Amazon's Global Business Economics & Finance: A Comparative Analysis

This report provides a comprehensive analysis of Amazon's global business economics and finance strategies, focusing on its operations in the United States and India. It examines the company's market structure in both countries, highlighting perfect competition in India and oligopoly in the US. The report includes a comparative analysis of macroeconomic indicators such as GDP growth rate, GDP per capita, inflation rate, unemployment rate, government balances, and balance of payments, assessing their impact on Amazon's economic activities. Furthermore, it evaluates the monetary and fiscal policies of both nations and their influence on the firm, along with an analysis of foreign trade policy instruments. The study concludes by summarizing the key findings and their implications for Amazon's global strategy. Desklib provides solved assignments and past papers for students.

Global Business
Economics and
Finance

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
Brief description of company and its products/market it operates in for both countries............3
An analysis of market structure in which the company operates for two nations.......................4
A comparative analysis of all the macroeconomics indicators for two countries and its overall
impact on economy activities of firm..........................................................................................4
An analysis of monetary and fiscal policy for the two nations and its impact on the firm's
economics activities....................................................................................................................9
An analysis of foreign trade policy instruments for two nation as its impact on firm's
economic activity......................................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
The global economy defined as the interconnected worldwide economic activities which
takes place in multiple countries. It is an economic theory that refers to the ability to product the
products and services at the lower opportunity cost than its trade partners. A global economy
comprises of various characteristic such as globalisation, international trade, international
finance. Global investment which make the better economy to operate in. Finance is the process
of raising funds or capital to meet out the various expenditure so that they can rightly operate
their business across the globe. Amazon is the chosen business organisation which is American
multinational company which is operating in e-commerce, digital streaming, cloud computing
and many more (Sassen, 2012). This respective report will cover the analysis of two countries in
which the Amazon is operating that is United States and India as given in the brief. It also
analyse the market structure in which the chosen company is operating and a comparative
analysis of certain macroeconomics indicators for two countries with its impact on economic
activities. Moreover, it will evaluate the monetary and fiscal policy and it impact on firm. Lastly
it will cover the analysis of foreign trade policy and its instruments.
MAIN BODY
Brief description of company and its products/market it operates in for both countries.
Amazon is the multinational company which is headquartered is in Seattle, Washington.
U.S. It is founded by Jeff Bezos in 1994 and operating in industries such as electronics,
entrainment, digital distribution, supermarkets and driving cars, e-commerce and so on. There
are approx 1608,000 employees who are working in the company across the world and
generating the revenue of US$469.822 billion. The company is having the official website
amazon.com through which the large group of customer ensures the better services to be
rendered to the target customers. It is second largest private employer in the United States and
having 200 million subscribers across the world they are offering better services to the customers
(Wang, WANG. and Wetzel-Vandai, 2009). In more than 700 Indian cities in India which
includes the Ladakh, Indore, Panipat, Udaipur and many more have choose to join the Amazon
via this route. In Kothur, Telangana Amazon is having the largest warehouse in India. They also
offering the better products and services to the customer and in such way they have establish the
good brand image in the India.

An analysis of market structure in which the company operates for two nations.
Market structure of Amazon in India is perfect competition in that is having large number
of buyer and seller who are operating in the market. Buyer and seller are having different choices
of buying. They are offering homogeneous products that are having similar designs and identical
to each other. Amazon is doing so as they are continuously focuses on the keep investing in the
technologies, improving its web services by meeting the capacity, research and development
activities in logistics and many more so that they can sustain in the market.
IN U.S., Amazon is operating its business in oligopoly market where the large group of
customer can have the real choices which results in measuring the market revenue and he
maturity. AWS also maintains the signifiant lead in public cloud market as the people of U.S.
Are having good income level by which they can get the products which is best for them.
A comparative analysis of all the macroeconomics indicators for two countries and its overall
impact on economy activities of firm.
Macroeconomics is the study of economics dealing with the performance, behaviour,
decision-making and the structure of the economy as a whole. They are working with huge
prospective so that they can ensures the accurate flow of money and goods in the market. There
are various indicators of macroeconomics which may cause increased volatility in the financial
markets and includes interest rate, consumer price index, monetary policy and so on. In context
to Amazon, following indicators of macroeconomics are explained as follows:
GDP growth rate
Gross domestic product refers to the total monetary or the market value of certain
finished goods and services which is being produced within the country's borders within the
particular time period. It shows the comprehensive scorecard of the country's economic health.
GDP is being computed on a nominal basis and it is the better method for analysing the long
term national economic performance. It measures the year-over-year change in an economy that
how fast the economy is growing (Sangwan, Prakash,. and Singh,, 2019).
.

