Amazon Business Analysis and Case Study

The assignment requires students to conduct a SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) and PESTEL analysis (Political, Economic, Social, Technological, Environmental, and Legal) of Amazon's business. The case study focuses on Amazon's innovations and emerging needs in the context of home delivery services and crisis prevention, response, and evaluation. Students are also expected to apply empirical performance analysis of GARCH models with heavy-tailed innovations and identify criteria for multicriteria decision making based on SWOT/PESTLE analysis.

Managing Innovation in
Business

Executive Summery
This report is contains the information that how can innovation helps the business to grow and
develop more. This report gives the study of innovations used by the Amazon for expending its
business world-wide. This report explains the background of the Amazon and the history of the
company. Further the report containing the information of innovations of the company and the
effectiveness of them by evaluating the performance and capability of innovative thinking. By
the SWOT analysis is conducted to know the strengths, weaknesses, opportunities and threats.
Further PESTEL analysis is conducted to know the impact of the external factors on the business
of the Amazon.

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK...............................................................................................................................................1
Organisation Background and Innovation history......................................................................1
Existing innovations of the Amazon and their Performance and Capabilities............................2
Performance and Capacity of Innovations..................................................................................4
The Industry In 2019...................................................................................................................1
CONCLUSION................................................................................................................................2
REFERENCES................................................................................................................................3

