INF11114 Digital Business Environments: Amazon Analysis Report

This report presents an analytical discussion on Amazon, an e-commerce giant operating through digitalization and physical stores. It details the rationale behind selecting Amazon, emphasizing its market presence and diversification, and assesses potential data sources like third-party reviews and media reports. The report includes both internal and external analyses, covering strengths, weaknesses, opportunities, and threats. It employs SLEPT analysis to examine political, social, economic, legal, and technological factors impacting Amazon. An online marketplace analysis further evaluates the company's current standing, identifying its strengths in customer service and market dominance, alongside weaknesses such as high seller fees and limited branding control. Opportunities are highlighted through Amazon's affiliation programs and expansion into physical stores. The report aims to provide a comprehensive understanding of Amazon's digital operations and strategic positioning within its business environment.

MANAGEMENT

Contents
Introduction...........................................................................................................................................3
Basis for the selection of an organisation..............................................................................................3
Assessment of potential data sources...................................................................................................4
Selection of analytical approaches........................................................................................................6
SLEPT analysis........................................................................................................................................6
Online Marketplace Analysis.............................................................................................................8
Conclusion...........................................................................................................................................11
References...........................................................................................................................................12

Introduction
The report brings out an analytical discussion on a company, which wholly operates through
digitalisation or a mixture of digital operations and the physical store. Amazon uses an e-
commerce platform to execute its transactions and offers its products through a website
platform. Amazon is a prominent e-commerce company who was started in 1994. The
company is highly induced towards growth by implementing its marketing strategies to
attract the customers and increase its customer base. The company grasp the changing
behaviour of the customers. The penetrating competition can be solved only if the company
fulfils its reputed image between its stakeholders and the third-party people. This report deals
with the internal and external analysis of the organisation1. Further, it states the reason of
choosing Amazon and assessment of its surroundings. The company is selected on the basis
of its area of operation and diversification, assessed through potential data sources such as
third-part reviews and the media reports. The internal analysis covers strengths, weaknesses,
potential opportunities, and threats. This assessment will suggest some important areas that
needs attention. The purpose of the report is to analyse the digital operations enabled with the
physical store2.
Basis for the selection of an organisation
The purpose of selecting Amazon is that the company is that Amazon is fully digitalised
which offers the products and services first in digital form. The company also has its physical
stores through which it grabs potential market with the scope of further development.
Amazon is an American-based e-commerce company that was established in 1994 and after a
1 Gregory, G.D., Ngo, L.V. and Karavdic, M., 2017. Developing e-commerce marketing capabilities and
efficiencies for enhanced performance in business-to-business export ventures. Industrial Marketing
Management.
2 Xu, J. and Song, Q., 2018. Analysis of the Influence Factors Affecting the Development of Cross Border E-
commerce in Gansu’s Small and Medium Sized Foreign Trade Enterprises. In MATEC Web of Conferences (Vol.
228, p. 05007). EDP Sciences.

certain period of time, Jeff Bezos incorporated the company3. The headquarters of the
company is in Washington. The company is world`s largest web based retailer in recent years
and it has been handling the competition. The company started its business from a bookstore
but after some time, the company continued to diversify the operation by including huge
range of products that is now stocked on store4.
The three main market divisions of Amazon are international, north America and the AWS
(Amazon Web Services). All these market divisions are dependent on some important
provisions of the commodities related to customers and also exporting the sales from the
suppliers and other subscription through North America that has the sites named as
www.amazon.ca, www.amazon.com.mz, and www.amazon.com. The company`s web
services segment focuses on sale of packaging, database, AWS, cloud computing, and other
useful offers related to organisations. The company offers huge range of products that it
offers from website. The company sells some of the products such as infant products, beauty
products, household products, lawn items, musical instruments, jewellery, and sporting items.
With the help of mobile phone access, the company uses several platform to offers its
services and items such as Kindle e-readers, fire televisions, Echo, amazon prime program,
and the Fire tablets and fulfil their orders through websites and the seller`s websites.
Assessment of potential data sources
Certain things have been considered before choosing “Amazon.” The organisation has huge
market share. Being most extended company in the industry; Amazon enjoys the benefits of
extraordinary sales that has resulted into increase in market share. By 2020, it is expected that
3 Fundable, (2019) Amazon`s story. Available on: https://www.fundable.com/learn/startup-stories/amazon
[Accessed on: 27/02/19]
4 Pappas, I.O., Kourouthanassis, P.E., Giannakos, M.N. and Lekakos, G., 2017. The interplay of online shopping
motivations and experiential factors on personalized e-commerce: A complexity theory approach. Telematics
and Informatics, 34(5), pp.730-742.

