Global Family Business: An Analysis of Amazon's Business Strategy

This report provides a comprehensive analysis of Amazon's business environment, focusing on its global operations and corporate social responsibility (CSR) initiatives. It begins with an introduction to Amazon as a technology company and its diverse portfolio, followed by an overview of the theoretical framework, including models related to the global environment, corporate governance, and CSR. The analysis section delves into the application of these models, particularly the impact of environmental factors and the adoption of various corporate governance models like the Anglo-US, Japanese, German, and Socio-Cultural models. The report also examines Amazon's commitment to CSR, including its philanthropic efforts and adherence to the Carroll model of CSR, highlighting its contributions to society and employees. Furthermore, it explores the role of governance in Amazon's success, emphasizing its impact on various stakeholders. The report concludes with a discussion of the findings, along with recommendations for the company's future strategies.

GLOBAL FAMILY
BUSINESS

Table of Contents
INTRODUCTION...........................................................................................................................1
THEORETICAL FRAMEWORK...................................................................................................1
Model 1.......................................................................................................................................1
Model 2.......................................................................................................................................2
Model 3.......................................................................................................................................3
ANALYSIS......................................................................................................................................6
Model 1.......................................................................................................................................6
Model 2.......................................................................................................................................7
DISCUSSION .................................................................................................................................7
RECOMMENDATION ..................................................................................................................8
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Amazon is a technological company which includes various services & products in its
portfolio an this are related to e-commerce, artificial intelligence and cloud computing. It is the
largest online trading company which provide online services and it has its headquarter in
Seattle, Washington, U.S. This repost explains business environment and its affects on Amazon.
Further, this repost includes include implementation of Corporate social responsibility in
company. Furthermore, this report includes an analysis of business environment factors, its
impact and gap in practices used by company. Moreover, this report analyse growth model and
its impact. Further, this report discussed what is achieved by company. At last, this report
elaborate ideas & recommendation offered to business.
THEORETICAL FRAMEWORK
Model 1
Global Environment
Global environment consist of various external factors which affects operations of a
business and this factors cannot be control by companies. If Amazon want to operate its business
than it has to keep in mind all the environmental factors because Amazon offers its products &
services across the globe. Company has to adapt all the environmental factors of the different
countries such as culture, ethics, norms, population and demand & expectation of customers of
different countries(Crowther and Seifi, 2018).
 Adaption- Amazon is offering its services in more than 100 countries & for achieving
success of its operations in all the counties company has to follow all the environmental
factors of different countries such as political factors, economic factors, environmental
factors, technological factors and social factors. For Example- company is operating in
United Kingdom, China, India and Canada than company has to adapt or make different
decision making policy, rules, guidelines & techniques for each of the countries
according to their environmental factors.
 Culture- For establishing business in the global market Amazon has to provide its
services & products according to the requirement of culture of each country. For
Example- Individuals of U. S. follow western culture and they prefer to follow culture of
many counties. Whereas, individuals of India follow traditional culture & ethos. Thus,
Amazon has to develop its services according to the requirements of culture of different
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country to sustain in the global market and this leads company towards achieving success
of its business.
 Distance- Amazon served its products & services across the world it operates in 5
continents and in more than 100 counties worldwide. Thus, distance covered by company
is large and which helps the company in achieving long-tern success in the global
environment. Further, if firm expands its business in more areas where it does not exist
before and offers its services according to the requirement of that area than it can enhance
its profitability and market share(Unit, 2015).
 Diversity- Diversity is expansion of offerings of products & services of Amazon. For
operating business in the global market company has to increase range of its products &
services. If company offer many types of services than customers get attracted as they
have more options to chose form. Thus, it increases customer base and helps the company
in sustain in global market and meeting its objectives.
 Local Norms- Rules & Regulations of each country are different. Thus, Amazon has to
make decisions and establish different norms of working for each country. Which in turn
helps company in smooth functioning of its business in all counties across the globe.
 Cultural Cues- Communication techniques and language differs from country to country
.Thus, for doping operations in each country company has to develop training and
recruitment programme for each country and develop its website according to the
linguistic culture of each country. These helps company in dealing with its customers and
it also helps in building relationship among customers & company.
Model 2
Corporate Governance Model
Corporate Governance model helps Amazon in operating its business as it is operating in
various countries across the world. This model provides various rules, guidelines and processes
through which company can operated & controlled. This guidelines is beneficial for
shareholders, managers, customers, suppliers and community of Amazon because it protects
interest of all its stake holders. Their are various models of Corporate Governance such as
Anglo-US Model, Japanese Model, German Model and Social control model. Amazon uses all
this models because it operates in many countries. This all models are discussed below-
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 Anglo-US Model- Amazon use this model to protect rights of shareholder and members.
This model is applicable on various countries such as America, Canada, India and
Australia. According to this model Directors of company are independent to make
decisions and it helps Amazon in protecting rights of its members.
 German Model- It is a two tier model and it applied on subsidiaries of Amazon operated
in Europe. In this model supervisory and management board controls all the operation s
of Amazon. Members of this board are elected by shareholders. Thus, it helps in
protecting interest of stakeholders of Amazon.
