Amazon's Business Environment: Types, Functions, and Analysis Report

This report provides a comprehensive analysis of Amazon's business environment, exploring different types of organizations, including public, private, and voluntary sectors, and their impact on international business. It delves into Amazon's organizational functions such as design and production, finance, human resources, sales and marketing, administration, and research and development, highlighting their interrelationships. The report utilizes PESTLE and SWOT analyses to examine macro environmental factors and identify Amazon's strengths and weaknesses, comparing them to Alibaba. It concludes with a critical reflection on key findings and their influence on decision-making processes within the company, offering valuable insights into Amazon's strategic positioning and operational effectiveness. The report also explores the growth of international business environment and its effects on Amazon's business strategies.

BUSINESS AND BUSINESS
ENVIRONMENT

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1. Different types of organisation and the growth of international business environment.........1
2. Explanation of each of the chosen organisations....................................................................2
3. Organisational functions of Amazon......................................................................................4
TASK 2............................................................................................................................................6
1. PESTLE Analysis....................................................................................................................6
2. SWOT Analysis of Amazon with comparison to Alibaba......................................................8
3. Critical Reflection and how it impacts decision making........................................................9
CONCLUSION................................................................................................................................9
REFERENCES .............................................................................................................................10

INTRODUCTION
Today, it is important for an organisation to have a good business environment to flourish
and work in order to achieve the desired business goals and objectives. The below report
explores the importance of business environment and its functions in context of Amazon.
Amazon is a multinational technology company focused on e-commerce, cloud computing and
artificial intelligence. It is headquartered in Seattle, Washington. The report explores the
different types of organisation and the growth of international business environment. Along with
it, it explains each of these organisations, their background details, products which they supply,
their size and scope etc. Also, the usage of PESTLE and SWOT analysis has been done in order
to explain the impact of macro environmental factors and in identifying the strengths and
weaknesses. At last, the report concludes with presenting a critical reflection of these key
findings and evaluates in what ways it influences the decision making (Chang, 2016).
TASK 1
1. Different types of organisation and the growth of international business environment
Below mentioned are different types of organisation and the growth of international
business environment:
Public Organisation: These organisations are part of the economy which is composed of
both the public enterprises and public services. The public organisations purpose is to provide
the services which benefits the entire society and not just the individuals who are using its
services. An example of such organisation is Amazon. Amazon is a multinational technology
company which is focused on providing e-commerce, cloud computing and artificial intelligence.
These public organisations such as Amazon are not the part of voluntary of private sectors.
Amazon tends to provide the services to the overall public of the world and not just to the people
which it is serving (Deasy and et.al., 2016).
Private Organisation: These organisations are the type of organisations that come under
the economy of the country and are run by the individual companies in order to earn profit.
Private organisations are not state controlled. An example of Private organisation is Arcadia.
Arcadia is a retailing company focused on selling brand clothing from high street retailers such
as Burton, Dorothy Perkins, Evans etc. The company runs its business operations in order to earn
the profits and maximise its overall business profitability. With having 2500 retail outlets in
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United Kingdom the company serves the only purpose of gathering more and more profits and
increasing its market share (Laudon and Traver, 2016).
Voluntary Organisation: Voluntary sectors are the organisations which are not-for-
profit organisations. These organisations are not government controlled as well. Voluntary
organisations operate with the purpose of serving the public and doing good with them. These
organisations are supportive for the cause which they serve and are totally independent while
they operate. Their aim is to ensure better service provision in whatever cause they are working
for. This makes them grow and achieve their business goals and objectives both. An example of
Voluntary Organisation is Wellcome Trust. The organisation is a biomedical research charity
based in London, United Kingdom. Established in 1936, its aim is to achieve extraordinary
improvements in health by supporting the brightest minds. The organisation serves its purpose of
providing the best of the services to the people and help them in becoming better individuals by
finding ways to improve their health (Quinlan and et.al., 2019).
Above explained are the different types of organisations and the roles they play.
