Internal and External Stakeholder Analysis 2022

8/20/2019
Running Head: BUSINESS ENVIRONMENT 0
Internal and External Stakeholder Analysis

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Executive Summary
 Stakeholders have a significant influence over the business functioning of an
organisation. Amazon is selected for the stakeholder analysis and some of its key
stakeholder includes customers, suppliers, government, media, board of directors and
managers.
 It is important for Amazon to cater the different needs of all stakeholders in order to
gain competitive edge in the e-commerce industry.
 In this report, various functional areas of Amazon also being explored namely design,
finance, marketing, research and development communication, engineering and so on.
 A power-interest stakeholder matrix has been drawn depicting each stakeholder
position and interest.

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Contents
Introduction..............................................................................................................................3
Functional Spaces.....................................................................................................................3
External and Internal stakeholders with their roles.............................................................5
External stakeholders of Amazon.......................................................................................5
Internal stakeholders of Amazon........................................................................................6
Nature and degree of key stakeholders’ interests, and implications of conflicting
interests.....................................................................................................................................7
Level of key stakeholders’ influence.......................................................................................9
Stakeholder matrix.................................................................................................................10
Contrast with another industry............................................................................................11
Conclusion...............................................................................................................................12
References...............................................................................................................................13

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Introduction
In this competitive business environment, e-commerce industry and brands are
focusing heavily on personalisation in winning trust of customers so that to increase
conversion rates and customer loyalty (Akter & Wamba, 2016). Amazon is one of the leading
e-commerce organisation that offers a personalised platform to its users and customers by
offering various products to its customers. The company is also known for its consistent
innovation from its commencement i.e. 1995. This helps the company to revolutionize the
way people shop in today’s world. Amazon mission is to provide the consumers lowest price
possible, higher convenience and best available selection. In addition, the organisation vision
is to be planet most customer centric organisation, where customer can explore and explore
anything they look for purchase online (Treanor, 2010).
At present, Amazon functioning and extended its network in more than 16 countries
and employed around 6, 50,000 employees all over the world. In 2018, the company revenue
was standout to $232.88 Billion. In comparison with 2017, it is increased at 30.93%
(statista.com, 2018). With increasing diversification, Amazon is also planning to expand its
private label efforts with having a loyalty of 100 million prime members. Considering
stakeholders expectations, diversification and consumer economy with “paradox of choice”,
private label brands make the selection process smart and simple (Wheeler, 2017). Several
Amazon private label brands have seen tremendous growth includes Amazon Basic, Amazon
Elements and some devices of Amazon such as Kindle, Fire Stick and Echo Alexa.
Functional Spaces
The key elements of firm structure compositely develop functional areas. The growth and
success of organisation goals based on the capability of enterprise to develop strategies and
management plans for effective implementation on functional level of management (Zheng et
al, 2010). Hence, it can be said that organisation functional areas help in attaining set goals
and objectives formulated by top level management. Considering Amazon, the functional
areas that aid in supporting strategic business units across the targeted segment include –
 Human Resource – There are more than 6, 00, 000 employees in Amazon working
towards achieving strategic goal and vision of the organisation. The organisation

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ensures to draw the best talent from the industry and also pay focus on talent
management and career development, adequate compensation and benefits.
 Design – It comes under strategic decision area where the firm uses advanced
communication and information technologies to ensure that its online retail services
are conveniently and efficiently reached to the target consumers. These technologies
are used to assist maximum efficiency in relation with Amazon e-commerce
operations.
 Communication – This functional area includes timely communication of relevant
information to shareholder and employees about various plans and prospective of the
organisation. It can include, introduction of new services, any sort of diversification
and so forth.
 Engineering – In each business unit of Amazon, this function exists. As Amazon has
its various private label brands, this functional area usually includes manufacturing,
management of facilities and packaging development.
 Finance – This functional area support Amazon plans, divisions and other functional
areas to help the company in bringing innovation and creativity in the marketplace so
as to attain competitive advantage in the industry. Amazon annual operating expenses
for 2018 were $220.466B, a 26.88% increase from 2017 (macrotrends.net, 2019).
 Legal – As Amazon is having its root in many countries, this functional area manages
business transaction of Amazon related to intellectual property law. It also clears the
way to various significant function of the company such as marketing requirement,
infrastructure management and so on. For example, China has increased standard
wages that bind Amazon to pay minimum wages set by the government.
 Information technology – This functional area of Amazon ensures that company
operations are undertaken efficiently and smoothly by linking all the work to system
and cloud. Amazon has its own cloud services i.e. AWS, that help the company to
save a lot of cost by not getting cloud services from other vendors.
 Sales and promotion – In this functional area, the team developed various plans to
increase their target market while raising market share in the e-commerce industry. In
2017 Amazon wielded an annual marketing budget of $10.070 billion dollars
(spinutech.com, 2018).
 Research and Development – This functional area helps Amazon to gain
competitive edge in the sector with creation of innovation and creativity. It includes

