Applied Corporate Strategy Report: External Analysis of Amazon

This report provides a comprehensive analysis of Amazon's corporate strategy, focusing on its external environment, internal resources, and competitive advantages. The report begins with an introduction to corporate strategy and its importance, followed by an in-depth examination of Amazon's external environment, including economic, legal, technological, competitive, and socio-cultural factors. It then assesses industry attractiveness using Porter's Five Forces. The report also evaluates Amazon's resources and key competencies, identifying strengths, weaknesses, opportunities, and threats through a SWOT analysis. Furthermore, it applies the VRIO framework to analyze Amazon's core competencies and gain a competitive advantage. The report concludes with a discussion of strategic recommendations and a summary of the key findings. This analysis provides valuable insights into Amazon's strategic positioning and its ability to navigate the challenges and opportunities in the e-commerce industry.

Applied Corporate
Strategy

Table of Contents
Applied Corporate Strategy......................................1
Introduction .....................................................................................................................................1
Task .................................................................................................................................................1
Discuss the external analysis to determine set of opportunities & threat also assess industry
attractiveness..........................................................................................................................1
Discuss the resources and key competence to determine the strength and weaknesses also the
core competences....................................................................................................................4
SWOT Analysis......................................................................................................................1
Determine the strategy using SAFe tests................................................................................3
Conclusion.......................................................................................................................................6
References........................................................................................................................................7

