Group Report: Situational Analysis of Amazon's E-commerce Business

This report provides a comprehensive situational analysis of Amazon's e-commerce business. It begins with an executive summary and background, followed by an in-depth industry analysis, examining market size, growth rates, and major trends. The report delves into the business environment, using PESTLE analysis to identify political, economic, social, technological, legal, and environmental factors impacting Amazon. It assesses the current industry situation, identifies threats and opportunities, and conducts a competitive analysis. The report also covers Amazon's target market, business overview, products and services, unique advantages, revenue models, and marketing objectives and strategies. Key success factors, including skills/training and technology, are also discussed. The analysis aims to inform the development of effective e-marketing strategies for Amazon, considering its global presence and competitive landscape.

MARKETING

Contents
Executive summary....................................................................................................................3
Situational Analysis and the background...................................................................................4
Industry analysis.........................................................................................................................4
Business Environment................................................................................................................5
Current situation of industry...............................................................................................7
Threats and Opportunities...................................................................................................8
Competitive analysis.........................................................................................................10
Target market....................................................................................................................10
Business overview............................................................................................................12
Domain hosting.................................................................................................................12
Products and service description.......................................................................................12
Unique advantages............................................................................................................13
Revenue models................................................................................................................13
Marketing objectives.........................................................................................................14
Marketing strategies..........................................................................................................14
Professional services.........................................................................................................16

Executive summary
E-commerce is referred as the using of electronic medium and internet in order to purchase
and sell the products. E-commerce is used to execute the transactions and meet the marketing
needs. The growing use of internet and other communication technology has noticed that
several companies decide to offer their goods and service on the online platform and enhance
the service delivery process. Amazon is one of the biggest and prominent e-commerce
companies, which was initiated in 1994. The company remains on the path of emerging
growth in recent few years. This has been achieved by implementing the strategies to
continue.
In recent days, marketing of goods and services demands development of advanced
technology and adoption of careful strategy selection. A marketing expert should choose
from a list of marketing techniques such as one-on-one marketing, blog and affiliated
marketing, social media and viral marketing, and every other form a strategy to implement
them. The company can achieve its success from one-to-one marketing and as its
consequences; it managed to different purchasing behaviour of customers. The piercing
competition can be solved only with the help of effective marketing plan that has been
implemented and on the same side; its results have been measured.
By understanding the buying behaviour of the customers, the company has taken the
advantage of economies of scale and focus of its customer-centric strategy. In order to
improve the brand presence and market dominancy, Amazon should undertake and study
situational analysis so that it can develop its SMART goals. To analyse the success of the
suggested goals, several measurement tools such as RJ metrics and Google analytics will
have been used.

Situational Analysis and the background
Amazon is one of the American based e-commerce company, which was established in 1994,
and after some time, Jeff Bezos incorporated it. The company is headquartered in
Washington DC. The company always remained world`s largest web-based retailer but in
recent years, the company has been handling the competition. This analysis is based on the
amount of market capitalisation and revenue sales achieved by the company in last few years.
Amazon started its business with a bookstore but after some time, it continued to diversify its
operation by including a wide range of products, which are now stocked on the store. The
situational analysis will aim to provide the necessary information while undertaking and
developing the appropriate e-marketing strategy.
Industry analysis
Industry size, growth rates, classification, expected events, and major trends
Growing use of internet has enabled to find out several ways of doing business. Due to
increasing online platform, various opportunities emerged over the last few years. E-
commerce industry has changed the way in which the business undertakes its operation.

Other than this, advancement in the technology is another factor influencing which has
affected the business operations over the last few years whether it is any retail transaction
from B2B. Sometimes the application of technology ensures that these transactions are
executed accurately and effectively that reduces the endeavours of the many companies in the
world. Amazon is among the regular operators and it is a forefront when it comes to use of
application of technology, which further creates competitive edge above other players in the
industry.
Before the invention of internet, it looked almost important for the online retailers to use
these resources these days, which were considered impossible to access before internet.
Earlier, the use of location-to-location method of executing and expanding business and
delivering the services to the millions seems impossible earlier and this created different
misfortunes. Internet is a global market place, which has opened uncounted opportunities for
the business, and it has assisted them to achieve goals.
New corporations have become successful because of internet and on the same side; there are
strategies that are more effective and adopt efficient service delivery method so that the
company can reach more and more people with the help of internet. Earlier certain products
were unthinkable which have become capable because of expansion, which has increased the
sales over the years. Businesses have started adopting the strategies to deal with the
challenge, which have turned into the opportunity. It is seen annual rate of the industry has
reached at 60 percent in relationships of expansion and revenue among the years. On the
different side, general structures of organisation, which include internet and social media and
their usage especially while dealing with marketing goods and services.