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constant scanning of the business environment to comprehend customer demand
effectively. Amazon expended closely $23 billion on R&D last year (Molla, 2018).
 Quality Assurance – It assesses whether Amazon services are offered with fulfilling
of high quality standards or not. This brings more customer loyalty for the brand.
 International service – In this functional area, the managers in the organisation train
their people broadly to that they can be fitted into the organisation culture effectively
and in any area globally where the company have their operations.
 Regulatory affairs – This functional area ensures that Amazon fulfils all legal
requirements and services related regulations in the e-commerce sector. It also builds
positive relationship with the government agencies and authorities and helps company
in smooth running of their operations.
 Strategic planning – In this functional area, Amazon long and short term goals are
developed by senior executives and management that help the company to reach
closer towards its vision.
External and Internal stakeholders with their
roles
A stakeholder is any individual or entity that show concern in the achievement and
failure of business. The internal and external stakeholders are listed below –
External stakeholders of Amazon
The list of external stakeholders of Amazon includes consumers, government,
suppliers and competitors. The customers include both buyers and clients. The buyers are the
individual who purchases varieties of products online from Amazon e-commerce platform.
On the other than, clients of Amazon includes various individuals and organisation who use
Amazon services such as cloud computing and business. For instance, the top Amazon AWS
customers include Netflix, Facebook, BBC, ESPN and Liken din. These stakeholders have
key interest in Amazon new services related to cloud computing integration. In relation with
e-commerce customers, it was anticipated that by 2022 there will be 56 million Amazon
Prime Video subscribers alone in the U.S., and 122 million globally (Columbus, 2018).

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Government is the next main external stakeholder of Amazon who monitors and
control functions of Amazon with key regulations. As Amazon is in more than 16 countries,
it is important for the company to comply with all necessary and significant procedures laid
down by each of the government related to market sustainability, marketing and sales,
employee benefit and operations. The global expansion of Amazon raises its exposure to firm
government guidelines on taxation and licensing.
Amazon suppliers include private label manufacturer, Amazon product wholesalers,
import sources and craftsmen. They are responsible for sourcing products from various places
to fulfil the required needs of the customers. It was found that Amazon Has 1,029,528 New
Sellers This Year (feedbackexpress.com, 2019). This will lead Amazon to a competitive
advantage in the global e-commerce market.
Competitor also is considered as external stakeholder of Amazon as they have key
interest in watching Amazon strategy related to product and service innovation, market
development and differentiation. The biggest competitor of Amazon includes Alibaba,
Walmart, eBay and JD. These influence Amazon competitiveness in the marketplace and
force Amazon to adopt new strategies at new places.
Internal stakeholders of Amazon
In relation with Amazon, the key internal stakeholders of the company including its
managers, workers, board of directors and investors. Amazon almost takes the 50 per cent of
US e-commerce market by its world elite services and self-brand products. Amazon
employee collaborates with the company to work on innovative projects. On the other hand,
Amazon also provides various benefits to its employees such as Amazon.com employee
discount where they receive a yearly rebate on products sold and dispatched by Amazon.com.
In addition, Amazon career choice program also pre-pays 95% of tuition cost and associated
fees so that employee can emphasis on their studies and not the expenses (amazon.jobs,
2019).
The managers in Amazon also known as the coordinators and senior supervisor act as
a link to board of directors and workers. They develop monthly plans and policies and ensure
that it will effectively execute by each and every person working in the organisation. The
company synchronise individual goal with the strategic goal of organisation set on behalf of
Amazon vision and mission.

