Strategic Management Report: Amazon's Internal and External Analysis

This report provides a comprehensive strategic management analysis of Amazon, a leading e-commerce company. It begins with an introduction to strategic management and its application to Amazon. The main body of the report comprises three key tasks. Task 1 discusses Amazon's strengths and weaknesses, utilizing a SWOT analysis to identify internal factors. Task 2 examines the key issues Amazon faces at the national, industry, and global levels, employing Porter's Five Forces model to assess the competitive environment. Task 3 delves into Amazon's innovation strategies, analyzing its internal and external environments using PESTLE analysis. The report concludes with a summary of the findings and highlights the importance of strategic management for Amazon's continued growth and success. The report emphasizes the importance of innovation and adapting to changing market conditions.

Strategic management

Table of Contents
INTRODUCTION...........................................................................................................................3
Main Body.......................................................................................................................................3
TASK1.............................................................................................................................................3
Discuss strength and weakness of company...........................................................................3
TASK 2............................................................................................................................................4
Key issues faced by organisation at national, industry and global level................................4
TASK 3............................................................................................................................................6
Analysis of Innovation along with external and internal environment..................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Strategic management refers to the ongoing planning, monitoring along with analysis and
all necessity assessment in an organisation where it needs to meet the goal with objectives. It
involves the setting objectives, competitive environment analysis, evaluating strategies,
analysing internal environment and assuring that management should implement the strategies
within an organisation. There are many strategies which are there having the aim for higher
competitive advantages (Monteiro 2017). This report is related with company Amazon which is
having e-commerce business internationally. Jeffrey Preston Bezos is known as the founder of
multi-national tech company Amazon. Having the headquarter in Bellevue, US. This report
comprises of internal and external analysis with using the appropriate tools like SWOT and
PESTLE analysis. Along with there are different strategies which are also going to be discussed
in this report which implies the future growth along with success of the company
Main Body
TASK1
Discuss strength and weakness of company
It is analysed that Amazon is a multinational company that is working at global level in
different countries. It is consider as a e-commerce giant which provides a range of online
products through online platform (Hitt, Ireland and Hoskisson, 2016). Organisation is well
known and preferred by customers due to its remarkable services and easy policies. Amazon
make sure to provide timely services to end users with their efficient logistic system. In addition,
company make it possible to available all necessary things at a single platform for the ease of
customers. All things related to basic necessities whether home appliances, electronics,
accessories, clothes can be found at the website of organisation. It is monitored that entity is
working in diversify areas such as financial services, entertainment, media,and more that helps to
maintain positive brand image in market. Customers have higher trust over company so, it is able
to maintain the position of market leader in e commerce segment. In context of Amazon, SWOT
analysis is given as under:
Strengths: There are several other companies such as E bay and more are also working in
similar field but Amazon is still consider as market leader. Main reason behind this is the
effective strategies, continuous innovation that helps organisation to secure its position at market

place regardless of higher competition within industry (Khaba and Bhar, 2017). It is seen that
company adopt several innovative as well as creative approach which are essential to serve the
target segment in better manner. In addition, quality products at reasonable price also provide an
edge to firm over other competitors. Most crucial strength of Amazon is effective logistic
management system which make it enable to provide goods and services to customers reside at
different location.
Weaknesses: Here, organisation has been diversified business in another fields like
financial services, entertainment, media and so on. It may change existing brand image of
organisation among target segment. In order to gain competitive edge, they offer goods at lower
price thus not able to generate sufficient profit margin. Further, Amazon has been facing several
controversies and some of its product have proved failure such as fire phone and Kindle fire. In
addition, organisation was also involved in the case of tax aversion that harmed its brand image
in market.
Opportunities: There are numerous opportunities are present at market that can be avail
by Amazon to inflate its current sales and profit margin(Yogi, Rizal and Suharyo, 2017).
However, company is currently working in nearly 15 countries at global level and has the scope
to expand business in some emerging countries such as Asia and more. To take the benefit of
customer's faith, they can also initiate physical stores at some selective locations.
Threats: There are several threats are also associated with organisation that may affect its
existing market share. It is analysed that business model of Amazon is really simple and can be
easily copied by other companies. So, there are higher threat of competition from existing
rivalries such as Ebay, Alibaba and more. Further, entity is working in different countries so
highly affected with changing environment, policies, culture of those nations it is operating
business (Mohezar, Moghavvemi and Zailani, 2017). Therefore managers are required to be
proactive and adopt appropriate strategies to deal with future uncertainties in an efficient manner.
TASK 2
Key issues faced by organisation at national, industry and global level
Here Porters five force model have been applied in order to examine the constraints faced
by organisation at different level of market. Different factors of model are discussed as under:

Threats of new entrants: Here, new firms can easily enter in the existing market place as
the business model of organisation is not too complex. With the entrance of new companies
existing business of organisation may hammer due to decrease in sales and profit margin. It is
analysed that due Amazon has higher goodwill at market place so it is not easy for new firms to
compete with organisation.
Bargaining power of Suppliers: In this, power of supplier is measured in terms of
negotiation with managers regarding price of resources that they are providing to organisation. In
reference of Amazon, there are several suppliers associated with entity so their bargaining power
is low. Here, organisation is not deepened on a particular supplier rather they prepare necessary
rules mad regulations which need to follow by vendors. In addition, Amazon is a well known
brand so vendors have to agree with their policies to ensure long term association with
organisation.
Bargaining power of Buyers: It is analysed that bargaining power of customers of
Amazon is really higher due to the presence of other rival firms at market place (Vargha, 2018).
There are several other options available for customers so they can easily switch from another
brand. Presence of other firms within similar industry provides wider choices to buyers to select
an appropriate platform to purchase necessary products & services. Therefore, it is really crucial
for entity to prepare appropriate strategies to maintain existing customer base.
Threat of Substitute: In this substitutes are included that can be used by buyers instead of
products & services of organisation. For Amazon, there are several substitute available at market
place that is increasing competition for company at market place. Several companies retailers
such as Wallmart and more present in market. In addition, local retailers and physical stores also
provide substitute products to customers.
Competitive rivalries: It refers to the competition prevailing in existing market place. It is
analysed that Amazon is facing extensive competition in current market place (Jia, Sun and Koh,
2016). There are rival firms in each and every segment in which company is operating. For retail
sector Wallmart, TESCO are present in market. On another side, in entertainment and media
Netflix is giving extensive competition to Amazon Prime. So, managers are required to analyse
the position of rivalries before taking business decisions.

TASK 3
Analysis of Innovation along with external and internal environment
Innovation:
This is one of the most important things which is having the ability to make any business
to top within less time. To survive in current market for longer period of time there is need to
innovate something new which can help in business to give advantage to business than
competitors. Amazon has introduced many innovative approaches in e-commerce fields. One of
the main innovation in this field that they made possible to get all necessary items at a single
platform without having any physical store. They also used the data driven along with customer
led innovation for advance and new product in market (Bassis 2018). They also use the one of
the effective software which is able to meet the requirements of customer without any time
lapses.
Advantages- This innovative approaches cater ease to their customer for easily getting the
products and services at their required places. This helps the company to get the competitive
advantage. New innovation also attracts customer which can help in increasing the customer
base.
Disadvantages- Innovation in technology creates the separation from being social which
is resist in interaction with others which is not good for the society and may creates issues in
longer period of time. This also creates dependency to full fill their requirements and needs.
Analysis of external environment
PESTLE analysis is carried out for the purpose to monitor the external conditions which
is discussed further.
Political factor- As per Amazon is having its business in different countries they are the
one who are getting affected with change in their political environment which is related with
such countries. In some countries like UK and USA company had to increase wages of their
employees due to political pressure (Botschen and et. al., 2017). Whenever there is change in the
government rules and regulations, company need to have some modifications in that company
policies accordingly for that specific company. In COVID time, company got so much loss due
to change in the rules and regulation which was necessary for the safety which was due to
political factor.