the entire retail sector is expected to grow till $28 trillion5. The company successfully covers
the media and journalism as it is said that media points out the attributes the success and
profitability of the company to AWS and its cloud computing division. Media declarations do
not take into consideration which most of competitors will not be able to get into the
computing infrastructural game. Recently, the company have boosted the marketing budget
39.2 percent to $10.070 billion, which is more than $6.210 billion where other retail stable
sold online in 2016 and nearly 74 percent, which is almost equals $13.7 billion, which
Amazon paid to its whole food sellers. The company has undergone significant change and
transformation due to increasing demands of customers as the company wants to serve every
demand of the customer6. Customers and other stakeholders have a very positive review
regarding the Amazon`s service delivery. Apart from this, third party people and other
stakeholders state that Amazon is able to maintain the CSR initiatives in order to grab the
interest of crucial stakeholders. Amazon`s CSR actions are undertaken in such a way that it
satisfies customers, employees and the communities.
5 Nussenbaum, A. (2019) Why Amazon Keeps Winning: A Third-Party Marketplace Analysis. Available on:
https://www.mytotalretail.com/article/amazon-winning-third-party-market-analysis/ [Accessed on: 27/02/19]
6 Stambor, Z. (2018) Inside Amazon's digital marketing strategy. Available on:
https://www.digitalcommerce360.com/2018/04/12/inside-amazons-digital-marketing-strategy/ [Accessed on:
27/02/19]

(Chaffey, D. 2018)
Selection of analytical approaches
Among all the analytical approaches such as SLEPT analysis, online marketplace analysis,
analysis of Channel Structures, and value Analysis. This analytical report undertakes two
crucial analytical approaches such as SLEPT analysis and online marketplace analysis.
SLEPT analysis of Amazon discusses factors such as political analysis, social analysis,
economic analysis, legal analysis, and technological analysis. These analytical factors
undertake macro environmental analysis that affect the growth and profit of the company. By
identifying these factors, the company will be able to get valuable advantages such as cost-
effectiveness, deeper understanding of business operations, methods of exploiting the
opportunities, and eye opening to the existing threats. The purpose of analysis is to provide
necessary information while undertaking and developing appropriate e-marketing strategies7.
SLEPT analysis
Social analysis- social and cultural analysis is important especially when determining the
behaviour of the consumers that are situated in different parts of the world. Income inequality
among the population in the developed and developing countries that has remained a risk for
7 Escobar-Rodríguez, T. and Bonsón-Fernández, R., 2017. Analysing online purchase intention in Spain: fashion
e-commerce. Information Systems and e-Business Management, 15(3), pp.599-622.

Amazon`s prosperity with UK leading. With increasing in the demand of reasonable smart
mobiles and laptops, the buying capacity of the customers have been improved through which
they get easy access to internet.
Legal analysis- legal compliance is another important aspect of business on global level. In
every aspect of business, it is most important for renowned brand such as Amazon so that it
can comply with laws. The company has a separate legal team to supervise the legal
challenges. Above the labour laws, several areas of legal compliance has to be met especially
where the legal compliance is necessary. Any unethical or illegal issues can be very costly
that will further lead to loss of image.
Economic analysis- These factors play an important role while developing the e-commerce
industry in the world. The frequency of successful events in the market is the result of stable
economic situation, which ultimately will intensify the efforts especially when grabbing
opportunities. It is most important to identify the level of inflation and taxation that continues
to shape the business operations by using the e-commerce platform. In addition to this,
Amazon should make few strategies to grab the opportunities in developing countries.
According to trading economies, the PDI has increased by 589.8 billion dollars from January
to December in 20168. The increasing PDI (personal disposable income) among the local
buyers such as Americans has encouraged the company`s economic prospective. Depending
on the economic conditions in relation to the external impact, Amazon should make strategies
in order to grab the marketplace in developing country.
Political analysis
Internet enabled with advancement of technology is regulated by every country in the globe,
which in lieu of that had a direct impact on pattern that a business agrees to operate. For
8 Parekh, D., Kapupara, P. and Shah, K., 2016. Digital pharmaceutical marketing: a review. Research Journal of
pharmacy and technology, 9(1), p.108.

example- countries such as UK and US have liberal policy for internet usage to deal in online
business. Stable political conditions occurring in external environment, the organisation seeks
to develop with the potential opportunities. Apart from this, China and other communist
places have come up with other enforcement of rules of operating through internet9. China is
popularised for regulating the internet, which strictly promotes and invites the local buyers.
Technological analysis- advancement in technologies enforce the company to use the e-
commerce platform and in lieu of that, the company decides how the company can perform in
a suitable way by minimising the cost of operations and maximising online business
activities. Recent research shows that e-commerce enterprises are getting more sophisticated
and it has the ability to accomplish with technological development. Amazon faces the
uncertainty of technological antiquation that can be further extended which will affect the
growth of the firm that probably improves the technological asset criteria. Apart from this, on
one or the other hand, Amazon has been struggling with the threat of cybercrime. It affects
and threatens the experiences from the customer uprightness. In order to improve the
customer`s data, the company is trying improve the technological infrastructure10.
Online Marketplace Analysis
While evaluating the current online marketplace, it can be noticed that Amazon is on the
appropriate track in consideration to expansion and growth over the last few years. In today’s
era, it can be easily analysed that upcoming tendencies in the e-commerce platform that is
most likely to look that overview of drones in form of products and service delivery. It is a
type of internal analysis based on organisation`s activities.
Strengths
Amazon is the largest marketplace for each kind of product ranging from A to Z.
9 Lo, W. and Lam, G., 2015. E-commerce business models. Manag Theor Bus Models, 3, pp.8-12.
10 Wang, W.T., Wang, Y.S. and Liu, E.R., 2016. The stickiness intention of group-buying websites: The
integration of the commitment–trust theory and e-commerce success model. Information & Management,
53(5), pp.625-642.