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Amazon is also one of the most valuable public enterprise in the world and this
attracts various investors to put fund in the enterprise. These investor’s funds help the
company in its expansion, market development, product development and diversification.
The investors of Amazon also involves in various programs and found solace in the company
profitable services all over the world including e-commerce platform and cloud computing.
Lastly, board of directors are constituent internal stakeholders of the firm whose key goal is
to share and communicate long term strategic goal to all departments of Amazon, employees
and various strategic units for its achievement. They ensure Amazon prosperity by
collectively directing the company affair, whilst fulfilling the appropriate interest of its
stakeholders and shareholders.
Nature and degree of key stakeholders’
interests, and implications of conflicting
interests
Stakeholders are commonly said to have an interest in an effort or enterprise based on
whether they can affect or be affected by it. The interest of them can be varied and many. The
most significant purpose for recognising and understanding stakeholders is that it allows to
recruit them as part of the effort. The nature and degree of Amazon key stakeholders interest
are elaborate below –
 Customers – As per vision of Amazon, the company is the most customer centric
organisation and therefore, the strategic goal of Amazon always direct in offering
premium services to its customers at affordable prices. However, customers can also
driver brand image positive or negatively. For instance, the company is being critics
recently as their Alexa product records children’s voices to create voiceprints of
millions of children’s (Tiffany, 2019). This requires Amazon to pay key attention to
their basic and higher needs as they have various choices in the other form of retailer.
 Government – The key government interest is to monitor Amazon policies and
practices in order to ensure that they are not harming to consumers or society in any
way and do all necessary compliances as per the rule of government. This directly
influences the Amazon stakeholders and board of directors and they need to change
their strategies according to the request of the government.

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 Shareholders – Shareholders holds a significant position for the growth and
expansion of Amazon. They are responsible for backhand fund as a capital for the
company and thus their interest is to get maximum return. Their interest needs to be
considered while business development. Jeff Bezos, Jeffrey M. Blackburn, Andrew R.
Jassy and Jeffery Wilke were Amazon's four major individual shareholders.
 Employees – Every employee interest and nature varies and Amazon consider their
employee as one of the important assets for the organisation. The company undertake
every way to fulfil their expectation and demand as they are one of the reasons to
bring innovation and creativity in the organisation. To increase performance of
employee, it is important to match rewards with employees need (Scroggins, 2008).
However, the conflict may arise when employee does not get adequate compensation
in the company.
 Managers – They are responsible for finding target market and demographics for
Amazon. However, their decisions may result in conflict with the investors or
shareholders related to product or market development. Therefore, it is very important
for senior management to administer such conflicts.
 Media – Media is also one of the most influential stakeholders in expression with
both economic and non-economic interest. Amazon business practices and operations
are monitored by Media and it is documented into report and newspaper. The conflict
may arise if Amazon does not reveal true information asked by media and then media
may post anything wrong about Amazon diminishing company brand image.
 Suppliers – Amazon is one of the big e-commerce organisation and the company
profitability and growth considered an advantage to the supplier. For Amazon,
Suppliers help the company to source the product from each and every place and thus
creates convenience for customers to buy the respective product. In relation to
conflicts, their interest may vary with needs of long lead times to perform the contract
and shorter periods for compensation.
 Competitors – Competitors in the e-commerce industry is continuously increasing
and with internalisation of markets, company like Alibaba also influencing Amazon
growth and sustainability. Hence, it is important for Amazon to bring higher
differentiation and product diversification to gain larger market share. However, the
company has successfully doing innovation considering various partnership and
association. For example, Cerner and Amazon announced a partnership intended to

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drive innovation by pairing Cerner health IT solutions with Amazon’s cloud
technology.
Level of key stakeholders’ influence
In relation with Amazon, the level of influence in case of employee is said to be low
as Amazon can easily hire new talented employees from various sources. However, being a
sustainable and prominent brand, it is important for Amazon to maintain harmonic
relationship with their employees and influence them to achieve organisation goal prior to the
individual goal. Shareholders also influence Amazon to remain competitiveness in the
marketplace so that to earn maximum return on investment. In addition, manager influence
important decisions of an enterprise in achieving organisation mission and vision.
In the e-commerce industry, consumers are also protected by various consumer
groups and laws and their impact Apple to provide superior quality products or they will
switch to the other competitors. This requires Apple to provide extensive range of services to
its customers. Considering next stakeholder i.e. the government also influence Amazon to
comply with necessary laws and regulations relating to employment practices and product
demands in the marketplace. It is also considered as one of the external threat to Amazon as it
can have negative impact on its functioning in a particular area.
There are fewer entry barriers in e-commerce industry and this creates a threat for
Amazon due to different business model of emerging and established companies. These
competitors influence Amazon in its growth and sustainability. Other than this, suppliers also
influence Amazon irrespective of its low power and because of this Amazon can positively
switch suppliers and stands outs with standard practices.
Lastly, the company brand image is also impacted by Amazon relation with the media
as Amazon can create positive in the minds of customers by doing appropriate marketing
through media channels.