Introduction
A Corporate strategy is defined as the long term goals set by the organisation in order to
achieve organisational objectives and motivating employees to achieve those corporate goals and
objectives effectively, strategy is a proper set of plans in order to achieve set vision and mission,
long term goals and objectives of the company. Corporate strategy plays an important role in
enhancing the performance of the organisation by proper formulation of their plan and
motivating employees to achieve those goals. In this report Amazon is taken as the base
company. Amazon is one of top five American E-commerce company, it was founded in 1994 by
Jeff Bozos headquartered in Seattle, company offers wide variety of services. This report
includes detailed description of external analysis in order to determine the opportunities and
threats also the resource and important competences to determine the strength and weaknesses
and core competence is also explained. In addition to this the strategy using SAFe test is also
highlighted in this report.
Main Task
Discuss the external analysis to determine set of opportunities & threat also assess industry
attractiveness.
The business environment includes all the external and internal factors that has direct
impact on the functioning and profitability of the business, these factors are generally not in
control of the business. Business environment helps business to identify the number of
opportunities and threat available and the corrective actions that can be taken (Bhasin, 2017). In
context to the business environment analysis the external factor is taken into consideration,
which are discussed below:
Economic environment: The economic factors are the factors that effects profitability
and functioning of the business, whether it is online business or offline business, it has
significant impact of the functioning of the business, economic fluctuations can effect the
functioning of the business. In case of e-commerce industry, greater economic factors can lead to
the more growth and increasing profitability and whereas any economic slowdown can effect the
e-commerce business (Bravo and del Pilar Pérez, 2018).
In case of e-commerce industry, strong economic environment helps in the growth and
profitability of the business, there can be number of opportunities for the e-commerce industry as
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strong e-commerce industry can help in increasing their profitability and enhancing their
corporate strategy.
Legal environment: Legal environment are legal laws and rules that can sometimes legal
restriction for the business, strict legal environment can effect the smooth functioning of the e-
commerce business. In case of e- commerce business, they have their own team to handle their
legal problems. All the legal rules and laws needs to be carefully followed by the e-commerce
any failure can lead to the decreasing their profitability (Ciasullo and et. al., 2020).
The legal environment works as a threat for the e-commerce business, there are number
of law included in the legal environment that are needed to be follows by the industry, any kind
of strict legal environment will effect the profitability of the business and will work as threat for
the company.
Technological environment: The another type of external business environment factor is
technological factor, these are the most important factors in context to the e-commerce industry
as these industry are heavenly depended on the technology, each and every operations is carried
out using advance technology. The e-commerce business is mainly includes the use of advance
technology in order to satisfy their customers.
Technological environment works as an opportunity for the e-commerce industry, as
advance use of technology can help company in enhancing their productivity and smooth
functioning of the all the activities and operations.
Competitive environment: The competitive environment includes the level of
competition available in the environment, high level of competition can effect the industry. With
increasing use of digital platforms, players in e-commerce industry in increasing which makes it
competitive environment, level of competition in the e-commerce industry is relatively high.
With increasing competition in the e-commerce industry can create threat for the business
, as increasing competition in the competitive environment will effect their profitability and
functioning.
Socio and cultural environment: The socio and cultural environment factors of business
environment are the values of the business that helps in directing the business effectively towards
their goals and objectives. The sociocultural factors are long term and short goals that guides
them towards their achieving them (Clark, 2019).
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The socio cultural factors works as the opportunities for the e-commerce industry as this
environment helps industry to effectively analyse their goals and objectives
Political environment: The political environment includes the government policies,
legislation, political rules and so on which has direct impact on the functioning of any business
whether it is online or offline. In case of e-commerce industry which also operates globally has
to follow the political factors of different nation, countries having strong political environment
can effect the functioning of the industry (Doherty, and Smith 2020).
The political environment in case of e-commerce industry work as a threat, as strict
political rules direct impact von the functioning of the business.
Industry analysis
In order to analyse the e-commerce industry he porter's five forces are taken into
consideration which are discussed below:
Porter's five forces: it is one of the essential marketing strategy used by the marketing
manger in order to analyse the level of competition available in the industry. The level of
competition mainly analysed through five main forces which are discussed below:
Level of competition: This force is define as the number of competitors available in the
market, if the number of competitors are more in number it will effect the company. In case of
industry the level of competition in the e commerce industry is relatively high as the number of
competitors are more, the increasing number of national and international participant in the E-
commerce industry has lead to the higher competition. The level of competition in case of E-
commerce industry is relatively high.
Threat of new entrants: The another force is Threat of new entrant, under this the entry
of new entity with new and innovative products can effect the existing firms, in case of E-
commerce industry the threat of new entrants is comparatively low to moderate. As in case of e-
commerce is a growing industry in today's digital era and also there is necessity for huge
investment in technology, marketing. Also with availability of high competition in the e-
commerce industry, the threat of new entry is low to moderate (Dragomir, 2019).
Bargaining power of supplier: Under the bargaining power of supplier if the number of
supplier are less the bargaining power of the supplier will be low, in case of e-commerce
industry, there are set rules and regulation for the supplier, in this type of industry supplier works
according to the brands, the bargaining power is generally less under e-commerce industry as
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they can't function according to themselves they need to follow the proper code and conduct
formulate by the industry (Jafarzade Bishak, 2020).
Bargaining power of buyer: In case of bargaining power of the buyer, if the number of
buyers are less or the company has potential buyers, then in such case the bargaining power of
the buyers will be more. In case of e-commerce industry, with increasing demand of the buyers
and the increasing level of customers satisfaction with availability of substitute, it becomes easier
for the buyers to shift from one brand to another. Because of this the bargaining power of buyer
is high in case of e-commerce industry.
Threat of substitute: The last force of porter's five force model is the threat of substitute
products, it is defines as the availability of similar products and services same as of the
companies product and services which can be a threat for the company. In case of e-commerce
industry, the industry tries to maintain their competitive advantage by offering low prices or
providing value added or quality product and services as because of high competition, customers
can easily shift from one brand to another, so the threat of substitute is moderate to high in case
of e-commerce industry (Linneberg and Nielsen, 2019).
Discuss the resources and key competence to determine the strength and weaknesses also the
core competences.
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SWOT Analysis
It is a useful concept to analyse an organisations strengths, weaknesses, opportunity and
threat. It helps an organization in terms of what they do well, to identify the loosing part, Reduce
the risks, and take advantages of key to success. In context to Amazon, SWOT analysis
framework shows that how one of the leading retail store take benefit of its competitive retail
store to become the dominant player in the retail industry (Murmura, and et. al.,2017).
Strength Weaknesses
 Amazon provide an experience and
service that was not offered before,
that's why amazon has a brand identity
that was more powerful than any other
book seller.
 In addition to this, the company gives
delivery on time and consumer
satisfaction on products that is the
reason, company can maintain its brand
image.
 The present weakness of amazon is the
challenges that limit its business growth
as there are so many competitive retail
store out in the market place.
 As amazon provides free shipping to its
customer, that can make amazon in
danger of losing its margins.
Opportunity Threat
 Amazon can gain partnership with
other firms especially in case of market
development.
 Acquiring online retail store can
increase the flow of market share and
reduces competition level (Pirrong,
2020).
 The biggest threat to amazon success is
the level of concern over online
purchasing because of revealing the
identity through hacking which expose
the consumer data.
 The biggest threat is competition,
amazon has so many competitors such
as walmart, ebay that gives a tough
competition to amazon with their
product and services.

