Applied Corporate Strategy: Amazon's PESTEL & Porter's Five Forces

This report provides a strategic analysis of Amazon, a multinational technology company, focusing on its e-commerce, cloud computing, digital streaming, and artificial intelligence operations. It evaluates the external environment using PESTEL analysis, identifying political, economic, social, technological, legal, and environmental factors influencing Amazon's business. The report also employs Porter's Five Forces to assess competitive intensity, including competitive rivalry, bargaining power of suppliers, threat of substitutes, and the threat of new entrants. The analysis aims to identify opportunities and threats in Amazon's operating environment, assess its strengths and weaknesses, and provide insights into its strategic positioning and potential for sustainable growth in the global market. This document is available on Desklib, a platform offering a wide array of study tools for students, including past papers and solved assignments.

Applied Corporate
Strategy Assessment

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
Overview of the organisation......................................................................................................3
Evaluation of external analysis ..................................................................................................3
Internal analysis of an industry...................................................................................................6
Define the strategy evaluation ..................................................................................................10
CONCLUSION .............................................................................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
Every business organisation wants to remain in the competition for long term so they make
strategic analysis according to internal and external environment (Kurpiela and Teuteberg,
2022). Strategic analysis helps the organisation to execute their operation effectively and
effectively that leads to overall growth and success of the organisation. The analysis is done on
the basis of internal and external environment so that helps organisation identify the
opportunities and threats. In this report Amazon is a multinational technology company dealing
in variety of products and services. This report will be based on external analysis, threat and
opportunities, identifying strength and weakness of the resources utilized by organisation and
Porter's value chain.
MAIN BODY
Overview of the organisation
Amazon is a multinational technology company mainly focusing on e-commerce, cloud
computing, digital streaming, and artificial intelligence. It is founded by Jeff Bezos on July
5,1994. The company serves its products and services online to its customers such as Amazon
Fresh, Amazon prime, Kindle etc. The organisation provides its services to the customers
worldwide and deals in fashion industry, footwear, web services which helps generating large
number of employment.
Evaluation of external analysis
PESTEL analysis is the framework that helps every business organisation to make
strategic planning according to macro environment which helps in identifying threats and
opportunities. The analysis is mentioned below:
Political factor: The respective company gets opportunities from political stability as company
operates in UK where the government doesn't change the rules and regulation frequently.
This helps amazon expand its operation worldwide such as Australia gave opportunity to
Amazon to expand its operation (Chen, 2022). Here the company highly rely on the political
stability and e-commerce support by the government. Taxation and tariffs plays a great role
while operating the business as the government of the UK is already established so it doesn't
make frequent changes in these factors. So it helps amazon to operate its business very
smoothly. Due to political stability in the country the Amazon is is have stable financial

position that leads Amazon to be one of the biggest online retailer. Due to this it has
sustainable environment for many investors to invest in which leads to the growth of the
organisation.
Economic Factor: This factor can be an opportunity for the business because the it is online
based business which helps in developing more employment opportunities in the economy.
Due to use of high technology while operating online skilled staff are required so it helps in
reducing unemployment that leads in increase in living standard. As increase in spending
lead to the growth of the business organisation. This will help in making the GDP of the
country stronger and the inflation rate are also kept in balanced. Due to this the Amazon is
giving more focus on increasing the employment opportunities in the economy which gives
benefit to both the organisation and economy.
Social factors: This factor in the business can be threat as nowadays customers demand and
market preferences are changing frequently. Customer demands very unique and dynamic
products, If the company fails to provide the products and services according the customers
then it will face losses (Castro and Cobos, 2022).The amazon needs to keep its product and
services very unique so that customers retain within the organisation. The company should
make its website user friendly and customer grievances should be solved so that they retain
in the organisation. Customers plays very important role in business growth and success and
if customers fail to meet it affects the company in negative.
Technological Factor: The company should be very innovative to be successful. So by adopting
different technology the company can meets its customer satisfaction. The technology can
be opportunities for the Amazon as its serves its customers online so it has adapted different
technologies in order to meet the customer needs and demands. The new technology helps
the business to grow faster and generate more profits which will help in long term
sustainability. By adopting the new technologies, the company need highly skilled
manpower which will help in producing different types of products and services. This will
lead to the customer retention and the Amazon provides its services internationally which
helps customers to stay connected with the organisation through the technologies.
Legal factors: This factors comprises of all the laws as well as the regulations which are made
by the council of the nation. All these laws are made for the welfare of the society people or
for the protecting the interest of employees. It is very important for the management of the

business organisation to follow all the rules in order to make good relation with the nation
government. In context to the Amazon, the company management must have to follow all
the set rules which are made for the respective industry. The national council of the UK
made the strict rules, which sometimes act as a threat for Amazon. The E-commerce
regulation 2002 impose different types of obligations on the firm due to which its
functioning has been affected. If all the laws are properly follow by the company, then this
can be act as opportunity for them and help in developing decent relationship with the
government.
Environmental factors: This factor comprises of all the rules and regulations which are
developed by the nation government in order to protect the environment. This factor is
totally related to the ecological effect. In relation to the Amazon, green packing methods are
used by the company management for delivering the final gods to their customer instead of
plastic. By doing this, they save the environment to be get polluted (Gomes, and et. al..,
2020). This factors act as an opportunity for the firm and helps them in developing good
image in the market. The government of the UK is very concerned about their environment
if laws are not properly follow by the organisations then firms have to bear high
consequences like cancellation of license, patents and copyright cancellation and many
more.
Porters five forces _
this model aids in understanding the forces that create a impact o0n the firm and also impacting
the composition and product and service industry. This can help in determining industry
attractiveness growth prospect and also the opportunities (Al-Marzooqi and Nobanee,
2020) that also can evaluated competitive trends this considers several forces which are
follows :-
rivalries competition :- the co many has to maintain there position in the market as there is low
growth rate in the market. In this the firms have a high aggressiveness in the market as
there are a lot company rising tin the market and there are availability of affordably
clothings with the already establish brand and that leads to high competition
bargaining power of supplier:- it can be termed as the power that m,market hold over the
suppliers as there are a lot of and depending over the the number of supplier which are
available as there are several brands have tie with there own set of suppliers \

threat of substitute :- in the industry here the company lies in there is a continuous threat as
there is always change in the market trends and there are a lot of unorganised a sector that
offer cheap clothing but the threat they possess to the industry is very low so that-whys there
threat of substitute is very low(Parbat, and et. al., 2022)(
Threat of new entrant – this is related to how easy to enter into markets or entering in the
specific industry in context with the specific industry these are the capitalist type of industry
which means these industry needs funds so that they can establishing of the machinery so
that they can produce clothes and can run on high debts the threat of new entrant has
medium power.