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Stakeholder matrix
P
o
w
er
Interest
Governments
Shareholders
Customers
Competitors
Employees
Manager
LOW INTEREST, LOW
Suppliers
HIGH POWER, HIGH
HIGH INTEREST, LOW POWER
HIGH POWER, LOW
Board ofMedia
Distributors

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Contrast with another industry
In this comparison, Starbucks is selected as the company in the coffee industry
whereas Amazon stands out in e-commerce industry. The first differences in stakeholders can
be seen in government regulations. In case of Amazon, government ensures that customers
doing online shopping can get products at fair prices and the clients using their AWS cloud
gets full security relating to database. While in case of Starbucks, the government focus is
towards employee benefits and social wellness with focusing more on organic products. In
relation with customers, Starbucks customers get the services and product instantly and this
helps the company to do alteration in their offering as soon as possible. But in case of
Amazon, there is various mediator in their distribution system that makes it challenging for
Amazon to control all the aspects in delivery of final products to the customers.
Other than this, Amazon has various suppliers and the company act as a mediating
role in delivering the products to the customers. Being a leading company in e-commerce
industry, they set standard procedures for all its suppliers and they need to follow them duly.
On the other hand, Starbucks source its resources from several range of suppliers such as
farmers and have set Coffee and Farmer Equity (C.A.F.E.) Practices, these plans assist their
farmers grow coffee in a way that’s well for both planet and people. C.A.F.E. Practices is a
wide-ranging set of assessable standard.

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Conclusion
To conclude, Amazon internal and external stakeholders influenced company strategic
direction and mission. There are various functional areas of Amazon that help Amazon in
effective implementation of their short term goals and make the company closer towards its
vision. In this report, it was assessed that each and every stakeholder role is different from
one another and so their conflicts. Hence, it is important for management to recognise the
nature and degree of stakeholder interest and its related influence so as to plan for a better
future.
In last, Amazon is doing great while offering premium services to its customers and
sustained positive relationship with almost all its key stakeholders. This will help the
company to attain competitive advantage globally.

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References
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and agenda for future research. Electronic Markets, 26(2), 173-194.
amazon.jobs. (2019). The benefits on this page apply to regular, full-time employees..
Retrieved from https://www.amazon.jobs/en/benefits/us-benefits-and-stock
Columbus, L. (2018). 10 Charts That Will Change Your Perspective of Amazon Prime's
Growth. Retrieved from https://www.forbes.com/sites/louiscolumbus/2018/03/04/10-
charts-that-will-change-your-perspective-of-amazon-primes-growth/#6b99a2793fee
feedbackexpress.com. (2019). Amazon Has 1,029,528 New Sellers This Year (Plus Other
Stats). Retrieved from https://www.feedbackexpress.com/amazon-1029528-new-
sellers-year-plus-stats/
macrotrends.net. (2019). Amazon Operating Expenses 2006-2019 | AM. Retrieved from
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Molla, R. (2018). Amazon spent nearly $23 billion on R&D last year — more than any other
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research-development-rd
Scroggins, W. A. (2008). The relationship between employee fit perceptions, job
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dollars). Retrieved from https://www.statista.com/statistics/266282/annual-net-
revenue-of-amazoncom/

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Tiffany, K. (2019). Amazon is being sued for recording children’s voices with Alexa.
Retrieved from https://www.vox.com/the-goods/2019/6/14/18679360/amazon-alexa-
federal-lawsuit-child-voice-recording
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Zheng, W., Yang, B., & McLean, G. N. (2010). Linking organizational culture, structure,
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