Economical factor- Here, the company profit is directly affected by the economy of the
country which allows their customer to purchase their products. Having high economy allows
their customer to make more purchase whether having lower economy restrict people purchasing
power. Company is also providing contribution in the economy of the country by providing job
opportunities to that country people. This helps in giving the better life to their employee for
better lifestyle.
Social factor- Company is able to provide their products to their customer on given
period of time even faster which makes the people dependent on the online services which also
helps in saving the time specially in this COVID situation which is beneficial for the company
and the country people too (Qazi 2018). Amazon is able to manage the logistic management
system which creates the higher job opportunities. This helps the society to have better lifestyle.
Technological factor- Company is using the new and innovative technology which is
one of the best for the company which attracts huge customer. Here, in year 2017 there was an
initiative was there which was using the drone for the delivery of the product which also used in
the COVID time for the purpose of contactless delivery. This provides the contribution in the
technology which is by the company for the development. Amazon is spending huge amount in
research and development for providing better service to their customer.
Legal factor- There are many rules and regulation along with ample of laws which have
to follow by the Amazon to run their business in efficient manner. To avoid the future disputes or
legal policies company follows the labour law, data protection law, consumer protection law and
many more. In this COVID time, there are different laws in different countries which need to
follow by the company.
Environmental factor- Each and every organisation need to protect the environment and
in relation to this Amazon has taken many initiatives. There are some of the initiative and
different activities like recycling, reduction in use of plastic, reusing and many more to protect
the environment (Oliveira and et. al., 2016). Company is also using different techniques
regarding the waste management. Company has the goal to reduce up to 50% of the shipment
carbon free which can play an essential role in environment protection. This helps the company
to make higher brand image.

CONCLUSION
From the above discussion, it can be concluded that there is need of strategic
management for preparing an appropriate plan for growth and development of the business.
There is discussion about internal analysis which is an essential to examine the weakness along
with capabilities of an organisation which can help one to conclude that SWOT analysis is able
to examine internal capability for preparing appropriate strategies. Here, PESTLE helps in get
the impact of organisational performance which is related with external factors. There is also
used of Porters Five Forces as strategic tool to prepare an effective strategies. There is also
discussed about the innovation with its positive impact and negative impact. Therefore, it can be
said that strategy plays an important role in growth along with development of business.

REFERENCES
The Books and Journal
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complementarities. Journal of Evolutionary Economics, 28(5), pp.1053-1080.
Botschen and et. al., 2017. Brand-driven retail format innovation: a conceptual framework.
International Journal of Retail & Distribution Management.
Hitt, M.A., Ireland, R.D. and Hoskisson, R.E., 2016. Strategic management: Concepts and
cases: Competitiveness and globalization. Cengage Learning.
Jia, F., Sun, H. and Koh, L., 2016. Global solar photovoltaic industry: an overview and national
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Khaba, S. and Bhar, C., 2017. Quantifying SWOT analysis for the Indian coal mining industry
using Fuzzy DEMATEL. Benchmarking: An International Journal.
Mohezar, S., Moghavvemi, S. and Zailani, S., 2017. Malaysian Islamic medical tourism market:
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Monteiro 2017. Scientists as citizens and knowers in the detection of deforestation in the
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Oliveira and et. al., 2016. Distribution of trace metals and Pb isotopes in bottom sediments of the
Murucupi River, North Brazil. International Journal of Sediment Research, 31(3),
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Qazi 2018. Acceptance of e-book reading among higher education students in a developing
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Information Systems, 27(2), pp.222-245.
Vargha, Z., 2018. Performing a strategy's world: How redesigning customers made relationship
banking possible. Long Range Planning, 51(3), pp.480-494.
Yogi, P., Rizal, O. and Suharyo, O.S., 2017. Feasibility analysis of naval base relocation using
SWOT and AHP method to support main duties operation. Journal of Defense
Resources Management, 8(2), pp.14-31.