In American economy expanded the annual rate of 7%, it remain the strongest expansion
since a record growth of 33.8%. It shows the rise in the fixed investment (2.6% vs 1.3%) which
is showing the rise in the market due to the change in the overall functionality of the economy.
Amazon is operating their business and contributing the the GDP of the US where as In India,
they are giving various business opportunities to the people and in such way they are
contributing to the GDP of India.
Illustration 1: United States GDP Growth Rate,2021

Illustration 2: India GDP Growth Rate,2021
§
In India, the Gross domestic products in expanded 12.70% in 2021. In long term, the
India GDP Growth Rate is projected to trend around 1% in 2022 as per the economic models.
GDP per capita at constant prices
It is the financial metric that breaks down the country's economic output per person an
this is being calculated by dividing the GDP of the country by its total population. Small, rich
countries and more developed industrial countries tends to have the more per capita GDP. It is
the gross domestic product dividing by the population and the GDP at purchaser's price is the
sum of gross value added by all resident within the economy and add any tax which is incurred
on products minus any subsidies which do not includes the value of the products. It is being
recorded that the Gross domestic product per capita in the United States recorded at 58510.24
US$ in 2020. it is also showing the GDP at per capita in United States is equal to the 463% of the
world's average.
In India, the gross domestic product per capita in India was last recorded at 1797.76 US$
in 2020 which is equal to the 14% of the overall GDP per capita of the world. Amazon is the
company which is having the better approach in the market as the per capita GDP is increasing

which makes people more rich and in such way Amazon can rightly increases its overall
profitability and operations (Fang,., 2014).
Illustration 4: India GDP per capita,2021
Inflation rate (CPI)
Inflation which is being measured by the consumer price index(CPI) which is refereed to
the change in the prices of the basket of products and services which are being purchased by the
particular group of household. Inflation is being measured in terms of the annual growth rate and
index. It measure the weighted average of price which is given as the changed price of each item
in the determination of basket of goods. Changes in the CPI is being used to assess prices
changes associated with the overall cost of living.
Unemployment rate (ILO measure)
It is the percentage of unemployed persons of the total number of person in the labour
force. It is the sum of the number of individual employed and the number of unemployed
persons. It is the total measure which takes in to the consideration for analysing how the people
are having the better consideration in the market. The unemployment rate is being calculated by
expressing the total number of unemployed individual as a percentage of the total number of
individual in the labour force. It is the sum employed an the number if unemployed.

Illustration 5: United States Unemployment Rate,2021
It is being stated that the US unemployment rate id falling down to 3.8% in February of
2022 and a new pandemic low and below the market expectations of 3.9 percentage. It is also
seen that the overall unemployment rate was 3.5% and number of unemployed persons the labor
force participation rate edged up to 62.3% (McCauley,, 2003.).
Illustration 6: India Unemployment Rate,2021
In India, the unemployment rate increases to 8% in December from 7% in
November,2021. It is due to the huge impact of COVID-19, all the services are closed and it
implied the people to leave their job ad stay in the home, operations are not taking place within

the economy which is reducing the flow of money in the market (Hambrick, and D'Aveni,,
1992).
General government balances (% of GDP)
It is the measures the fiscal performance of all arms of government which provides the
accurate assessment of fiscal performance of a more complete government sector. It is the
average which shows the fiscal deficits gradually fell and reaching to the average of -3.2% in
GDP in 2019. The fiscal balance is the difference between the government's revenue and the
expenditure which also shows that to what extent the expenditure in a given year is being
financed by the overall revenue collected in that year. General structural balance in percentage of
potential GDP. In 2020, India is having was at -8.2% where as the general government structural
balance of United States was at level of -11.7% in 2022 from the previous year was at -6.1%.
Balance of Payments (% of GDP)
The balance of payments is also known as the balance of payments as the balance of
international payments which is the statement of all the transactions made between the entities in
one country and the rest of the world over a period of time that includes the better consideration
to the choices in the market. It is the payments which ensures the balance of international
payments. It is the payments which ensures the above working so that they can having the better
approach in the market so that they can be the better consideration in the market.
An analysis of monetary and fiscal policy for the two nations and its impact on the firm's
economics activities.
Monetary policy is the set of available actions to the country's central bank by which they
can sustainable economic growth by managing the money supply in the economy. Monetary
policy controls the quantity of money that is being available with the people of the country and
how such monetary funds are being supplied to the customer so that they can be the effective in
the target market (Bailey, Heck, and Wilkens, 2005). This also leads to have the better
consideration in the market so that they can effectively ensures the better in the functioning of
the business. It is the main concern which is related to management of inflation so that overall
company can ensures the supply of money in the market. The monetary policy of U.S. which is
having the federal Reserve's which is having the communications so that they promote maximum
level of employment, stable prices and the moderate long term, interest rates. The economic
goals the congress is having instructed the Federal Reserve to purse (Humphrey, and Schmitz,,