Business Environment
While looking at the business environment, E-commerce industry controls and operates under
with the number of things. The e-commerce industry is exposed to specific country`s risks
relating to certain rules and regulations in which business operations are regulated. Being
most extended company in the industry, it is seen that Amazon Inc. enjoys benefit of
extraordinary sales volume, which has increased the market share. Moreover, E-commerce
trade is forceful and aggressive, as it has presented many new confrontations to the
organisation. Apart from this, several factors such as economic, social, and cultural trends are
continuously shaping the system through which they are structured and what kind of
opportunities the company is adopting to come up from the negative impact of these risks.
Through PESTLE analysis model, an organisation will establish vital opportunities to cope
up with the risks hinged from the external factors in the external environment.
Political factors: Advancement of technology with enabled internet has been regulated
differently by every country in the world and in lieu of that, it has direct impact on the
pattern, which a business undertakes to operate. For example- UK and U.S. have open policy
for the use of internet for the online business. With stable political conditions that are
occurring in the external environment, the company seeks potential opportunities to create
and develop. Moreover, china and other communalist states have enforced many rules of
operating the internet. China is popular for regulating the internet that strictly promotes the
local buyers. Threat for Amazon is to grab the Chinese market and its effect on the e-
commerce developments, which are negative. By analysing the PESTLE analysis, Amazon
strives to benefit itself with the government support through stable political conditions in the
developing and developed nations.
Economic conditions- this factor plays an important role in developing of e-commerce
industry over the world. The probability of becoming successful in the market is the outcome

of stable economic condition that has ultimately intensified the efforts while grabbing the
opportunities. As per the trading economies, the personal disposable income has been
increased by 589.8 billion dollars from Jan to December for 2016. The raising personal
disposable income among Americans has stimulated the company`s fiscal potential. It is
important to know that level of taxation and inflation continues to shape in such a way where
the business provides services and goods through e-commerce platform. Relying on the
external influence in regards to economic analysis, Amazon must construct the strategies to
grab the marketing opportunities in the developing countries as well.
Social and cultural factors- Social factors play a significant and critical part while
determining the behaviour of consumers situated in different parts over the globe. Income
inequality among the people especially in developing and the developed countries has
remained a danger for Amazon`s prosperity with UK leading. With the increase in the
demand of affordable smart phones, pallets and the laptops, the purchasing behaviour of the
customers have improved. In regards to serve the growing demand, Amazon constituents to
get as much people get an easy access to internet. This has affected the business and its
process especially in the environment in which it operates that generates more sales and
profits from various parts of the world with the help of e-commerce.
Technological factors- Technological advancement drives the company to use e-commerce
platform and as a result, it decides how to determine that the company can perform well by
maximising the online business activities and minimising the operational costs. Recent
research has shown that e-commerce business is getting more advanced and it is better
accomplished with the technological advancements. Moreover, this has become a threat that
can improve the efficiency and growth firm. Amazon come across the risk of technological
antiquation and it extends that affect the growth of the organisation, which frequently
improves the technological assets. Amazon has struggled with the risk of cybercrime. It

influences and threatens the customer uprightness and experiences. On the basis of above
macro-environmental analysis, it can be said that Amazon should continuously improve the
technological infrastructure.
Current situation of industry
The current situation of the industry states that Amazon is on the right track while
considering the growth and expansion over the years. It can be considered that to have a
result of huge investment, the business has to undertake the same time growth of technology.
Recent research have depicted those upcoming tendencies in E-commerce platform, which is
likely to see the overview of drones in the form of products, and service delivery, that is
efficient in nature.
Threats and Opportunities
There are massive and enormous opportunities that still exist in this industry. Advancement
in technologies serves to sustain and enjoy the brand image and the competitive advantage.
The idea to improve the brick-and-mortar business is a strategic focus that provides
convenience and maximum reach to the customers. By focusing on this strategy, Amazon
aims to add several groceries so that the product list can be extended. The initiative of drone
technology advancement for the product delivery has remained the opportunity for expanding
it several sectors and on the same hand; the demand for several e-commerce services have
raised. Research has identified that increasing number of people who use of internet has
always created a chance for e-commerce. Moreover, emerging use of social media must be
addressed as a revolution as there is a huge network of groups, which have continued to
develop for the last few years.
While analysing the threats, Amazon has been struggling with widespread threat named
cybercrime. Other more threats include hacking and fraud. These two also remained biggest