Growth of international business environment: The international business
environment refers to the environment where managers of an organisation have to deal with a
variety of environmental and cultural differences. They have to continually monitor the legal,
political, sociocultural, technological and economic environments. An increase in business
spreading from one place to another and organisations selling their products and services in
different countries has brought growth in international business environment. Along with it,
Globalisation is another important factor that has brought forth the growth in the international
business environment. The growth has led the organisation's management to become trained and
understand the political, legal, technological, sociocultural, and economic environments in order
to achieve the desired goals and objectives (Klepac and Berg, 2019).
2. Explanation of each of the chosen organisations
Below explained are the organisations which are chosen above:
Public Organisation: Amazon is a multinational technology company that is focused on
cloud computing, e-commerce, artificial intelligence etc. The organisations products and services
include selling of software, video games, apparel, furniture, food, toys, jewellery, etc. Amazon is
one of the largest e-commerce companies in the world. The size of the organisation is large as
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the company is having 50 fulfilment centres in United States. Along with it, the company serves
in different markets besides United States of America (Sousa and Rocha, 2019). The company is
having more than 97,000 working employees all over the world. The scope of Amazon is better
as the organisation is serving a large employee base and its products and services are being
delivered all across the world. The mission of amazon is guided by four principles which are
customer obsession rather than competitor focused, commitment to operational excellence, its
passion for invention, and long-term thinking. The vision of Amazon is to be the earth's most
consumer centric company and to building a place where people can come discover and find
anything they seek to buy online. Its business objectives include to achieve the best
organisational efficiency and bring the best out of its resources along with earning profitability.
Organisation's structure of Amazon is hierarchical where its senior management team includes
two chief executive officers, three senior vice presidents and one worldwide controller. The legal
structure of Amazon is that it is a type of Joint stock company and is run by the Board of
Directors on behalf of the shareholders and has an A.G.M where shareholders can vote of a
certain key issues relating to the organisation. The company is having more than 97,000
employees working all across the globe. Along with it, Amazon is serving numerous consumers
all across the world.
Private Organisations: Arcadia is one of the leading clothing retailers in United
Kingdom. The company is known for selling of clothing and retail in United Kingdom. The size
of the organisation is large. The vision of Arcadia is to serve its customer with the best of the
services. The organisation's mission is to make clothes which stand the test of time and are best.
The business objective of the Arcadia is to earn the best of the profits along with serving its
customers with best of the products and services. The organisational structure of Arcadia is
hierarchical. In which the management of the company acquires one CEO, two deputy
chairman's and various other departmental managers. The legal structure of Arcadia is that it is a
separate legal identity (Stanković and Novaković, 2019). Along with it, it is a type of joint-stock
company, in which each of its shareholder is a part of the business and under no circumstances
these shares are sold to members of public. Currently, Arcadia is having 22,000 employees
working under it and is serving the population of overall United Kingdom with its products and
services. The number of employees it is having is 2057 and its is helping people across the
world.
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Voluntary Organisations: Wellcome Trust is biomedical research charity which is
based in London. The organisation was established in 1936. The size of the organisation is large
as it is one of the biggest voluntary organisations in United Kingdom. The scope of Wellcome
Trust can be seen as one of the biggest voluntary organisations working in United Kingdom
supporting the causes to improve the health of the overall world. Its researches are helping the
overall world by providing better services to humanity. The vision of the Wellcome organisation
is to provide a good and better health to humanity by achieving extraordinary improvement and
supporting better individual minds. Its mission is to provide good research and development to
find cure for the illness and diseases spread across the world (Trad and Kalpić, 2019). The
objective of the organisation is to ensure that none of its people are suffering form any diseases
and to ensure organisational growth and development as well. The organisation structures of
Wellcome Trust is Functional. The company is set up with a number of Board of Directors and
organisation is divided in smaller groups with specific roles or Tasks. Being a Trust, Wellcome
Trust's legal structure includes trustee only but no members. It follows Trust deed, deeds of
amendment because of being a charity. It holds the risk of personal liability and administrative
issues. The trust is having
3. Organisational functions of Amazon
Below mentioned are the organisational functions of Amazon and the interrelation
between these departments:
 Design and Production: The design and production department of Amazon deals with
designing and production of its services and products. The department deals with
producing the raw materials which Amazon makes such as its books, groceries (which
comes under its operational unit Whole foods) etc. Better designing and production leads
to better products and services (Debnath, 2016).
