Amazon Business Model: PESTLE Analysis and Future Outlook

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Table of Contents
1. PESTLE Analysis...................................................................................................................3
2. Strengths and Weaknesses of Amazon on the basis of legal frameworks.............................5
3. Three sectors in which new online business operates............................................................7
Reference:................................................................................................................................11

1.PESTLE Analysis
Political –
Amazon has been performing its business all throughout the globe for many years and has
attracted several users from various countries. As they operate all throughout the globe, it has
to be abiding by political standards of each and every country(D'Agostino 2018). Amazon
takes help from the government in supporting their trade, distributions and even profit which
is basically done through internet.
Economic –
The economic factor is also the main concern of the Amazon online business platform. If the
economy tends to be positive then the business will definitely flourish, so the business of
Amazon is definitely included in that. However, the retail is one of those industries whether
there is a beating around the economy but still the business will keep on earning its
profits(D'Agostino 2018). Amazon is not indestructible but there will always be need for the
goods those are to be sold by the retailer. Items of luxury and for entertainment purposes are
catered by Amazon in order to spend more and more on these things.
Social –
Amazon is creating social impact on the health and lifestyle of the public and this is due to
the lethargic behaviour within the customers, because they are ordering items for which they
are receiving all those items in front of the doors (D'Agostino 2018). The obesity among the
public is definitely increasing among the ages of adults and children which has increased
during the last decade. Amazon is making it easier for the public to stay in home and to
purchase whatever people like.
Technological –
Technology is the main factor of the Amazon, as this company is totally based on the online
activities of selling and buying various productsSo, it can be said that the adoption of the
digital technology by Amazon has created the purchasing and selling sphere for Amazon in a
more viable manner(Onyusheva and Seenalasataporn 2018).

Legal –
Just like the political factors there are also legal factors which Amazon has to comply and
oblige with. The most important factor of legality with Amazon that what kinds of products
are they selling and buying online while there are certain limitations in selling or buying the
product in several countries and it usually depends upon the legal status on the country which
is involved in this process. Amazon also gets affected by the cyber security bills(Onyusheva
and Seenalasataporn 2018).
Environmental –
From the last decade or two, environmental factors tend to be one of the main and most
important factors in processing of the business. Hence, it is noted that Amazon is very eco
sensitive as in they have changed several rules and regulations taking into considerations the
factors of the environment (Onyusheva and Seenalasataporn 2018).
Considerations in opening a new business
A research and study of the market must be done as an initial step of opening a new online
business. The step by step description is provided below to open a new online business.
1. Structure of the business – At first the business needs to determine what kind of
business it is going to run. If it is an online business then how many partners will be
there in the business or it would be a sole proprietorship business(Laudon and Traver
2016).
2. Planning of the business – The planning of the business needs to be done due to the
proper maintenance of the business strategy, so that in the future the company can
eliminate the risks which they are going to face in the near future.
3. Record Keeping – Presently the record keeping business is done online and through
software. Though Amazon has its own software to calculate every record or the
transactions being made (Laudon and Traver 2016).
Identification of the factors that may impact on the success of the business
Opening a new business has several risks factors from the competitors those exist in the
industry. Though Amazon is an online retail business, it has competitors like eBay, Otto,

Walmart, Alibaba, etc. But one of the biggest impacts on the Amazon’s success is that it
faces competition from the online retailers those who are established locally. Amazon needs
to look up on this matter and to take its own precaution in overcoming the conditions of the
strategy of the performance of the local market done throughout the globe. Amazon heavily
relies on the technology especially the online technology so as to distribute their products to
the consumers (Berssaneti and Carvalho 2015). This acts as strength of Amazon in making
the customer to get more attractive towards it. The basic advantage of Amazon is derived
from its leveraging of Information Technology and the use of e-Commerce as a scalable and
an easy way to organise the platform which ensures that the company is way far ahead of the
competitors in the market. Amazon also has its super systems of distributions and logistics,
where the company has been able to centralise satisfaction of the customers resulting in
deriving the competitive privileges over its rivals.
2.Strengths and Weaknesses of Amazon on the basis of legal frameworks
Amazon is based upon various strengths in the new emerging and technologically progressive
market and it can also ensure that the supply chain of Amazon throughout the globe is
channelized through several networks of storehouses whose value of substantiality is the
value those are provided for the stakeholders and for it. They are providing bills completely
through electronic medium either through mail or by posting the billing statement in the
personal account. Every tracking detail is now provided on their website and online payment
media has helped in making the environment as well as the business more sustainable. The
basic strength of Amazon is that it is completely linked with the new and innovative model of
technology which is easy to ensure the changing demands of the customer (Jurevicius2019).
Presently, Amazon is thinking more about the technology in getting the products delivered to
the customers very fast and without any hassle like they have thought about using drones and
other methods of shipping. Presently, they are much more inclined towards enhancing
physical and geographic locations all across the globe. Amazon heavily relies on the political
stability of the country and by taking help from the e-commerce. Amazon is making its
business more powerful so as the customers are able to get the products what they want to
purchase in a single day without taking any hassle. Now the products are easy to access and
convenient to buy.
Strengths:
 Amazon takes the initiatives of its
Weaknesses:
 Amazon has its history of flopping of

