Critical Evaluation of Amazon

This critical evaluation of Amazon analyzes the organization's success in the Indian market, challenges faced, and strategies implemented. The article discusses the company's entry into the Indian market, its innovative business tactics, and its competitive advantages. It also examines the challenges faced by Amazon in India, including the rigid government policy on FDI and low usage of credit cards. The article concludes with a PESTEL analysis and a Porter's five force model analysis of Amazon India.

Critical Evaluation of Amazon 0
Title: Critical Evaluation of Amazon
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Critical Evaluation of Amazon 1
Contents
Introduction................................................................................................................................2
Critical Evaluation of Amazon India.........................................................................................2
Conclusion..................................................................................................................................8
References..................................................................................................................................9

Critical Evaluation of Amazon 2
Introduction
International Strategic Management is a process of planning that has to be conducted
for the development of international strategies that have the main objective of achieving
organizational competency and resources to operate in the global environment and in the
region it is focusing on. The international strategic management has the main aim of
understanding the scenario of the international market to build strategies that are effective for
creating a strong niche in the targeted region. This is the only way through which an
organization is able to expand on the foreign lands and compete in the international market.
The process of strategic planning is the core process of developing in the international
market. According to studies, if an organization has a bigger exposure to the activities of
globalization, the higher are the chances of success and survival of the organization. The
organization Amazon was founded on July 5, 1994. The organization has successfully
survived for over 24 years and is functioning in almost all the continents. The company was
founded by Jeff Bezos and now the country is one of the largest internet retailers. Apart from
the retail business, the company functions in different areas like Amazon Kindle, Amazon
Prime, and many other businesses. Amazon entered the Indian market in the year 2013 in
June. The organization since then has been functioning effectively and is one of the top
internet shopping sites in India. The company has spread its branches in many new regions
and it is also considered as the third most valuable company in the public in the United States
of America, after the organizations Apple and Microsoft. So, the organization holds a huge
dominance in the market, which it uses to conduct business in different regions too.
Critical Evaluation of Amazon India
The American e-commerce company entered the Indian market in 2013. Four years
from now, the organization did not have any infrastructure in the Indian market, but the
company transformed itself and worked over its international strategies and have a huge

Critical Evaluation of Amazon 3
dominance in the Indian market (Bille Larsen, 2011). Though it was assumed that the
organization will not survive in the Indian market, but the founder of the organization Jeff
Bezos focus was to capture the Indian market. The main reason behind focusing on the Indian
market was the huge population of India which was four times the United States and double
of entire Europe. Also, the yearly growth rate of users in India is the highest, with
approximately six million users being added to every month. Amazon has successfully built
an e-commerce market in India and this has been achieved by the organization through
complex business tactics that are innovative and are extremely efficient. The Indian market
size is very huge and thus the organization has utilized it to its benefit, and since then have
conquered the Indian market (Charbel, Elie and Georges, 2013).
Foreign direct investment is the investment that is made by an organization in a
country or region where it wants to operate and conduct business. Foreign direct business is
conducted when an investor acquires or establishes the assets and the operation in a foreign
land. The organization Amazon started testing the Indian market from the year 2012 in
February (Chelekis and Mudambi, 2010). The organization launched the Junglee.com, this
was a comparison shopping site which provided the sellers to upload the catalog of their
products, which the company Amazon promoted. This also facilitated the Indian customers to
understand the different prices of the same commodity. The sellers would compare the
product prices and then finalize on the product they want to purchase and the final purchasing
would take place on the seller’s site (Chua, 2011). This was a very good move by the
organization Amazon as this helped the organization to understand the interest of the Indian
buyers in the e-commerce and also it helped the organization in understanding and
formulating their pricing strategy. This testing of the organization through a comparison site
also facilitated the organization with the sellers’ market of India. The launching of the
Junglee.com by Amazon was also conducted as in India 100% foreign direct investment is

