Strategic Factors and Business Strategies in the Online Retailing Industry

This report discusses the strategically relevant factors in the macro-environment of the online retailing industry and prepares a PESTEL analysis. It compares the business strategies of Amazon and AliExpress and analyzes their financial data. It also provides recommendations to Amazon to confront the dangers posed by AliExpress in the online retailing industry.

Report

Table of Contents
INTRODUCTION...........................................................................................................................3
MANIN BODY................................................................................................................................3
Identify the strategically relevant factors in the macro-environment of the online retailing
industry. Prepare a PESTEL analysis. Which of the factors appear the most likely to have the
greatest effect on the online retailing industry? Do the collective forces appear conducive to
good industry profitability?.........................................................................................................3
What are the keys to success in the online retailing industry? Does Amazon or AliExpress
have an advantage? ....................................................................................................................4
Compare the business strategies of Amazon and AliExpress. Does either company have a
strategy that will likely lead to competitive advantage? Is the strategy of either a winner?.......5
What does an analysis of Amazon and Alibaba’s most recent three year financial data suggest
about the relative competitiveness of the two companies? Which appears to have the greatest
“staying power” to engage in a long term competitive battle? ..................................................6
What strategic issues confront Amazon? ...................................................................................7
What recommendations would you make to Amazon to confront the dangers posed by
AliExpress in the online retailing industry? .............................................................................7
CONCLUSION................................................................................................................................8
REFERNCES ..................................................................................................................................9

INTRODUCTION
Business is the process by which an organization performs all kinds of monetary
transaction that has been helping in selling of product and service within market. In the present
scenario online selling is emerging as a new medium to do business. This is also known as e-
commerce. Such kinds of businesses is done with the help of various kinds of portals that has
been formed by an organization for displaying of its products. In these kinds of businesses
different strategies is being used with innovative method to be applied. As per the report various
things related to online selling has to be covered. Organization taken within the report is based
over Amazon and Ali Express. Things to be covered within the file PESTLE, business strategies
to be applied by Amazon and Ali Express. In the end threats posed by retail industry regarding
online selling.
MANIN BODY
Identify the strategically relevant factors in the macro-environment of the online retailing
industry. Prepare a PESTEL analysis. Which of the factors appear the most likely to have
the greatest effect on the online retailing industry? Do the collective forces appear
conducive to good industry profitability?
PESTEL analysis is the tool that is being used for making analysis of external factors to
be done. This analysis is based over factor like political,economical, social, technological,
environmental and legal. Further the analysis is done as follows:
Political factor: This is the factor that includes intervention of government within the
organization and its working. Mainly policies formed by government mainly impacts
functioning of online retail industries. Due to this Amazon has got full support of government in
terms of cyber security which has made it famous within market of Australia (Khrais, 2020).
Economical factor: These factors includes various kinds of elements like import and
export rate , unemployment and disposable income. Such factor directly impacts profit and
revenue generation of online retail industry. Amazon is benefited in positive manner as due to
this as disposable income is increasing nowadays and people spending more on luxurious items
which made profit generation to be possible within an organization like Amazon to be high.
Social factor: It is related to culture and trends taking place within an society. These
factors drastically affect the online retail and selling of products. These trends is required to be

understood by Amazon in order to make sure that needs of the customers is satisfied through
quality of its products which enhances online buying capacity of customers. This has helped
Amazon in maintaining customers loyalty for its online selling.
Technological factor: These factors include technology and advancement taking place
day by day. In this latest technology should be use by an organization to boost its production
capacity and selling. Amazon should focus upon enhancing IT sector in order to make sure that
security and privacy of an individual is maintained.
Environmental factor: Such factors are mainly focused over protecting environment
which helps online retailing industry in gaining sustainability within industry. Amazon being an
online retailer becomes more popular as carbo emission is less within it. It attracts interest of
customers within environmental programs and initiatives taken by Amazon.
What are the keys to success in the online retailing industry? Does Amazon or AliExpress have
an advantage?
Online retail industry is one of the fastest growing industry all over the world and has
been new trend in current market. This industry has gained large popularity as people have
shifted to buying from online store rather then physical store. Various factors are there which has
helped in growing of online industry and they are as follows:
Brand name: Memorable brand name is required to be formed by an online retail
organization. Organizations like Amazon, Ali express and flipkart has made there name to be
simple and catchy. It makes name to be remember which helps in increasing productivity of an
business organization. This is the reason that Amazon and Ali Express holds brand value and
trust of its customer which makes them gain advantage within market (Kaur, Arora and Bali,
2020).
Design of the store: Attractive design is able to be achieved through look and
appearance of online stores which should be unique. Amazon and Ali Express has made stores
with latest features and display if products with pleasing manner. It has helped in gaining
advantage by making customers to be attracted in pleasing manner.
Search Engine Optimization: This is another key feature related to building of website
and should be customers friendly. Organizations like Amazon and AliExpress has been
following this which has helped them in gaining customer base. This is helpful in making