business based on the satisfaction of
the customer.
 The delivery network of Amazon is
very efficient.
 E-Commerce and IT leveraging.
 The cost of the model is low.
 Huge variations in products which
offers a strong selection of brands.
products.
 Unable to deal properly with the
counterfeit Chinese goods.
 Avoidance of tax and mounting of
debt.
 In the time of the core competencies
during the strategic benefits.
 Having near zero margins.
(Amazon.com Inc 2019)
Considerations of what funding might be available for opening the new
business
The funding is required for all the business as the preliminary start up fuel of the business.
The one and the most important thing is to have capital in one’s hand. Nowadays, one cannot
think of starting any business without having any capital or a lump sum amount of money.
Apart from this, the company has to allow many sponsors to give advertisements on the
business media or where the whole business performance and transaction is conducted.
Amazon, as it is the online business so it basically focuses upon the sponsors advertisements
through online media (Bellavitis et al., 2017). People get to know more about the products
from Amazon itself. The funding is also provided from the administrative bodies like
National Institutes of Health, Department of Food, Small Business Technology Transfer
Program. Just like this there are many finances those are available like self-financing, finance
taken from friends and families, small business administration loans, venture capital, angel
investor, crowd funding, peer to peer loans, incubators. Self-financing is very much necessary
so as to program the basic necessities of the business and for this reason one need to have the
capital and few owning be it land, house, gold, and other assets (Schell 2018). One can also
take help from their friends and families to help them providing with money as a loan with
very low amount of interest or with no interest where one has to pay only the principal
amount to his or her family member. Small Business Administrative Loans can be taken by
the owner of the business so that the owner has to pay a very little amount of interest against
the loan that has been provided. These banks are mainly formed so as to provide loans to
these businesses only. The business entity could also take help from the funding through
crowd by the websites like Kickstarter, artists, entrepreneur, charities, and individuals those

have been able to post online appeals for paying the cash. Some of the platforms of the crowd
funding have their own platform in determine significant aims for the company that has been
secured. If the aim is not achieved, then the funds could be returned to the donors. These
crowd funding platform also earn few commissions of the total money being called for and
though this they own fund their own business.
3.Three sectors in which new online business operates
Amazon plays a vital role in providing every necessity to the people all over the world. This
is because the range of products which Amazon sale and purchase is of different varieties and
kinds, while the customers feel convenient to buy their products with the products of
minimum price ranges to luxurious products. Amazon is mainly based on three sectors
mainly books, electronic gadgets, and clothing.
Books – Day by day the readers are increasing and which is why the demand for the
publishing of books are increase which further tend to increase the value of books in general.
Amazon provides a huge range of books with a high discounted price which includes books
from Pulitzer Prize Winner, Man Booker Prize, International Best Seller, National Best
Seller, etc. Even Amazon has its own Editor Pick books so as to assist the readers in reading
the books they want to read or to find such books if the readers are not aware of it. Amazon
also sells several other textbooks which are required for the student studying in schools,
colleges, universities and giving other competitive exams to acquire jobs. Even one can pre-
order the books prior to the release which will be having the signature of the writer. This is
like getting extra privilege for being an Amazon’s accountholder(Adams 2019). Now there is
trend to keep in factor the matter of the environment which is to use fewer amounts of
products that could lead to deforestation and harming of the environment. For this reason,
Amazon has come up with the idea of e-Book which in Amazon’s name is known as the
Kindle Edition of the book, apart from paperback and hardcover. It is a different gadget
where one can download several books in a pdf and can enjoy reading without taking any
hassle. Amazon provides huge discounts and offers on every books. Even they give the
providence to the customer to buy imported books with a specific cost of delivery.
Electronic gadgets – Technology is improving and side by side Amazon is embracing the
new and innovative technology while catering their services to the customers who are located
all around the world. As mentioned above, that the books are replaced by the huge demand of
Kindles. Likewise, due to the advent of technologies, the new gadgets is taking place and

