Impact of COVID-19 on E-commerce Business: Internal and External Analysis of Amazon

This report analyzes the impact of COVID-19 on Amazon's e-commerce business through internal and external analysis. It includes a SWOT analysis and PESTLE analysis to evaluate the company's strengths, weaknesses, opportunities, and threats. The report also discusses the impact of the pandemic on e-commerce businesses and how Amazon has fared during this time. The subject is Marketing Fundamentals and the course code is not mentioned. The college/university is not mentioned.

Fundamentals: Assessment 2

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
TASK 1............................................................................................................................................1
Internal Analysis.....................................................................................................................2
External Analysis....................................................................................................................5
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Marketing is undertaken as the practices to market offerings of firm with intent of accomplishing
the requirements of their customers. Moreover, this is the methods for manufacturing products &
services based upon the consumer have needs as well as facilitate information through utilising
effective tool and techniques of promotion. The reason behind this is that person may buy goods
and attain objectives on specified time. In addition to this, marketing fundamental signifies the
procedures through those individuals that can concentrates upon accomplishing the requirements
and desires of consumers by exchanging items as well as also renders values to other person. The
company which is undertaken completing this report is Amazon, which is a leading American
multinational technology firm. It mainly focuses upon e-commerce, cloud computing, artificial
intelligence and digital streaming. Moreover, this is also known to be one of the big five
companies within U.S. information technology sector. The key aim of this report is to critical
analysis and evaluates the impact of corona virus (COVID-19) by conducting internal and
external analysis.
MAIN BODY
TASK 1
IMPACT OF COVID pandemic on E-commerce business (AMAZON)
The COVID pandemic emergency has constrained different organizations for delivering the
many years old conventional plans of action or face shutting for all time. In addition, the new
and existent advances are helping cutting edge of all business toolkits as well as forward seeking
business are represents the talent questions which raise from those new digital technologies set of
skills. So, one of the key impacts which has been seen, during that time was most of the e-
commerce entities observed that during international lockdown its online revenues enhanced. As
per the survey, 90% of firms see that its online sales maximises some, but 50% individuals
expects it may develops above 100%. But still 6% analysis that e-commerce business revenue
minimised during pandemic time (The impact of Covid-19 on ecommerce, 2021). After the
lockdown was over, various customers initiated shopping at mortar retailer again.
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(Source: The impact of Covid-19 on ecommerce, 2021)
Internal Analysis
Internal analysis is undertaken as the method to determine a firm’s assets, opportunities and
threats. Moreover, this is helpful to determine what has performed effectively as well as what
might be changed for creating efficient outcomes in upcoming times. Additionally, there are
varying structures which businesses may consider in performing the internal analysis for
reaching a useful conclusion. So, to evaluate and analysis the impact of corona virus (COVID-
19) and internal analysis, the marketing manager of Amazon conduct SWOT Analysis as it is
consider as one of the popular framework:
SWOT Analysis of Amazon
The darkness of COVID-19 still intimidating year 2020 that seems a grim period to perform
SWOT analysis for various firms - but not for Amazon. Within this, Amazon SWOT analysis
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represents some challenging but however remunerating year for Amazon. SWOT examination is
considered as the logical portrayal of qualities, shortcomings, openings and dangers. In below
discussed SWOT analysis, the context is Amazon retain their position as one of the Big Four
Company within technology sector. Also, with stock process hitting records higher of $3531.45
toward the beginning of September, 2020, Amazon has never looked for much hearty (Amazon
SWOT Analysis: 2020 a Year to Remember, 2021). So, the internal factors that enable their
success are described below:
Strengths:
Amazon obtained around $570 billion within market capitalisation at the time of pandemic.
Additionally, with overall capitalisation of $1.49 trillion, Amazon is surrounding their tech
competitors that are Apple and Microsoft (Amazon SWOT Analysis: 2020 a Year to Remember,
2021). So, in this respect, some strength are mentioned below:
Pandemic: Lockdown evaluates prompted consumers for shifting towards online shopping for
things it would for the most part have brought from retail locations. As per the report of Facteus,
customers spend around 70% year on year upon Amazon (Amazon SWOT Analysis: 2020 a Year
to Remember, 2021).