product to be searched by category customers is willing to buy. It has made advantage to be
gained in relation to build relation with customers.
Online payment:The online money transactions are becoming popular now and buyers
are familiar with the net banking payment method. Amazon and AliExpress has provided options
like credit card and debit card transactions with net banking options which has helped in gaining
customers which makes selling to be increased.
Easy check-out process: Various things like Add to Cart and Add to Whishlist button
should be there within an online. This has helped Amazon and AliExpress for adding desired
products and make most out of it possible which has helped in making customers to save
products and buy them latter on.
Compare the business strategies of Amazon and AliExpress. Does either company have a
strategy that will likely lead to competitive advantage? Is the strategy of either a winner?
ALIEXPRESS’S STRATEGY: The organization is been using B2B strategy that has
helped goal of AliExpress is required to ease down the business anywhere. Alibaba has started
with helping middle and small-enterprises. Thus has been helping enterprise to make its survival,
growth and development possible. Also Alibaba learned about main issue which lacks funds to
be generated with sales channels. For addressing issue Alibaba is focused on B2B and has laid
down solid foundation for its business model. Alibaba became the middleman to provide a
platform for sellers and buyers to build connections to generate business activities. It empowered
merchants to do the business by themselves (Johri and Tiwari, 2019).
Amazon's strategy is different from Alibaba because Amazon has adopted self-employed
approach and participated within steps of sales. Business model was fulfillment by Amazon.
Most buying and selling process was through Amazon has used centers to quickly pick, pack,
ship and provide customers service. Amazon also owned its own products and makes third party
sellers by collecting sales commissions. Affiliated merchants is there to make sure that products
is sold by themselves or is choosing to use Amazon’s fulfillment services. Amazon has been
providing warehouse and merchants for making products. FBA method is also there to attract
merchants within different countries, decreased costs and provides goods delivery services. This
is not good option for Alibaba. As middlemen empower merchants for processing sales by
themselves. In this various orientation compared to Amazon. Number of merchants on Alibaba is
huge with most of them form China. No guidance is been used for making majority of

merchants in order to make expansion of business out of country. It is difficult for Alibaba to
move forward to global marketplace as whole. In order to maintain good centre and warehouse
globally. Amazon has spent massively for supporting resulted into lower profits. Amazon had a
customer service number where you could talk to a representative, or leave a message.
What does an analysis of Amazon and Alibaba’s most recent three year financial data suggest
about the relative competitiveness of the two companies? Which appears to have the
greatest “staying power” to engage in a long term competitive battle?
From the above graph it can be concluded that an organization like Amazon and Alibaba
has used various kinds of unique strategies that has made promotion of them possible within
market . In last three years various there has been sustainability within the market of online
retail. Due to this both of them has got opportunities to capture market in more effective

manner . Both them has used various tools as per the strategies applied by them. Amazon still
holds more market popularity them Alibaba due to its efficiency in services and making
themselves more easy to reach to its customers (Hussein and Kais, 2020).
What strategic issues confront Amazon?
Various kinds of satretgic issues is to be faced by Amazon that has been explained as
follows:
Keeping Up E-commerce Growth: In recent times it can be seen that online selling has beem
increasing with legacy first-party e-commerce business has lost some of its steam. Amazon is
posting 10% growth during the year by segmenting through higher margin business lines that has
taken growth mainly through online store. Thus operating segmenting still make 50% of revenue
with substantial slowdown would weigh over consolidation with revenue growth.
International Performance: Some of Amazons earnings has been accounted through weak
returns in amazon by segmenting posted lighter with growth rate of 15% upon constant currency
basis of versus 21% previous quarter. Amazon CFO Brain Olsavsky is been pinned with weak
growth within various markets. As investors outlook for how Amazon fares internationally
within the year.
Keeping Rivals at Bay: Amazon is an undisputed leaders in e-commerce but Formidable
through rivals like Walmart. Various rivals has created difficult for making growth of Amazon to
sustain. This has made high competition to increase because of which customers base has also
been divided. Further this has made various strategies to make customer loyal but still fluctuation
in price result into making amazon struggle within market.
Balancing Investments vs. Profits: Amazon's is required to make efforts like health care with
consistency in news. It is required to maintain balance with its payments which helps in making
the organization gain sustainability within the market. Also payment has increased with profits.
It becomes very complicated for an organization to deal over processes existing in an
organization (Chen, 2020).
What recommendations would you make to Amazon to confront the dangers posed by
AliExpress in the online retailing industry?
As retail industry is dynamic in nature and has been growing at very fast rate within
Morden time. Individuals are shifting to online shopping in order to seek luxurious brands with
purchasing them. In this industry two of major rival is Alibaba and amazon bot of them is greater

competitors of each other. In my opinion both of them has captured market all over the world.
These has been focused over more profit generation. Amazon has been using strategies is still
required to be improvised in order to make an organization like Aliexpress face more
competitions. Threat posses to Amazon is related to customers base. This makes customer shift
other online retail store like AliExpress. Now amazon should bring more discounts and facilities
to its regular customer that is going to make promotion as well as loyalty to be made within
regular customers (Amasiatu and Shah, 2018).
CONCLUSION
From the file it can be concluded that an online retail industry is that kind of industry
which makes online selling possible of product and services. Further in this file variousn kinds of
factors impacting sales and success of retail industry is discussed. Then PESTEL is done for
analysing of external factors affecting organizations growth. Comparison is been done of both
Amazon and AliExpress financial growth. In the end an overview with recommendation is given
about the growth and things impacting it for Amazon

REFERNCES
Books and journals
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Chen, Y., 2020, June. How the Internet Affects the Development of Retail Industry.
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19.
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Pantano, E. and Gandini, A., 2018. Shopping as a “networked experience”: an emerging
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Shoude, Y. and Dehai, Z., 2017. Analysis on Influence of Online Retail Development on
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