 Finance: The finance department of Amazon keeps electronic or manual records where
money is paid and received and paid out by the business. This information is later used to
produce various financial statements for purpose of Tax and in order to comply with legal
needs. Also, the information is used in order to produce accounts related to the
management which enables senior managers to review and plan a business strategy.
 Human Resources: The human resource department in Amazon deals with recruitments,
employee salaries etc. The department is also responsible for development and training of
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the staff. The entire human resource team is devoted to take care of the organisation's
employees and staff and is responsible for their salaries, dues, benefits etc.
 Sales and Marketing: The sales and Marketing department of Amazon researches
consumer needs and develops products and strategy which are later satisfied by the
organisation (Laudon and Traver, 2016). The department researches what consumers
want from the Amazon and in what ways the business can be managed to fulfil these
needs and requirements.
 Administration: The administration department deals with administrative tasks that
includes handling of mail, dealing with complaints and enquiries, computer services,
catering etc. Along with it, they produce documents such as newsletters, stationary, forms
etc.)
 Research and Development: The aim of research and development is to improve the
existing products and services. It helps Amazon to improve its services and bring the new
ones in the market. These overall services improve the organisation's production
methods and create effective processes as well (Charter, 2017).
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(Source: This chart shows how quickly Amazon is eating the retail world, 2017)
INTERRELATIONSHIPS BETWEEN ORGANISATIONAL FUNCTIONS
Production and
Finance
It is important for the production department of Amazon to provide the
records of the raw materials they need to purchase to the finance
department. Also, production department also need to provide each and
every detail of the items that it is using during its process of production to
the finance department which will be later used by the organisation to
understand what are the upcoming requirements of the organisation and it
prepares the budget as per its knowledge. Their interrelation impact the
organisation by positively providing it with the required resources and
budgets. Along with it, it brings smooth functioning within the
organisation.
Human Resource The interrelationship between Human Resource and Sales and Marketing
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Illustration 1: Growth in Store- based sales vs Amazon.com Share

and Sales and
Marketing
in Amazon ensure organisation's smooth efficiency. The human resource
team ensures that the sales and marketing employees are getting right
salaries, and they are being treated as per the organisational standards etc.
Along with it, the human resource department also recruits new employees
in these departments and ensures better functioning. Their relationship
impact the organisation by getting new employees with better performance
as per the set standards set by sales and marketing team (Kolk, 2016.).
Administration
and Research and
Development
The administration and Research and development department cooperation
brings amazon a successful development of its markets needs and wants. In
order to ensure that proper researches and development takes place within
the organisation's environment the administration department ensures that
the department is receiving with proper documents and needs mails. Also,
in case of any of the information requirement the administration
department provides the department with required information (Chang,
2016).
TASK 2
1. PESTLE Analysis
Below explained is the PESTLE analysis of Amazon:
Political factor: The factor also creates negative and positive impact upon Amazon such
that political stability creates the opportunity in order to expand or diversify its business in
further developed countries. For example, Amazon expand its brick and mortar book store in US
for increasing its online business. On the other hand, the company also affected from the political
factor such that due to political instability, the firm also affect its financial position, such that
people spending also decreases because of higher prices and as a result, the business profit
affected.
Economical factor : Economic factor is highly influenced by economic stability of the
country due to which company might be facing high recession and low market attentiveness. Due
to economic crises. Customers are less interested to purchase anything. In case of good economic
growth customer highly engaged with the company services. One positive impact of economic
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stability on the Amazon is company getting good profit revenue. Or one negative impact is
company facing low sales or less to covering product cost as well. Economic is the most
significant factor which highly impacted on the economic growth (Sousa and Rocha, 2019).
Social factor : Social factor is the another significant factor that affect the company
image or brand value, social factor get influenced from the society trend or demand. Social
factors affected by the changing needs of customer needs and wants. That affect the business and
most challenging factor growth. Amazon having high range of competitors in order to which
they need to adopt new product or services in order to meet out the following great services to
attract high range of customers. In order to keep social factors positive company should follows
corporate social responsibility to make social welfare or to get the high customer feedback.
Technological factor- Technological factor have been affected Amazon to a large extent.