Critical Evaluation of Amazon 4
not allowed in e-commerce. But it was further a great move by the organization as this helped
the organization in building credibility in the Indian market. This approach of the
organization of launching Junglee.com was also very much needed as the organization’s
debacle in the market of China and Brazil. Amazon has affected the inflation in the entire
world. This is due to the reason that the organization has disturbed the traditional retailers and
have increased the demise of the retailers who were already struggling in the market (Gowri,
2018). The organization does not have a storefront like the other retailers and the overhead
cost of the company is also low in comparison to the retailers. This has helped the
organization Amazon to undercut the prices of the product and to conduct business on a
super-thin profit margin. The organization has had a deflationary impact on many economies
(J S and P, 2016). Which further resulted in more unemployment in the market. Though, this
has also increased the competition in the market. In the year 2014, after examining the
repercussions that the e-commerce was having on the market the Amazon India introduced
opportunities for struggling sellers who can sell their products immediately from the site just
after registering on the Amazon e-commerce. The other initiative that was taken by the
organization was the “easy ship”, which helped the sellers with easy delivery services. All
these approaches of the company have been taken to help the economy grow. So, the
organization strategy has helped it in building a market that is more dependent on Amazon
(Khalife and Chalouhi, 2013).
The industry of e-commerce is made of six components excluding the management
team and the organizational development, which are the market opportunity, competitive
market, value proposition, competitive advantage, revenue model and market strategy
(Klumbyte and Apanaviciene, 2014). The organization Amazon has excelled in the India
market because of its competitive advantages and utilizing them effectively. The value
proposition of the organization helps in attracting customers. The Amazon India targeted

Critical Evaluation of Amazon 5
even the remote areas where there was no facility of internet. The organization made mom &
pops as their delivery partners (Mosadeghrad, 2012). This helped the customers who do not
have access to the internet, can go to their store and use the internet to place their orders. This
strategy has not been used by any of the competitors of Amazon India. This initiative helped
in the increase in the sale of the store owner. Also, the extent to which the organization
Amazon was going, helped in creating a bigger brand image. Though, the main target market
of the organization is the middle class and upper class people who have the knowledge of
technology and have easy access to it, but knowing the Indian market the organization went
ahead with its approach of reaching the remote areas too (Phillips-Connolly and Connolly,
2017). The aspect that helped the organization in getting a tighter grip on the Indian market
and to stay ahead of its customers was the catchphrase “Aur Dikhao” that means show more,
which helped in building a distinctive place in the mind of the customers which none other
competitors were able to do (Pratap Chandu, 2014). The organization CRM record helped the
organization in understanding the purchasing power of the customers. The organization
provides offers to customers who view a particular product frequently and thus Amazon
provide a discount on it, forcing them to buy it. This strategy helped the organization to cater
to the competitive market and helped in transforming potential customers into loyal ones.
Amazon is involved in the selling of a variety of products that too at low prices (Shohet and
Lavy, 2017). Now, the government of India has announced to help the foreign company by
helping them in the manufacturing of products in India. This came as a challenge for Amazon
as in the US the organization have their own inventory of books and toys, but to start
producing their own product in India will be challenging for the organization, especially
when it is a mediator between the sellers and the buyers in India (Stronza, 2009).
The organization also faced a lot of challenges in the initial structuring of the
organization in India. The biggest one amongst it was the population share in India that have

Critical Evaluation of Amazon 6
the facility to the internet. Now, more than 67% of the population of India live in remote
areas where there is no facility of internet. This was a higher percentage of people that are
more than half the population, so it was important for the organization to implement
strategies that focus on the people who were living in the remote areas. The only rising hope
at this point in time was that more than 65% of the population of India that was under the age
of 35 have ownership of mobile phones. This was the main driving force for the organization
to step in the Indian market. The organization also has to change their payment policies. In
India, less than 12% of the people use a credit card. Now, the organization in the US have all
the transactions through online payment. But for India, the organization has to introduce the
“cash on delivery” service. The biggest challenge which the organization faced was due to
the rigid government policy of India on FDI, which restrained the organization from
functioning freely and this forced Amazon to think of innovative strategies to tackle the
emerging issues due to strict FDI (Wadhwa, Vashisht and Kaur, 2017).
According to the micro analysis of the organization, Amazon India, this can be
formulated that the organization has struggled majorly in the initial stage of the organization
structuring. This has affected the decisions of the organization, their market strategies and the
performance of the organization. The organization’s decision making process got affected
due to the adamant FDI policy of India and also due to the low usage of the credit card in
India. This was a huge change from the company’s operating policies in the United States.
Also, this enabled higher risk for the organization (Amorim Neto, Satyamurty and Correia,
2015).
The macro analysis of an organization that is also known as the PESTEL analysis is
conducted in six different aspects that include political, social, economic, technological,
environmental and legal. According to the political aspect, India has a huge dominance of
politics in each and every field. The organization is not used to such instabilities and