Market share: As per the e- marketer, Amazon has about 38.7% of web based business market.
Additionally, in around 2 among 5 individuals stores form Amazon. So, for providing the the
extent of Amazon predominance, Walmart which is in second position have just 5.3% of internet
business market (Amazon SWOT Analysis: 2020 a Year to Remember, 2021).
Diversification: Beside form e-commerce, Amazon is one of the main players into digital
streaming, artificial intelligence and cloud computing. As per the Canalys’s report, respective
organisation cloud stage AWS have around 32.4% of piece of the pie. furthermore, in light of the
Forbes, it real time stage Amazon prime video has infiltration of about 52.9% (Amazon SWOT
Analysis: 2020 a Year to Remember, 2021).
Weaknesses
Weaknesses are one of the restricting variables that Amazon has absolutely or halfway control
upon. Within moving toward higher level, Amazon has developed few critical compromises
which might hinder their growth. So, some representations of those internal problems are
described below:
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Seller relations: Sellers upon Amazon are focused regarding new advancements into stock
stockpiling limits, speedier conveyance requests, dangers from "dark hat” activities as well as
competition from private products label of Amazon. In case these concerns are not addressed,
Amazon would drop down of favour mainly when anti-Amazon firms like Shopify, Esty,
Walmart and other are nibbling at Amazon’s heals.
Quality focus: Amazon has their focus upon optimising the search of products, ease of buying
and conveyance speed. As a result, they can't notice the legitimacy of cases or items quality sold
upon their foundation. Also, it might outcomes into individuals migrating towards platforms with
higher reliability.
Work culture: Staff describes the work culture of Amazon as hyper- competitive, decisive,
insensible and inequitable. Moreover, they additionally refer to an absence of acclaim, affront for
balance between serious and fun activities and absence of advantages as one more angles with
those they are not fulfilled
Opportunities
Innovation is one of the key reasons of Amazon’s success during COVID-19. From 118 in year
2010, the various licenses allowed to Amazon have taken off over multiple times to 2054
(Amazon SWOT Analysis: 2020 a Year to Remember, 2021). So, the following are not many new
freedoms Amazon's creative culture spikes are described below:
Package delivery: Morgan Stanley has anticipated that by year 2022, the conveyance
organization of Amazon would obtain$100 billion worth of business from the US postal services,
FedEx and UPS. Presently they plan to introduce 1500 delivery hubs within cities as well as
suburbs across countries (Amazon SWOT Analysis: 2020 a Year to Remember, 2021).
Amazon Fresh: Respective organisation’s current undertaking, Amazon new gives consistent in-
store just as internet shopping expansion to reliably lower costs. Moreover, with their initial store
already open for selective consumers within Woodland hills, California, Amazon fresh store
might be a game changer for them.
Podcasting: Currently, Amazon has fused a webcast administrations with their music stage.
Also, the new moves aim to nibble into Spotify's just as Apple share as driving podcasting
offices. This help would perform adequately with Amazon's Alexa.
Threats
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The threats of Amazon are adverse factors beside the confluences as well as control of Amazon,
Moreover, with Walmart, respective firm’s biggest rivals, gear up for a brawl for market share,
there is difficulties into paradise. Within current times, some threats for Amazon are discussed
below:
Government regulations: Amazon faces the enhancing pressures from government to be
considered liable for harms fake things outsider dealers sell by Amazon cause. As of now, the
court decided that individual firm is responsible for actual injury just as harm of property that
results from a blast which a fake battery sold upon Amazon caused..
Quality control: In year 2021, based upon the Statistics, outsider venders' record for around 53%
of the items sold upon Amazon (Amazon SWOT Analysis: 2020 a Year to Remember, 2021).