making substitution to the older yet usable gadgets. Amazon sells electronic gadgets like
mobile phones, tablets, laptop, camera, T.V., washing machine, refrigerator, music system,
etc. Amazon also provides EMI services to the customer those who can’t make the whole pay
in a single time(Adams 2019). For this Amazon has developed itself more into the highest
seller of electronic brands all across the globe. It also provides privileges to the customers to
win electronic gadgets through playing quiz and winning several contests which is played on
their website only. Even customers on Amazon can pre-order those products those are not
launched in local retail market. The search options in buying electronic gadgets can be
customised where one can filter prices, brands, specifications, etc. Amazon provides huge
discounts on the festive seasons which may differ from country to country.
Clothing – There is an increasing change in the taste and preference of fashion in customers.
Customers are demanding more and more of fashion wear. Amazon provides a huge lot of
fashion clothing, accessories and apparels. Amazon sells clothing like menswear, womens’
wear, kids wear, perfumes, deodorants, shoes, bags, etc. The selected clothing are usually
selected by the designers those who give suggestions to the clothing department of the
Amazon to present the various kinds of designer dresses to the customers. Amazon can cater
to the change in the fashion trend of the customer. Customers are willing to buy one type of
dresses from one month and that same customer will buy a completely new and different type
of dresses in another month(Adams 2019). Like other online retail stores, Amazon also
provide huge varieties of products with huge variations in the price ranges, even they provide
discounts not only in the festive seasons or occasions but all throughout the year. They also
serve luxurious brands like Gucci, Armani, Chanel, Burberry, etc. Amazon also provides
discount voucher separately in the product package personally to the customers to let them
purchase the next products from them while availing huge rate of discounts.
Hence, it can be said that Amazon provides various products which they sell to the customers
located all around the world. Amazon values their customers and it constantly tries to develop
its online retail site to make more attractive towards the customers all around the globe. Thus
providing great economic changes in country’s GDP and this is because of the global
communication and transaction through the same platform and connection in every corner of
the world to know the customers and to make the best possible uses of the product (Adams
2019). But in very few cases the variations in products are very limited in some countries due
to their variations and difference in cultural backgrounds. For instance, products like fashion

wear are not in demand in Saudi Arabia or Pakistan. Books those are banned are not sold in
specific countries those who enlist the ban of those books.
Identification of 3 Human Resource policies and comment on their
importance to the work place
The work of the Human Resource Management team is to take control over the employees,
which is to ensure that the employee those who are working in an organisational workspace
must be satisfies. Human Resource Management team of the company is there to investigate
on the safety and security of the employees and to see if there is any communicational gap or
misunderstanding between the employees which may result in spreading of rumour and
disparity in the company(Bratton and Gold 2017). In this paper the three policies of the
Human Resource Management are presented they are like Equality and Diversity, Health and
Safety, and Equal opportunities.
Equality and Diversity – Amazon can provide equality and diversity within the workplace
through the implementation of gender sensitive programs. Though Amazon is creating a
workspace for the employees those who come up from different cultural backgrounds, yet it
employs more workers those are white men supremacist. This has created havoc in a diverse
background in the workplace environment of Amazon, considering Amazon to have very
racist prejudices(Bratton and Gold 2017). Amazon often employs workers those who are
from the privilege section of the society mainly the while supremacist male. Hence, Amazon
can be considered as a male dominated organisation with a very little amount of diversity and
equality. The workspace should be equal to every gender, welcoming and embracing the
people or the employees those are coming up from different cultural, caste, creed, racial and
religious background. Equality stands in a way where the workplace is safe for the workers
those who are women, trans people, or anyone belonging to the minority community.
Equality and diversity comes in the workspace where all the people working there feel free to
communicate with each other and respect view of each other.
Healthy and safety – The organisation must keep in mind in maintaining the workplace
safety and health issues of its employees. It cannot underlie the fact that workers in the
organisation are the main components of the organisation. So the organisation must look into
the health and safety of their employees. Amazon also seeks in providing their employees
with health benefits and other safety concerns. There are also options of the medical plan

which will allow the employees to choose only one plan which is necessary and perfect for
them and for their family members(Bratton and Gold 2017). Besides opening a health savings
account, various plans are enlisted including the plans for eye check-ups and dental care
services as well as Flexible spending accounts for dependant and health care. Accident and
health insurance policies are also provided to the workers who are full time employees while
parents are granted with a range of fully paid parental and maternity leave option prior to and
post birth or adoption of the child or children. Women can be on a menstruation leave
without any salary bluffs.
Equal Opportunities – The organisation should provide equal opportunity to all the workers
those who are working in the workspace. Gender sensitised working space must be provided
in order to maintain a neutral and peace working conditions inside the organisation. Men and
women should be provided with the equal amount of salary if they belong to the same
different and of the same designation (Bratton and Gold 2017). No workplace discrimination
should be done on the basis of the gender, class, race, religion, caste, etc. Every worker must
get their own and legible opportunities what they are liable to. The opportunities should be
based upon the talents of the workers and not upon where they belong from.
Reflective statement
This paper deals with the inner behaviours and models of the online retail business, Amazon
for which the basic structure is provided starting from the setting up of the business to the
analysis done on the company on the basis of PESTLE and SWOT analysis. This paper is
created to see whether Amazon is acting upon the policies of Human Resources and is
fulfilling the operation within the three sectors of the business. The paper deals with the
nature of performance of the Amazon Company and provides specific suggestions on the
basis of the human resource planning. This paper generally deals with the close assumption
of the planning and management of the new online retail business. This report is formulated
so as to determine the effective stages in which Amazon plays a vital and significant role in
helping the customers as well as the employees within the workplace of the organisation.
However, the retail is one of those industries whether there is a beating around the economy
but still the business will keep on earning its profits. Moreover, the trend of today is such that
the online retail business is blooming up which has led the GDP of the economy to escalate in
a geometrical progressive manner. At the very eventual stage of the report the paper has done

and shown the analysis of the program of the Human Resource Management duly considering
the effect of the managerial team of the Amazon Company.
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