INTRODUCTION
The meaning of the innovation is the something new. Innovation is the introduction of
something new and creative act which may have positive results for the predefined goals. This
report is analysing the innovation used by the Amazon and explaining the way of management of
innovation in the organization (Valentim, 2018). This report is evaluating the approach to
identify the key drivers of the inn ovation within an organization's business and business
environment. This report also gives the information to plan and prepare to introduce an
innovation to the industry. This study is explaining the knowledge transfer cross functional co-
operation to analysis and assess the innovation capabilities.
TASK
Organisation Background and Innovation history
Background
Amazon is an American multinational technology company and operating from Seattle in
the state Washington DC and established by Jeffrey Preston Bezos. The founder of the company
is a technology entrepreneur and investor and current CEO and chairman of Amazon. Amazon is
the largest E-commerce company and selling the retail products through the online market. It is
also the largest cloud computing company which is providing the platform to store the data
online. It was established in year 1994 as online book store (Dong, 2018).
The Amazon is the company who implemented too many innovations in its business. By
applying the innovations in the business makes the Amazon the largest E-commerce and colud
computing company. It was established as an online book store in year 1994. after this later on
Amazon started selling video on online platform by streaming and downloading with MP3
downloading and streaming (Zhu and Liu, 2018). With this previous innovation company started
selling the audio books, software, games, electronics, apparel, furniture, food, toys and jewellery.
The company was started the business with the online book selling and now it owns the largest
online market which is selling the retail products online and providing the artificial intelligence
technology to the customers. This shows the innovation of the Amazon in the business.
Innovation HIstory
It is difficult to accept that the Amazon was started in the garage. The founder and the
starting employees were used to pack the books post it through the post office. After starting
business it moves on to the warehouse and inventory later (Guo, 2017). In year 2018 it hold the
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50 % of total online sells. It is selling possibly every product, media and services in the business.
In year 1997 the company goes to public by selling its share to the people, in the November same
year company opened the second distribution facility in the New Castle Delaware to serve the
customers who are on the east coast (Maresh-Fuehrer and Smith, 2016). In year 1998 the
company have started the business in selling the music albums with 125000 titles which is more
than capacity of any music store. Then for more innovation on 28 September 1999 company
started the third party selling facility by allowing the other sellers to sell their product through
the Amazon and started the one click pattern by which the customers can by the company
product just by one click. In year 2002 Amazon started selling clothing which is innovation for
the company.
Further in year 2003 amazon introduce a new idea of web hosting to generate the extra
income. In year 2005 Amazon introduced the Amazon Prime which is a policy to deliver the
product in two days with no charge (Kantor and Streitfeld, 2015). In year 2007 amazon come
with new concept of digital book reeding which is famous as kindle and further in year 2008
amazon acquire the audio book company to sell the audio books through its platform. In year
2015 amazon introduces the amazon echo as Artificial intelligence device which is open for
selling for its customers which is known as Alexa. Alexa is an artificial assistance which is using
AI as system. Amazon also started to sell the grocery to its customers in some cities for amazon
prime fresh customers. This was the innovation journey of the amazon since the establishment.
Existing innovations of the Amazon and their Performance and Capabilities
Existing Innovations of Amazon
The existing innovations of the Amazon are the services of the product which are
currently operating and services are continuously provided by the company. These are some
innovative services and products of the Amazon, Amazon prime, Amazon go, Amazon echo,
Amazon wardrobe and Amazon fresh (Moehrle, Wustmans and Gerken, 2018).
1. Amazon Prime- It was introduced in year 2005 by the Amazon as innovation. In this
service the customer who have paid money to become the member of the Amazon prime
are provided the special services related to the product they have purchased. In this
service the amazon provide the delivery of the purchased product within two days with
the responsibility of the amazon ensure the product delivery and quality of the product.
For this customer have to take the membership by paying per month charge for the
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service. This service is become famous and important for the regular user customer who
are buying the products from the amazon.
2. Amazon Go- It is a convenience store which is operated by online retailer amazon. It is
working in the four location in the USA- 1. Seattle, 2. Chicago, 3. & 4. are in San
Francisco California till 2019. This convenience stores are partly automated for the
customers (Rossman, 2016). The customers can buy the required products without
checking out the cashier. This stores are working with the artificial intelligence, this helps
the customer to buy the product and pay for it without waiting in the queues. This helps
the customer to save time in shopping.
3. Amazon Echo- Amazon echo was started in year 2015. the basic principle of the
Amazon echo is the artificial intelligence. It is a device which is connected to the internet
and work as personal assistant for its user. The Amazon named the latest product of Echo
range as Alexa. The information which is stored in the cloud is analysed by the artificial
intelligent system Alexa and them convey to the user. This system is less with the voice
recognition technology which help the user to operate the Alexa hand free. This is one of
the best innovation applied by the amazon in the business. This assistant also can play
online music. The Alexa gives the information of the environment by collecting the
information from the internet. This service is become most famous in year 2018 and
2019. This service is the most innovative action of the Amazon.
4. Amazon Wardrobe- In year 2002 Amazon started to selling the clothing and accessories
related to the clothing. The various range of clothing is available to its customer.
Customers can buy the cloths from the online platform which is provided by the Amazon.
This is one of the largest online store for the clothing and accessories. Through this
amazon is providing the various rang of products for men, women and kids (Ghajargar,
Zenezini and Montanaro, 2016). Along with the clothing, the Amazon providing deep
range of accessory to the consumer. On this online clothing store products are available at
very cheap prise and with wide range.
5. Amazon Fresh- It is the next level of amazon prime service. In this service the amazon is
providing the grocery shopping to the consumer who are the member of the service and
this is working in limited cities. In this amazon allow the customer to buy the grocery
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from the online store and deliver them as fast as possible (Lydia DePillis and Ivory
Sherman, 2016).
Performance and Capacity of Innovations
For the innovative thinking and working amazon have owned many awards since it was
established. By the innovative thinking amazon becomes the largest online store in the world. In
year 2018 amazon sell 50% of total online selling. In year 2016 amazon won 1 award. In year
2017 amazon won total number of 10 awards. In year 2018 company awarded with 8 awards and
In year 2019 amazon earns 1 award for the nomination of best company outlook. This shows the
success level of company which thinks innovative and new. Amazon plans for implementing
innovations and this lead it to success. The services and product selling through the innovative
planning are working and performing impressively. The services like Amazon Echo, Amazon
Prime and Amazon Go are the best performing services for the company. This services helps the
Amazon to gain more customers with the innovative implementation.
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The Industry In 2019
PESTLE Analysis of Amazon- PESTLE analysis is done by the companies to analyse
all the factors which are affecting the business & operations of the company. PESTLE analysis
helps company in expanding its online retail business in the coming years. In 2019 various
factors affects Amazon's business, which is discussed below-
Political Factors- Amazon is a company which does online retail business and its operations are
highly get affected by change in governmental factors. If current politicians support E-commerce
business than its is favourable for the company but on the other hand if any changes is made in
the political powers and government does not support e-commerce than company can inccure
losses. Amazon's also has an opportunity if the government supports cyber security in the
coming years or in 2019. Operations of the company also gets affected with the change in
government or politics. Amazon's business shows an upward trend because governments are
supporting cyber crimes and e-commerce strongly. Governmental factors also helps Amazon in
expanding its market & customer base(Engie, and Sarnelle, 2018).
Economic Factors- Operations of Amazon are get affected according to change in the situation
of economy of the world. If economies situation in 2019 is stable than it helps Amazon in
making profits and in enhancing market share & revenue. Economic factors such as interest rate,
inflation, recession, GDP and disposable income affects demand and supply of the products &
services of Amazon. I f there is an increase in disposable income of the consumers than it is an
opportunity for the company to gain profits. Thus, economic factors highly affects operations of
Amazon in next year(Soma, 2016.).
Socio-cultural Factors- Socio-cultural factors highly affects operations of Amazon because
many peoples & cultures does not prefer to buy product through online websites which in turn
reduces profits of the company. People residing in remote areas does not know how to buy things
online and different society & culture has different opinions about buying the things online.
Thus, operations of Amazon is also get affected by these factors. But, in the coming years people
& society are using e-commerce which is an opportunity for Amazon.
Technological Factors- Technological factors such as increasing use of technology, and
increasing cyber crimes affects business of Amazon. Increasing use of technology is an
opportunity for Amazon because which in turn increases customer base, profitability & market