Moreover, into a legislative hearing, Jeff Bezos conceded towards the odds of even taken items
being sold upon Amazon (Amazon SWOT Analysis: 2020 a Year to Remember, 2021).
Additionally, the lack of responsibilities as well as supervision might drives towards a drop into
trust.
Competition: Walmart reported the Walmart satisfaction administrations. So with dispatch,
outsider vender presently has an option in contrast to Amazon. However the holes into piece of
the pie among Amazon as well as their closest competitor is large and the gap is anticipated for
shrinking within years to coming one.
External Analysis
External analysis is also called the environmental analysis. Moreover, it is regarded as the
procedures through that business can able to evaluate the modifications formed to its sector as
well as wider world which might impact its present operation of business. Additionally, this
concentrates upon how external factors like industry trends impact the business and their success.
So, for analysis the impact of COVID-19 external analysis is conducted by Amazon’s marketing
manager with assistance of PESTLE Model.
PESTLE Analysis of Amazon
PESTLE Analysis of Amazon, which is known as the leading American retail e-commerce, tech
and cloud company firm. Additionally, Jeff Bezos is the founder of Amazon which is founded in
year 1994. Its headquarters is located in Seattle, Washington. Moreover, they outsmarted their
huge competitors Walmart through obtaining more market share in year 2015. The Amazon’s
business model that incorporates three parts:
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 Amazon retail operations
 Amazon Marketplace
 Amazon cloud computing
The mission and vision statement of Amazon is “To become much consumer centric firm as well
as an online platform in which individuals may purchase anything. Additionally, all things that
customer’s required and endeavour for providing their consumers the lower possible prices. In
addition to this, it employs around one million individuals all over the world by July, 2020 end
during COVID-19 pandemic. Furthermore, the entire income of element in year 2019 was
280.522 billion US dollars, its working pay was 14.541 billion US dollars and among that new
income was 11.588 billion US dollars. So, the new value of it asset in year was about 225.248
billion dollars. PESTLE Analysis is performed by Amazon’s marketing manager as it represents
that how various external factor have impacts over their business performance (PESTLE Analysis
of Amazon, 2021). All factors are as follows:
Political factors:
These elements assess the degree to which an administration can impact the economy or a
specific sector. Moreover, these involves inancial arrangement, exchange duties, charge
approaches and numerous others which an administration can collect around monetary year as
well as this may impact the business environment at huge extent. Some political factors are: The
Amazon advantages from political stability. Within framework of PESTLE analysis, the
particular situations that develops an opportunities for firm to explore or diversify their ventures
within developed countries. Such as, Amazon might explore their brick-and-mortar practices into
U.S. to supplement their web based business. While on opposite side, outside component of
entire government help for online business is additionally attempted as happenstance. Moreover,
administrative help delivers Amazon's normal extension into particular marketplace. In addition
to this, the similar external factors threaten entity due to enhancing competition like those
including Chinese online retail entity which is exploring its practices. Nonetheless, government’s
developed situation of business by potential to fight cybercrime. also, the particular PESTLE
aspects of Amazon represents key opportunities which firm may exploit to maximise their
resilience into remote or macro environment of IT service and e- commerce sector.
Economical factors:
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Respective factors determine the performance of economy which directly affects a firm as well
as have reasons for longer term impacts. It incorporates interest rates, economic growth patterns,
inflation rates and so on. Moreover, the performance of Amazon based upon the economies
situation in which they perform their online as well as offline businesses. Additionally, the
impacts of economic trends as well as modifications upon remote or external environment are
undertaken into this PESTLE analysis model aspect. Under case of Amazon some economical
factors are as follows:
 Financial soundness of created markets, particularly the U.S. also European nations
(opportunity)
• Expanding expendable salaries in emerging nations (opportunity)
• Possible financial downturn of China (danger)
The developed nations economical stability enhances the likelihood of development for Amazon.