VRIO Analysis
The VRIO analysis is defined as the strategic tool used by the marketing manger in order
to analyse the core competence of the industry and the availability of the resource, it helps
business in gaining competitive advantage in the market. The VRIO stands for valuable, rare,
inimitable and organised. In context to Amazon, the VRIO analysis is discussed below:
Core
competency
Valuable Rare Inimitable Organised
Brand Name Brand Name Brand Name Brand Name Brand Name
HRM HRM HRM HRM HRM
Large delivery
network
Large delivery
network
Large delivery
network
- -
Growing diversity
of online
business
Growing diversity
of online business
- - -
Brand name: Amazon is one of the top e-commerce brand, also company is providing
high customer satisfaction services which has helped them in building strong brand image
globally. The brand name of the company is famous world widely which makes it valuable and
rare also on the other hand the brand image of the company is imitable and organised. This core
competency of the company leads them to gain competitive advantage in the market.
HRM: The another strong core competency of the company is its human resource
management, company has strong human resource department globally which makes it valuable
and rare for the company as it is also inimitable and effectively organised, this core competence
helps in gaining competitive advantages in the market.
Large delivery network: The another core competency of the amazon is large delivery
network, company serves worldwide, so they have large delivery network in order to satisfy their
customers, in case of company their large delivery network is valuable and rare as there are
number of e-commerce industry it is inimitable and not organised. This core competency of the
company makes it temporary advantages for the business.
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Growing diversity of online business: With increasing demand of online business, the
company's growing diversity of online business is valuable but not rare and organised also it is
inimitable. It leads to temporary advantage for the company (Srinivasan, and et. al., 2019).
Determine the strategy using SAFe tests.
Strategy evaluation is the process of measuring and evaluating the strategy of the
business in order to achieve their goals and objectives. It is the overall evaluation of the
organisational performance so that their performance can be enhanced and desired corporate
goals can be achieved effectively. In context to the amazon, in order to evaluate the given
strategy the three SAFe tests can be used which is discussed below:
SAFe Tests: The test is used to evaluate the strategy, the SAFe test stands for the
suitability, Acceptability and feasibility. This test helps in analysing the suitability of a strategy
in the industry and also its acceptability and feasibility in the industry. The SAFe test in context
to the chosen company to evaluate the strategy is discussed below:
Suitability: The first strategy included in the SAFe test is the suitability strategy, is one of
the most important strategy used in order top evaluate the suitability of a strategy in a company,
it helps in evaluating whether a strategy chosen will work effectively or not in situation.
TOWS Matrix: It is one of the essential strategic tool used to measure and evaluate
strategies of the strategies and its objectives, it helps in analysing the strength and weakness of
the company and the availability of opportunities and threat. The TOWS matrix in context to the
strategy evaluation is discussed below:
Strength Weaknesses
Opportunities Amazon has huge availabilities
of opportunities in the
growing technological
environment also in
economical environment, also
the company has strong brand
name globally.
Increasing demand of online
business and digital business is
an opportunity for the business
, also company can create
offline business stronger as the
physical presence will create
more opportunity for the
company. The weakness is that
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company offers free shipping
to customers which can effect
their proficiency.
Threat The amazon is an e-commerce
industry, having strong online
technology and taking
corrective corrective measures
becomes important as
increasing cyber crimes can be
threat for the company. The
strength is that company has
strong information technology
applications.
The threat for the company is
from the increasing online
safety, company can move
towards creating their physical
presence in order to reduce the
threat and can also analyse
their political and competitive
environment more effectively.
From the above discussion, the suitability of the corporate strategy will be in case of
strength opportunity threat, company needs to consider their strength and weakness in ordeer to
evaluate the suitability of the their corporate strategy.
Acceptability: The another strategy of SAFe test is the acceptability, under this the return , risk
and stakeholders reaction about the particular strategy which is being formulated is measured,
this is all about the acceptance of the strategy, the marketing manager evaluate the all the risk
and returns associated with the strategy. And the expectation of the stakeholders form the return
of a particular strategy. In case of risk, the failure of the strategy is measured which can impact
the profitability and functioning of the business.
Power/Interest matrix: The power interest matrix helps in analysing the power and the
interest that stakeholders hold in a project, this matrix helps in analysing the level of interest and
the power that the stakeholders has in a project, it allows company to effectively mange their
stakeholders. In the power/interest matrix the stakeholders are arranged according to their level
of interest and the power they hold in a company (Yao and et. al.,2019). The power/interest
matrix in context to the Amazon is discussed below:
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Amazon's stakeholder: The company's stakeholder has great influence towards the
functioning of the company, managing them them helps in enhancing the performance of the
company. The main two stakeholders of the company and their expectations are discussed below:
Shareholders( investors): The shareholders plays an important role in the functioning
and in the frormulation of company's strategic objectives effectively. The investors have high
voting power but whereas the low interest of any corporate strategy. Their expectations are
mostly getting high returns on the investments which should be evaluated effectively.
Top management: The another one of top management, they have both high interest and
high power in the formulation of corporate strategy, their expectations are mostly enhancing the
profitability of the business and also increasing their performance.
In case of chosen company is is effectively satisfying their shareholder, and their
expectations are effectively monitored which can lead to the acceptance of the corporate strategy,
satisfying the shareholders helps in effective formulation of the strategy effectively.
Feasibility: The feasibility is the effectiveness of the corporate strategy, in case of the
feasibility of the corporate strategy, factors that needs to be considered in order to evaluate the
feasibility of the strategy can be the financial resource, the availability of the financial resources
plays an important role in formulation of effective strategy also the skills like leadership skills
for formulation and implementation of the strategy, also the planning and controlling are also
equally important, in addition to this motivating team towards their achieving desired goals
effectively plans an important role in evaluating the feasibility of the strategy.
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Conclusion
From the above report it can be concluded that corporate strategy plays an important role
in the effective formulation of the corporate strategy, it helps in the proper evaluating the
suitability, acceptability and feasibility of the corporate strategy in the organisation. The
corporate strategy helps in the formulation of long term and short term goals of the organisation
and motivating employees to achieve those goals. This report includes the external analysis in
order to identify the set of opportunities and threats available and assess industry attractiveness
in the industry also the resource and core competence of the organisation in order to identify the
strength and weakness is also identified. In addition to this the proper evaluation of the strategy
is also highlighted.
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