share for the company in the future. On the other hand, increasing cyber crime on a daily basis is
a threat for the company.
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Legal Factors- Many legal rules & provisions are regulated by the government such as data
privacy act, environment protection rules and import & export regulations has an impact on the
workings of Amazon and it is compulsory for the company to follow all the rules and company
also has to adapt changes made in these rules & regulations. If the company does not follow this
legal rules than it cannot operate its business.
Environmental Factors- Amazon consider all the economic factors which in turn attracts
customers because nowadays customers are focusing more on environmental friendly products.
Company is using energy saving production methods which helps in growing market and
customers for the company(Srdjevic, Bajcetic and Srdjevic, 2015).
CONCLUSION
This report explains the profits of innovation in the business. This report gives the study
of innovations used by the company Amazon for developing its business world-wide. This report
explains the company background of the Amazon and the innovative history of the company.
Further the report covering the innovations of the company and the effectiveness of them by
evaluating the performance and capability of innovative thinking. By the SWOT analysis the
strengths, weaknesses, opportunities and threats are evaluated and pestel analysis is conducted to
know the impact of the external factors on the business of the Amazon.
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REFERENCES
Books and Journals
Dong, X.L., 2018, July. Challenges and innovations in building a product knowledge graph.
In Proceedings of the 24th ACM SIGKDD International Conference on Knowledge
Discovery & Data Mining (pp. 2869-2869). ACM.
Engie, D.L. and Sarnelle, O., 2018. Algal use of sedimentary phosphorus from an Amazon
floodplain lake: Implications for total phosphorus analysis in turbid waters. Limnology
and Oceanography. 35(2). pp.483-490.
Ghajargar, M., Zenezini, G. and Montanaro, T., 2016. Home delivery services: innovations and
emerging needs. IFAC-PapersOnLine. 49(12). pp.1371-1376.
Guo, Z.Y., 2017. EMPIRICAL PERFORMANCE OF GARCH MODELS WITH HEAVY‐
TAILED INNOVATIONS. Bulletin of Economic Research.
Kantor, J. and Streitfeld, D., 2015. Inside Amazon: Wrestling big ideas in a bruising
workplace. New York Times. 15. pp.74-80.
Maresh-Fuehrer, M.M. and Smith, R., 2016. Social media mapping innovations for crisis
prevention, response, and evaluation. Computers in Human Behavior. 54. pp.620-629.
Moehrle, M.G., Wustmans, M. and Gerken, J.M., 2018. How business methods accompany
technological innovations–a case study using semantic patent analysis and a novel
informetric measure. R&D Management. 48(3). pp.331-342.
Rossman, J., 2016. The Amazon Way on IoT: 10 Principles for Every Leader from the World's
Leading Internet of Things Strategies (Vol. 2). Clyde Hill Publishing.
Soma, J.T., 2016. The computer industry: an economic-legal analysis of its technology and
growth. Lexington Books.
Srdjevic, Z., Bajcetic, R. and Srdjevic, B., 2015. Identifying the criteria set for multicriteria
decision making based on SWOT/PESTLE analysis: a case study of reconstructing a
water intake structure. Water resources management. 26(12). pp.3379-3393.
Valentim, J.F., 2018. Environmental governance and technological innovations for sustainable
development in the Amazon. Embrapa Acre-Capítulo em livro científico (ALICE).
Zhu, F. and Liu, Q., 2018. Competing with complementors: An empirical look at Amazon.
com. Strategic Management Journal. 39(10). pp.2618-2642.
Online
Lydia DePillis and Ivory Sherman. AMAZON'S EXTRAORDINARY EVOLUTION: A
TIMELINE, 2016. [Online]. Available.
Through.<https://edition.cnn.com/interactive/2018/10/business/amazon-history-timeline/
index.html>.
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