 Socio Cultural Model- According to this model corporate governance includes all its
stakeholders in its board so it is the best model of corporate governance and Amazon uses
this model in all its businesses. This model keep in mind all the aspects of stakeholders
and it helps Amazon in grow in market because if stakeholders of company are satisfied
than that leads to increase in customer base & market share of company.
Model 3
Corporate Social Responsibility
Corporate social responsibility is a business model developed by each organisation which
works towards the accomplishments of their social responsibility towards companies
stakeholders, public and itself. With this model Amazon consider all the factors affecting society
such as economic, environmental and social. Adoption of this model by Amazon helps the
company in enhancing its brand image because it is a philanthropy business.
Philanthropy is a financial model which provides fund for the development & welfare of
society. Philanthropy business is a type of business which is established by volunteer efforts and
this type of business and main aim of this type of business is offering quality products & services
and for the welfare of the customers. Philanthropy also helps company in making changes in the
social factors which are beneficial in the welfare of society. Business of Amazon is also a
Philanthropy business because it offers its products & services to the place of customers they do
not need to go to the market to buy product and it also reduces their time. This business also an
individual initiative taken by Jeff Beccoz in 1994.
Philanthropy & CSR both are related with each other because focus of both of this are
promoting welfare of individual of society and providing quality life to customers. But, CSR
helps in development of both society and company whereas philanthropy only promotes welfare
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of society and its people. Amazon does not need to change its policies according to change in
philanthropy but in the case of CSR model company has to change its policy in accordance with
change in beliefs and values of society(Ward, 2016).
Corporate Social Responsibility model helps company in providing sustainable growth
and achieving long term success in up coming years. If company adopt a policy which directly
contribute to society than customers of company gets satisfied and satisfied society & customers
helps company in achieving success. Business of Amazon is multinational thus it has to follow a
strong ethical policy for its employees, stakeholders and competitors. CSR model is beneficial
for Amazon for enhancing & motivating employers & employees of company. According to
Carroll model of CSR Amazon has to follow various responsibility which are discussed below-
 Philanthropic Responsibility- According to the Carroll model it is responsibility of
managers of Amazon to promote welfare for citizens of society and company is
responsible for giving finance for the good of society.
 Ethical Responsibility- Managers of Amazon is responsible for offering services &
products by keeping in mind ethics, values, belief's, attitude and opinion of individuals of
society.
 Legal Responsibility- All the legal rules & provisions made by government for the
welfare & protection of society are to be followed by managers of Amazon. If company
does not follow this rules & provisions than its has to pay the consequences.
 Economic Responsibility- Economic responsibility of Amazon is to provide goods &
services which are affordable by the individuals of society.
Amazon is number one company in the world in for following best CSR policy and it initiates
various CSR programs which are discussed below-
 Amazon started a program in 2016 to donate free food to the citizens of America. This
enhances profits of company by 4% in financial year 2016-17.
 Company establishes 61 libraries in Kenya and encourage people of Kenya to read online
books(Neubauer and Lank, 2016).
 Amazon also develops various programs for empowerment & education of its employees
and workers by 95% of tuition fees, provides pay to quit offers which helps employees in
thinking what they doing and is it good for them or not. This initiative gives company
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motivated employees and it helps company in enhancing its performance and thus profits
of company is increases.
 Amazon also contributes to environment by establishing efficient use of energy. In 2017
Amazon launched Wind Farm Texas for generating clean energy and it also established
renewable energy sources. This techniques used by company reduces pollution and
problem of carbon footprint and customers also prefers to purchase products which are
environment friendly. Thus, this enhances customer base of the company.
 Waste reduction & recycling programs are also done by company by introducing
frustration free packaging which reduces cost of packaging material this in turn enhances
profits of company and helps company in further success.
 Amazon also contributes to charities and donate funds for the welfare of
society(Hamilton and Webster, 2018).
Corporate social responsibility helps Amazon in reducing its packaging and shipping cost which
directly enhances profits of company and promote growth of company in global market.
Governance refers to all the activities and procedures required to regulate or
operate business of Amazon. It also includes continuous monitoring & controlling of procedures
and making changes in these guidelines according to change in belief's and values of society.
Governance manage all the operations & activities of companies and if operations of company
are managed in a well manner than that leads to success of company. In Amazon governance
plays a vital role in achieving success because all the operations of company are managed at all
levels of hierarchy and if there is any problem than that will be solved instantly which helps
company in establishing smooth functioning of its business. Governance helps company in
achieving its goals and objectives by managing all the legal & ethical issues related to
shareholders, employees, employers, stake holders and suppliers of company. Governance in
Amazon also helps company in dealing with its customers and helps company in satisfying
customers. Thus, it is important for company in enhancing profits, customer base, market share
and performance of employees of company. Which in turn contributes towards success & growth
of family business. A strong governance should gives qualified & skilled mangers and leaders
which helps company in making decisions and regulating policies with in organisation. These
helps Amazon in building positive brand image and establishes healthy culture at work place.
