Business Environment of Amazon

Running Head: MANAGEMENT 0
BUSINESS ENVIRONMENT

MANAGEMENT 1
Executive Summary
This report outline about the external factors in the business environment of Amazon.
Amazon is one of the largest American electronic commerce founded in 1994. There are
various external forces that impact directly on Amazon profitability and success. These
external forces are divided into political factors, economic factors, social factors,
technological factors, legal factors and environmental factors. Some of these are beyond the
control of management and thus the company needs to develop adequate strategies to gain
competitive advantage in the industry. The company internal strengths and weakness also
being identified with the help of SWOT tool.
In section two of the report, economic factors such as supply and demand, market and
competitors are also being identified. Some of the competitors of Amazon includes Walmart,
Alibaba and eBay. In last, necessary recommendations are being made such as adopting the
approach of bullwhip, building unified IT system and publishing an interactive map of tools
in extent with fulfilling legal obligations.

MANAGEMENT 2
Table of Contents
Introduction................................................................................................................................3
PESTLE analysis of Amazon.....................................................................................................3
SWOT Analysis of Amazon.......................................................................................................6
Economic Factors.......................................................................................................................7
Legal Factors..............................................................................................................................8
Recommendations....................................................................................................................10
Conclusion................................................................................................................................11
References................................................................................................................................12

MANAGEMENT 3
Introduction
Business environment in today’s world is becoming dynamic and complex as it is
surrounded by various external forces having significant impact on the decision making of an
organisation (Smith, Binns & Tushman, 2010). In addition, the external environment of the
organization is constantly changing in relation with consumer preference, change in
technology (technological advancement) and market competitors. In addition, business
environment is largely uncertain and it’s different from market to market. With regards to
this, there are both opportunities and threats present in the business environment and it is up
to the organization, how they exploit necessary opportunities as well as exclude threat.
To understand the business environment explicitly, Amazon is selected as an
organisation, which is one of the biggest e-commerce company in the domain with having
operations in more than 16 plus countries. Amazon yearly revenue for 2018 was $232.887B,
a 30.93% increase from 2017 (macrotrends.net, 2019). As per the report of 2018, Amazon
has employed 6,47,500 employees in its organisation. As Amazon operates in more than one
country, the company have to face several challenges in the business environment and in the
same way, they also gain various opportunities such as their intensive diversification into
private label products, cloud computing and so on.
The business environment can more effectively understand with the help of PESTLE
and SWOT tool.
PESTLE analysis of Amazon
PESTLE analysis is a comprehensive tool to help in analyzing various external forces
in the business environment. It stands for Political, Economic, Social, Technological, Legal
and Ethical.
Amazon business environment can be said to more complex and dynamic as the company
operates on a global scale and in various countries. For every country or market, the external
force will be different due to legal obligations, customer culture and preferences and so on
(Matten & Moon, 2008). The PESTLE analysis of Amazon is elaborated below -