Critical Evaluation of Amazon 7
uncertainty, also the working environment of India is completely different from the US and
this was a major threat that the organization continues to face. Also, the support of the
government to the e-commerce is fairly less in India in comparison to the other countries. For
example, the backlash that was received by Walmart in India was huge, so for Amazon, the
political threat will always continue (Baugh, Ben-David and Park, 2014). According to the
economic aspect, the organization approach of testing the market of India with the
Junglee.com was very appropriate. It helped the organization in understanding the rapidly
increasing users to e-commerce in the Indian market. Also, though the recession has impacted
the whole world, in India it had less effect in comparison to the other developed countries.
So, the organization will prevail due to the economy and the high population of the company.
India is a very traditional and cultural country, which is not used to adapting to changes so
easily. The e-commerce will kill the traditional shopping and will result in affecting the
culture of India. The organization would have suffered a lot, but the initiative of the
organization of providing opportunities to the sellers to sell their product on their site helped
the organization massively. The main fight of the organization in India was due to the clash
between technology and population living in remote areas (Doughty, 2011). This was a major
threat to the organization, but it successfully turned it into an opportunity through their
approach of joining hands with mom and pops store. The organization has reached out to
people living in remote locations through this initiative that has been very beneficial for the
organization. The organization has given huge importance to environmental safety and
sustainability (Erazo, 2016). Like its initiative of low carbon lifestyle, the organization has
followed in India too. Also, another thing that has helped the organization in becoming more
credible is its engagement in the various environmental programs. The organization faces a
huge uncertainty due to the laws that are related to e-commerce in India. India is a developing

Critical Evaluation of Amazon 8
country that enforces new laws from time to time and thus the adjustment of the organization
to all these uncertainties has been challenging for the organization (Malczewski, 2011).
According to the PORTER’S five force model on the Amazon India, there is a threat
of substitutes. India is a developing country, many multinational companies have a focus on
investing in its market. The market structure of India is unique that pushes new organizations
to invest in it. Also, the current forces that are present in the market are very power
substitutes and it will only a few nice offers to shift the market from one organization to
another, it is due to the fickle mind of the e-commerce customers. The PORTER’S analysis
has a main focus on the competition, substitutes and the power of the suppliers and the
customers. The power of the suppliers in India is low as there are a number of other suppliers
who are available in the market with products at less price (Soucy, 2011).
Conclusion
According to the complete analysis of the organization in the home country and in
India, this can be formulated that the organization has to make a number of modifications to
survive in the Indian market. The organization has worked on its competitive strategies
keeping min the purchasing power, the payment method and the rich culture of India. This
adaptation of the organization to the Indian trends and also the innovative approaches have
helped the organization majorly in conquering the Indian market. One aspect that is common
in the Amazon.in and Amazon.com is the company’s competitive advantage approach in both
the markets. After failing in the market of China and Europe, it was important for the
organization to make correct decisions. Thus, the organization’s approach to launching a
testing website was the best decision. The organization continues to hold control on India, but
it has to continuously work on its strategies as there are a number of new entrants in the
Indian market with a better strategy.

Critical Evaluation of Amazon 9
References
Amorim Neto, A., Satyamurty, P. and Correia, F. (2015). Some observed characteristics of
frontal systems in the Amazon Basin. Meteorological Applications, 22(3), pp.617-635.
Baugh, B., Ben-David, I. and Park, H. (2014). The 'Amazon Tax': Empirical Evidence from
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economies: The case of Avon in the Amazon. Journal of International Management, 16(4),
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Chua, A. (2011). How Web 2.0 supports customer relationship management in
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Doughty, C. (2011). An In Situ Leaf and Branch Warming Experiment in the
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Erazo, J. (2016). Saving the Other Amazon: Changing Understandings of Nature and
Wilderness among Indigenous Leaders in the Ecuadorian Amazon. Humanities, 5(3), p.60.

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Gowri, T. (2018). Sentiment analysis on Amazon Reviews Data. International Journal of
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J S, S. and P, S. (2016). Progressive Data Analytics in Health Informatics Using Amazon
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Soucy, B. (2011). Taxing Amazon: The Problems with the State 'Amazon' Taxes and the
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Stronza, A. (2009). Commons management and ecotourism: Ethnographic evidence from
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