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ANALYSIS
Model 1
Model one which include Business Environment is followed by Amazon because
company is operating in many countries across the globe. Thus, it has to analyses all the factors
of global environment which affects operations of company. Amazon analyses this factors, their
impact and improvement done in those environmental factors with the help of PESTEL Analysis,
which is discussed below-
 Political Factors- Political Factors includes taxation policy of government, exchange
policy, government stability and various other policies of government. For operating
business in various countries across the globe Amazon has to follow policies of
government of each country and if company does not follow these policies than it will
negatively impact company. Company cannot offer its products & services in a country
who's rules & policies are not matched with company. Amazon improves this factors by
adopting rules & regulations of each country, company has its own guidelines and rules
for doing operation in different countries(Kaplan, Robert and Norton, 2016).
 Economic Factors- Economic factors includes inflation, exchange rate, interest rate and
tax rate of economy of each country. This factors affect purchasing power and income of
individual of country and it also has an impact on profits, demand and supply of products
& services of amazon. For Example- if there is a situation of inflation in U. S. than
purchasing power of customers of company decreases which reduces profits of company.
For removing adverse impact of economic factors Amazon set different financial policies
for different economy.
 Social Factors- Social factors consist of opinion, attitude and values of individuals. As
Amazon is a global business giant different social beliefs affects companies operation
differently. To overcome from this problem company offers products & services
according to the culture and ethics of different countries.
 Technological Factors- Innovation & advancement in technology is an another factor
which affects operations of amazon because amazon offers all its products & services by
using online platform and it also offers technological services. Thus, company has to
improve its technology with the change in innovations in technology. If company cannot
resolve adverse impact of technology than it cannot run its bushiness successfully.
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 Environmental Factors- Environmental factors such as pollution, earthquake, rainfall
and carbon footprint affects demand & packaging process of Amazon. Amazon improves
problems affecting from this factors by offering environmental friendly packaging and
recycling of packaging of its products & services.
 Legal Factors- Legal factors such as various legal laws & provisions regulated by
government for welfare & protection of employees & customers of Amazon. If company
does not follow this provision than it can not sustain in global market. Amazon is
growing in global business environment because company is following various act such
as data protection act, equality act and health & safety act.
Model 2
Corporate social responsibility is a growth model implemented by Amazon which helps
company in enhancing its operations & provides growth of its business. It is analyzed that
implementation of this model by Amazon enhances economic return of company by 25% in last
5 years which contributes to overall economic growth of company by 27% in last year. Further, it
is analysed that implementation of CSR also increases revenue, customer base and market share
of company globally. This model also helps company in generating employment in economy and
most favourable advantage of this model is it promotes recycling and reduces wastage of
resources which is further beneficial for environment. By implementing this model company
focusing on reusable packaging techniques which in turn enhances profits of company.
DISCUSSION
By implementing various practices such as CSR and by analysing business environment
Potential growth of company can be seen in global market. Company is able to deliver its goods
& services in more than a hundred countries and that too are according to the culture, demand,
technology and economy of each country(Fozer, Benko and Mizsey, 2017).
After achieving growth in global market there are gaps or problems in warehousing &
Supply chain management of company. Sometimes, company faces a problem in delivering
products at a right location and problem of delivering different product from what they are
supposed to be order. SCM management of company is also not cost effective so company has to
develop a technique which eliminate interference of mediator. Thus, it minimises cost of SCM.
Amazon is also doing overseas international business by delivering its products &
services to those countries and by receiving online orders with the help of online websites and
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mobile apps. Amazon can move further by expanding its business in more countries and improve
operations of its overseas international business because profits of company is decreasing due to
expansion of overseas international business.
Marketing strategies of company is getting strengthen as Amazon uses digital technology
in promoting its products & services which further beneficial for company in expanding its
business and increasing customer base & market share. Promotion streategy of Amazon is
improving day by day firm is adapting changes in digital technology and modified its promotion
strategy according to the requirement of market & demand of customers.
RECOMMENDATION
It is recommended to Amazon to do more focus of recycling & use of green packaging
technique which helps company in sustainable growth and achieving objectives of corporate
social responsibility. Company should use Lien Management & Six- sigma theories for reducing
wastage and it also helps company in minimising cost. Amazon should use electronic vehicles
for delivery of its products which improves CSR of company and that directly helps company in
improving its profits & revenue. CSR also helps company in providing sustainable growth of
companies business. It is also recommended to company to provide the shortest route to its
employees so that pollution can be reduced and it also contributes to CSR(Srdjevic, Bajcetic and
Srdjevic, 2015).
CONCLUSION
This report outlined model of business environment. Further, this report summarises
model of Corporate Social Responsibility. Furthermore, this report outlined an analysis of
model of business environment. Moreover, this report concluded an analysis of Corporate Social
Responsibility model and impact of implementation of this model. Further, this report outlined
a discussion about the achievement and gaps after implementing various best practices. At last,
this report concludes a recommendation of successful practices offered to company.
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