2004). Where as the India, Monetary policy is the process by which the monetary authority of a
nation,basically the central bank which control over interest rate so that they can maintain he
overall price stability so that they achieve the high economic growth. In India, the central
monetary authority is the Reserve bank of India(RBI). In context to Amazon, these polices is
being framed by the government with the aim of ensuring the accurate flow of money within the
economy by which the allocation of the income can be done in the right place. When the
government increases the interest rate then it affects the overall investment of the company as
increases the rate of borrowing which tends to have the minimise the overall economic activities
of the business.
Fiscal policy highlights the government income and its spending with the level of taxes
that the government is charging to the people of the nation. It is the policy which assist the
government to manipulating all the allocations of taxed and the expenditure of the government.
Moreover, the main aim of this policy is to get the change in the aggregate demand within the
economy. The United States that the government has adopted the expansionary policy with the
aggressive actions related to the law which is being designed to boost the overall economy of the
business. This also leads to dropping into the deeper depression or the recession. In context to
India, Fiscal policy is the guiding force which help the government to decide how much money
they must spend to support the economic activity and how much revenue is being earned from
the system in the market. In context to Amazon, when the government manage the taxation rates
on import and export of commodities which tends to have the hight profitability in the economy
(.Higginsand Gulati,, 2003).
An analysis of foreign trade policy instruments for two nation as its impact on firm's economic
activity.
Foreign trade policy is the set of guidelines and the instruction which is being established
by the DGFT in consideration matters which is related to the export and imports of goods and
services in the market. The government of India, Ministry of Commerce and the industry
explains the export and import policy in every five years. India have aims to have the policy such
as the increases the country's share of global trade from the current 2.1% to 3.5% which is the
double of its $900 billion by 2020. Where as in U.S., includes the World Trade
Organisation(WTO) agreements which says that the multilateral bedrock of U.S., they also offer

the 14 reciprocal free trade agreements, 51 trade and related investment frameworks so that they
can ensures the better working in the U.S.
Exchange rate is the rate at which the country is exchanging its money and this varied to
country to country. When talking about U.S., the rate of exchange with the Euro is less ans the
Euro and on other hand the 1$ is having the more value to the Rupee which is the that is 76.57
and in such way various nations exchange the goods and services in the global market (Haensly,
Hodges. and Davenport., 2008).
CONCLUSION
From the above report, it is being concluded that global business economics and finance
is the study of the business which ensures the overall functionality so that they can ensure the
flow of money can be circulated in an right manner and also help the people to get their better
living standards. There are various indicators of macroeconomics such as gross domestic
products, per capital income, interest rate, balance of payments which are being analysed in the
above report and they all impacting the company in certain way by which they can retain in the
market for long period of time.

REFERENCES
Books and Journals
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financial knowledge. Review of International Political Economy, 21(6), pp.1170-1202.
Haensly, P.J., Hodges, P.E. and Davenport, S.A., 2008. Acceptance rates and journal quality: An
analysis of journals in economics and finance. Journal of Business & Finance
Librarianship, 14(1), pp.2-31.
Hambrick, D.C. and D'Aveni, R.A., 1992. Top team deterioration as part of the downward spiral
of large corporate bankruptcies. Management Science, 38(10), pp.1445-1466.
Higgins, M.C. and Gulati, R., 2003. Getting off to a good start: The effects of upper echelon
affiliations on underwriter prestige. Organization science, 14(3), pp.244-263.
Humphrey, J. and Schmitz, H., 2004. Chain governance and upgrading: taking stock. In Local
enterprises in the global economy. Edward Elgar Publishing.
McCauley, J.L., 2003. Thermodynamic analogies in economics and finance: instability of
markets. Physica A: Statistical Mechanics and its Applications, 329(1-2), pp.199-212.
Sangwan, V., Prakash, P. and Singh, S., 2019. Financial technology: a review of extant
literature. Studies in Economics and Finance.
Sassen, S., 2012. Global finance and its institutional spaces. In The Oxford handbook of the
sociology of finance.
Wang, P., WANG. and Wetzel-Vandai, 2009. The economics of foreign exchange and global
finance.