that for the success of business organisations it is important to identify and evaluate the market
trends and should function accordingly. The needs and preferences of people changes frequently
and its important for the company to process according to there desires. The company has no
trend from the competitors as they are allowing every business weather it be a small or large
business to work with them and share the profit margins.
While preparing this report I come learn that the data plays very important role in the
business and its the primary responsibility of the company to secure it from any misuse. In
context of Amazon, they have quite big amount of data and they need to function on security
terms in order to protect it as if any mistake take place then it will have a negative impact on the
brand reputation in marketplace. The company has great opportunities in marketplace as they are
the leaders of e-commerce industry where as if they come up with its physical stores then it will
help them in profit maximization and acquire strong position in marketplace. I come to know that
I need to work on my time management skills as it play important roles in term of work life. The
proper time management helps in accomplishing the goals and objectives on time and provides
many benefits. I come to learn that adoption of appropriate leadership style helps in driving
effective results as leaders play important role in the organisation that is they are responsible to
manage workload among their team members and motive them to perform better. They are the
one who has the abilities to enhance the skills and performance of its team members. Moreover I
come to learn that its very important for the business organisations to be active in marketplace as
to do right things at the right time as the right time goes away the opportunity also goes away in
order to achieve success. Working on my time management skills will help me in identifying the
better career options which will help me in enhancing the overall personality and will able to
achieve desire future objectives.
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CONCLUSION
From the above study it has been concluded that there are various factors which take
place in the organisation and outside the organisation which has impact on the performance of
the company. In this current business environment the customers plays very important role as
they there preferences and desires matter and companies need to function according to their
needs and wants. The SWOT analyses help the company in identifying the various factors by
which they can make their position more stronger in the marketplace. The leaders are the most
important part of the company as they are responsible to adopt the appropriate leadership style
according to the skills and abilities of its team members.
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REFERENCES
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Online
5 Key Takeaways from Jeff Bezos’ Leadership Style. 2020. [Online]. Available
through<https://pagely.com/blog/5-lessons-from-jeff-bezos-leadership-style/>
Amazon and corporate responsibility. 2020. [Online]. Available
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responsibility/>
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