hindrance to the successful e-commerce activities. More above from the topmost Social
media and other platforms that delegates entertainment, Amazon has remained a prey of
phishing and several denial of other services attack in past. Recently, Amazon lose 80000
login identifications to the data miners. In October 2016, millions American people could not
access the website. E-commerce industry continues to employ several stakeholders in such a
manner where encryption and other more technologies can be used while solving the
problems. This threat is just not limited to threat of losing Amazon`s competitive advantage
and the brand positioning but also the uprightness.
Key success factors
Numerous factors limit the achievement of the business in the industry and this is because
they play role especially when it comes to check whether each process is done in a right
manner. This industry depends seriously on technology and in lieu of that, here are some of
Key critical success factors-
Skills/Training: the standard of training in addition to the skills also among the employees in
any organisation plays an important and it is a crucial determinant of the industry
performance. This is because of the role, which they continuously play in boosting the
organisation towards the achievements of the goals (DeFranco, Morosan, and Hua, 2017).
Amazon values its employees, as they are the notable influencers of CSR policies and
organisational capacity. From developing the leadership skills to conducting the training
programs, it is noticed that Amazon has a progressive and friendly environment that build a
relationship between the employee and the employer, which in return supports the leadership
training and team building (Chaffey, 2015).
Technology related- the company that operates within the e-commerce industry adopts
these technological related developments. Companies who uses the recent technology which

stay ahead of every competition and get the success finally in comparison to those who do not
invest much in the technology. Amazon has invested high in its latest Domain Name Servers
(DNS) which has helped the company to mitigate the cyber-attacks on its web operations
(Wirtz, Pistoia, Ullrich, and Göttel, 2016).
Related to marketing- opportunities, which are available to e-commerce Company in market
that is also the determinant to success for the venture. Companies who seek to use the e-
commerce platform that ensures that they use strategies to manage the demand in market
whenever it rises. Amazon employs social media advertisements, pay-per click marketing,
and public relations (Laudon, and Traver, 2018).
Competitive analysis
Competition from the other companies is quite obvious in the e-commerce industry and
Amazon has been continuously grappling several changes over the last few years. E-bay,
Alibaba, Flipkart, and OMG are crucial competitive sites when comparing with the Amazon
and this depends on few factors-
The arrangement of webpages is effortlessly navigable
Design of these websites is attractive and they have feature-rich content
They have engaged an effective online security
These sites have ready versions which encourages smart phone users
While analysing the gap, numerous things need to be considered in regard to manner in which
the business is designed in such a manner to stand in the competition. Amazon is a very
strong foundation in this industry, which is the reason of its capitalised over the last few
years. The success of Amazon is on the basis of strengths of the brand and awareness of the
web for more than 20 years. This provides a competitive advantage and the way it undertakes

its successful business as compared to other players in the competition. While evaluating the
weakness, Amazon lacks solid customer support system, which can work in order to confirm
that success of the online platform that creates a bond with the new and frequent customers
(Lo, and Lam, 2015).
Target market
The target market of the company and the products is U.S. and all over the world. The
company uses demographic and psychographic segmentation in order to analyse the market.
The market segmentation model relies on the genuine buying behaviour. When it comes to
evaluate the customers with a closer view then the company`s researches about each
customer personally and apply changes to the extended and esteemed customers. Customer
segmentation embraces developing characters in such a way that will purchase the particular
commodity in an observed way. In the same way, Amazon`s target market is the both for the
middle and upper-class in the countries who have easy access and has experienced the
inherent technology as customers do not have much time to shop from physical stores
(Tarighi, Sajjadi, Hamidi, and Khabiri, 2017).
While evaluating the “United States” which is its domestic market it is seen that more
than 25 million people buy products from the Amazon on the daily basis, which makes it one
of the largest companies while measuring the daily turnover 0.55% of its customers are the
returning buyers. Availability of demographics undertakes to evaluate the age groups of
shoppers on Amazon covers from 20 to 60 + years and also its Amazon`s Prime Program in
which the customer is promised for the two-free day shipping at $99 in a year (Wang, and
Hao, 2018).
Customers of Amazon comes from diverse geographical areas with different cultural
backgrounds such as religion, values, and cultures. Among all the technologies, tech-savvy is