The cited company face rapid technological obsolescence that push extreme pressure on
company so that they develop or improve its assets in terms of technological in continuous
manner. This threat is further analysed as the cited firm has to invest huge amount or resources in
information technology in order to boost their business. On the other hand, Amazon is also
enjoying with various opportunities in order to improve its performance in terms of IT
efficiency. In which productivity in terms of online retail is increased and cost of operation has
been decreased due to advanced technology (Trad and Kalpić, 2019).
Environmental factor- Amazon has great opportunity that lead them in improving the
impact of environment in terms of rising interest in programs related to environment. Further,
they also have great opportunity related to sustainability of their stated firm. In addition to this,
Amazon must have to invest and implement in policies related to extensive energy saving.
Further, there is also extreme increase in low carbon lifestyles that provides huge opportunities
for them to enhance their image in the world.
Legal factors- the legal factors in pestle includes rising product regulation, easing of
import and export regulations and also rising of environmental protection act. Thus, Amazon has
ability of expanding their operations in order to exploit ability of sellers that are increasing to
access overseas supplies. This has strengthened opportunities of cited firm in order to boost their
brand image with help of CSR policies in appropriate manner.
The above mentioned PESTLE analysis explores the organisation's strengths and
weaknesses and the factors that impact it overall (Laudon and Traver, 2016).
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2. SWOT Analysis of Amazon with comparison to Alibaba
Strengths Weaknesses Threats Opportunities
Amazon is one of the
world's leading online
retailer. The company
uses its Information
Technology and e-
commerce as large
platforms in order to
gain a successful
market advantages. In
comparison to
Amazon Alibaba uses
its market advantages
of selling and buying
of businesses etc. in
order to achieve the
desired growth (Kolk,
2016.).
Amazon offers free
shipping to its
customers which is a
great danger for the
company to lose its
margins. Along with
it, it is making the
company not able to
optimize on costs
because of the strategy
used. It makes it
difficult for the
organisation to thrive
and stand as a market
leader. In comparison
to Amazon, Alibaba
makes use of Taxation
strategies while
delivering their
products or services.
Amazon is facing an
increasing concern of
consumers all across
the world in online
shopping. It is making
its easy for other
platforms to launch
themselves in the
online market. It is a
threat for the Amazon
where it is going to
have new competitors
in the market. In
comparison to
Amazon, Alibaba is
having better strategies
to promote their
products and services
which makes the
organisation stand
better in a competitive
market.
The opportunities that
Amazon is having is it
has decided to increase
its global footprint,
which is making the
organisation reach
millions of new
customers all across
the world. Along with
it the organisation is
having a good
opportunity in rolling
out its payment
system. In comparison
to Amazon, Alibaba is
still having fewer
opportunities in
market because of the
globalisation recession
which the company
faced in 2008 and the
recent trade war that
occurred between
America and China.
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3. Critical Reflection and how it impacts decision making
From the above study it has been seen that Amazon is performing well in the market. The
company is globally making its benchmark providing better services and products to its
consumers. It has been seen that Amazon is lacking its overall market growth since the arrival of
new competitors in the market. Along with it, the above discussed PESTEL and SWOT analysis
explores the company needs to have strong command in reaching new platforms or countries. It
is important for the organisation to reach new markets and sell its products and services. It will
make the organisation reach new markets and environments and gain growth again. The e-
commerce platform of Amazon is one of the best opportunities that the organisation is
developing and gaining growth from (Deasy and et.al., 2016).
CONCLUSION
By summing up above report, it has been concluded that there are different types of
sectors and each of them have their own purpose as well as legal structure. Further the report
concluded that Amazon have different organizational functions such as Human resource
department, R&D, production department and they all are interrelated with each other.
Moreover, report also concluded that by using PESTLE and SWOT analysis the firm can easily
determine its internal and external factors which affect the overall business. The present study
also concluded the Amazon's strength and weaknesses are interrelated with its external macro
factors that affect the overall business performance.
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Online
This chart shows how quickly Amazon is eating the retail world. 2017. [Online]. Available
through <https://www.cnbc.com/2017/07/07/amazon-is-eating-the-retail-world.html/>
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