Depends upon the PESTLE analysis model, the particular circumstances reduces economical
problems into remote or external environment, hereby reducing risks to firm’s online retail
business development. Moreover, particular firm additionally have development openings is
creating nations. Such as the maximising disposable incomes to developing markets may
enhances entity’s monetary performance. Furthermore, the potential China’s economic recession
threatens their business. Also, the China is considered as one of the huge markets which the firm
desires to enhance penetrate. Depends upon external factors in particular PESTLE investigation
part of Amazon's chances for development into non-industrial nations ought to be incorporated
with business’s strategy formulation.
Social factors:
Respective factors examine the societal environment of marketplace as well as gauge
determinants such as demographics, cultural trends and others. The social situations are
determinants of Respective firm. PESTLE analysis models aspects determines that affect of
social changes or patterns upon element's presentation as driving web-based retailers and
facilitator of IT services. Also, undertaking those patterns into remote or large scale climate, they
faces some socio-cultural factors:
Expanding abundance divergence (danger)
• Expanding commercialization in non-industrial nations (opportunity)
• Expanding web based purchasing propensities (opportunity)
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The enhancing wealth difference considered as gap maximisation among rich and poor within
various countries. Moreover, PESTLE analysis undertakes like socio-culture trends a threats
against Amazon in respect to potential disposable income levels stagnation as well as
correspondence stagnation of remote or external environment of sector. in addition to this, higher
disposable level of incomes are much favourable in maximising e-commerce firm’s potential
revenues. Additionally, a maximisation consumerism level which forms opportunities to develop
e-commerce and information technology service ventures. Such as higher consumerism is
enhancing markets that maximises the potential growth for Amazon’s generic strategy for
competitive strategies for development, as entity seeks for expanding their international online
retail practices into those areas. In context, firm stands to advantages from enhancing online
purchasing habits as many individuals across the world consider purchasing items by internet.
Also, the external factors within PESTLE analysis represents the advantages of concentrating
upon market penetration as well as expansion into developing countries.
Technological factors:
Respective factors generally pertain towards innovations within technology which can impact the
operations of sector as well as market in both positively or adversely. It is related to
computerization, research and improvement, and how much innovative mindfulness which
market has. The upgrade of innovation directly impacts Amazon that undertakes technology
centrality within their business. Moreover, technologies consequences and associated trends
upon remote or macro- environmental are undertaken within PESTLE investigation of internet
business firm. The innovative outer variables are fundamental into Amazon business are:
• Quick mechanical outdated nature (danger and opportunity)
• Expanding efficiencies of IT assets (opportunity)
• Expanding paces of cybercrime (danger)
Amazon faces a few dangers of quick mechanical outdated nature that force upon firm to
regularly form their technology assets. Additionally, in respect of particular PESTLE analysis,
those situation is also an opportunity to optimise the business. Such as the business’s continues
huge investment into IT that may boost their competitive edge as well as safeguard business
from new entrants within e-commerce sector. In addition to this, respective organisation also
have opportunities for further develop their performance depends upon rapid maximisation of
Information technology resources effectiveness. For it, new computing technologies may
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enhance online retail productivity as well as reduce operative costs. Furthermore, the entity can
also face constant cybercrime threat. Also, particular external factors threaten consumer
experiences quality also respectability of Amazon's business. In this manner, imperative interest
in powerful innovative measures is pivotal to company's drawn out maintainability rather than
innovation associated problems within sector’s remote or macro environment. Depends upon
particular PESTLE analysis, they required to focus upon continuous development of their
technologies.