Amazon`s site faces huge traffic which will acquire new sellers and customers with higher
visibility
The company strongly focus on customer service and customer satisfaction.
The company maintain s a synergy between Amazon Web services (AWS), Amazon prime,
and Amazon marketplace.
The company has collaborated with many strategic partners in such a way that can offer
superior customer services.
Weaknesses
The company faces high fees from the sellers.
With the extensive price competition, wars and delivery margin, the company`s margin is
shrinking.
The company have no control over the product page layout.
The company has limited opportunity for branding.
Sometimes the company attracts negative publicity because of tax avoidance.
Opportunities
Affiliation programs of Amazon is one of the most participating brand in the industry11.
The company is affiliated all over internet that drives the targeted traffic to the items on
Amazon especially regarding the supply of built Salesforce.
The company emerge with the upcoming brands with their in-house brands in different
categories of brand.
11 Tarighi, R., Sajjadi, S.N., Hamidi, M. and Khabiri, M., 2017. Factors Affecting the Development of the
Electronic Marketing Capacity of Professional Sports Federations. Annals of Applied Sport Science, 5(2), pp.87-
96.

The company continues to open the physical stores that has increased the customer loyalty
and induced the repetition of business sales.
Several critical success factors drive the level of achievement within the industry that ensures
that each process is executed in the right way. The company undoubtedly depends on
technology and some of the critical success factors are skills, training, technology enabled,
and marketing related actions that ensure that companies use the strategies to handle the
demand in the market whenever it increases.
Threats
Currently, Amazon has been facing severe threat due to increasing competition especially in
terms of market share12.
The company has reduced the percentage rate of affiliation fee that has other online marketers
looking for alternative programs. The company faces threat of changing regulations.
By focusing on increasing the traffic on the websites by alluring the customers with offers
and discounts. Emerging use of social media should be addressed as a revolution as there is a
huge network of social groups who continue to develop since last few years13.
Conclusion
Form the above discussion, it can be concluded that the report has chosen digitally operated
with the less number of physical stores “Amazon.” The company is well known for its
operations and covers a huge market share that uses e-commerce platform to a great extent.
This analytical report undertakes internal and external analysis that states that the company is
explicitly performing well and using its digital resources very well. While evaluating the
business environment, it can be seen that company aims to deal with the challenges in a right
12 Parekh, D., Kapupara, P. and Shah, K., 2016. Digital pharmaceutical marketing: a review. Research Journal of
pharmacy and technology, 9(1), p.108.
13 Wang, C.L. and Hao, A.W., 2018. Advancing theoretical and strategic development of branding in industrial
marketing.

way by opting the right direction. The company purpose is to increase the footfall on the site
that can be checked once in a week. Maximum footfall on the site symbolises great victory of
Amazon that can closely examined but at the same time, the company should keep
conducting these types of assessments that can be periodic. The above analysis ensures that
the company will be surely get the proper information of the both external and internal
environment so that company can use the potential opportunities and use it’s strengthens to
overcome threats and win a competitive advantage.

Bibliography
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Escobar-Rodríguez, T. and Bonsón-Fernández, R., 2017. Analysing online purchase intention
in Spain: fashion e-commerce. Information Systems and e-Business Management, 15(3),
pp.599-622.
Wang, C.L. and Hao, A.W., 2018. Advancing theoretical and strategic development of
branding in industrial marketing.
Parekh, D., Kapupara, P. and Shah, K., 2016. Digital pharmaceutical marketing: a review.
Research Journal of pharmacy and technology, 9(1), p.108.
Tarighi, R., Sajjadi, S.N., Hamidi, M. and Khabiri, M., 2017. Factors Affecting the
Development of the Electronic Marketing Capacity of Professional Sports Federations.
Annals of Applied Sport Science, 5(2), pp.87-96.
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Lo, W. and Lam, G., 2015. E-commerce business models. Manag Theor Bus Models, 3, pp.8-
12.
Wang, W.T., Wang, Y.S. and Liu, E.R., 2016. The stickiness intention of group-buying
websites: The integration of the commitment–trust theory and e-commerce success model.
Information & Management, 53(5), pp.625-642.