Legal factors
Respective factors have both outside just as inward perspectives. Besides, there are particular
regulations which impact the environment of business into certain country while there are some
policies which firms have to maintain for it. This includes safety standards, labour laws and
others. Within e-commerce operations, Amazon should adhere towards legal needs. Moreover,
the impact of those legal norms on remote or external environments which are ascertained in
context of PESTLE investigation model. In individual association, the accompanying lawful
outer elements are as per the following:
• Rising item guideline (opportunity)
• Changing import and product guidelines (opportunity)
• Rising natural assurance guidelines on organizations (opportunity)
Enhancing legislation of products is considered as an outcome of societal needs upon customers’
safety as well as security. Within PESTLE examination model, this outer variable creates
openings for Amazon for intensifying their potential to minimise sales upon their online retail
websites. in addition to this, the entity have opportunities to develop, depends upon the external
factors of modifying exports as well as imports legislations. Such as, Amazon may explore their
international practices for exploiting the enhancing capabilities of sellers for accessing overseas
supplies. Additionally, the e-commerce firm have opportunities for strengthening their reputation
of brand by effective CSR policies which address enhancing environmental protection norms.
Those efforts may maximise business competitiveness within remote or external environment.
Depends upon the particular aspects of PESTLE analysis model, Amazon may assures that
longer term e-commerce growth by regulatory compliances.
Environmental factors:
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Respective factors incorporate whole those aspects which influences or are ascertained through
surrounding. Additionally, this PESTLE aspect is vital for specific sector specifically e-
commerce, tourism and so on. In addition to this, the business environmental factors that
includes but is not restricted to weather, global changes, climate and many others. Although,
Amazon is essentially an online business, their practices are subjected towards natural
environmental influences. PESTLE analysis’s model aspects highlights how firm’s remote or
external environments associates with ecological modifications. Additionally, they undertake
following macro-environment factors into their vital definition:
• Rising interest in ecological projects (opportunity)
• Rising accentuation on business supportability (opportunity)
• Expanding prevalence of low-carbon ways of life (opportunity)
Amazon has freedoms to develop their ecological affects in response towards raising interests
into environmental programs. Moreover, those interests are direct environmental challenges
impacts like energy consumption and waste management. Additionally, while depending upon
the external factors, the development within Amazon’s CSR strategy that might maximise the
environmental effects of business. In context, PESTLE analysis represents key opportunities into
business area sustainability. Such as high standard sustainability may in future develops
environmental affects as well as strengthen reputation of brand of e-commerce firm, depends
upon business strengths which determined into Amazon’s SWOT analysis. In addition to this, the
enhancing popularity of lower carbon lifestyles that renders the opportunities for entities to boost
their business reputation as a leader within e-commerce sector. Also, the firm might executes
extension energy saving policies into their practices for this intent. the particular PESTLE
analysis of Amazon’s aspects represents the effectiveness of comprehensive CSR strategy to
maximise the skills of firm to address the environmental concerns their remote or macro-
environmental.
CONCLUSION
As per the above report, it has been concluded that marketing plays vital role within
organisation. This is so this is the methods for manufacturing products & services based upon the
consumer have needs as well as facilitate information through utilising effective tool and
techniques of promotion. The reason behind this is that person may buy goods and attain
objectives on specified time. In addition to this, marketing fundamental signifies the procedures
10

through those individuals that can concentrates upon accomplishing the requirements and desires
of consumers by exchanging items as well as also renders values to other person. Moreover, the
COVID pandemic emergency has constrained different organizations for delivering the many
years old conventional plans of action or face shutting for all time. But one of the key positive
impacts which has been seen, during that time was most of the e-commerce entities observed that
during international lockdown its online revenues enhanced. Additionally, internal analysis is
performed with assistance of SWOT framework as this is helpful for determining what has
performed effectively as well as what might be changed for creating efficient outcomes in
upcoming times. In addition to this, external analysis is conducted with assistance of PESTLE
framework as this concentrates upon how external factors like industry trends impact the
business and their success.
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Online
The impact of Covid-19 on ecommerce. 2021. [Online]. Available through:<
https://ecommercenews.eu/the-impact-of-covid-19-on-ecommerce/>.
Amazon SWOT Analysis: 2020 a Year to Remember. 2021. [Online]. Available through:<
https://pestleanalysis.com/amazon-swot-analysis/>.
PESTLE Analysis of Amazon. 2021. [Online]. Available through:<
https://swotandpestleanalysis.com/pestle-analysis-of-amazon/>.
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