Global Strategy and Sustainability Analysis for Amazon.com Company

This report provides a comprehensive analysis of Amazon's global strategy and sustainability initiatives. It begins with an introduction to global strategy and Amazon's position as a leading e-commerce retailer. The report then delves into an external environmental analysis using PESTEL, followed by an internal environmental analysis employing VRIO and Porter's value chain models. CSR and sustainability efforts are examined, including Amazon's approach to supporting local communities, worker empowerment, sustainable sourcing, and waste reduction. A SWOT analysis synthesizes the company's strengths, weaknesses, opportunities, and threats, leading to recommendations for global development and sustainability improvements. The report concludes with a summary of key findings and references.

GLOBAL STRATEGY AND SUSTAINABILITY

Table of Contents
GLOBAL STRATEGY AND SUSTAINABILITY........................................................................1
INTRODUCTION...........................................................................................................................2
EXTERNAL ENVIRONMENT ANALYSIS.................................................................................2
The external factors impacting the organisation are as follows:...........................................2
INTERNAL ENVIRONMENTAL ANALYSIS.............................................................................4
CSR AND SUSTAINABILITY ANALYSIS.................................................................................5
ANALYSIS......................................................................................................................................6
SWOT Analysis..........................................................................................................................6
RECOMMENDATIONS.................................................................................................................7
For Global Development...........................................................................................................7
For sustainability.......................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
1

INTRODUCTION
Global strategy is defined as an approach by the organisations and the companies in order to
explore beyond the boundaries they are confined to. Initially the companies or businesses decide
upon launching their business with an extent of providing and serving to a particular area and
their norms are stipulated to a single enclosure. The global strategy is to evolve around the
different areas that will uplift the company in all the aspects. The organisation that is taken in
this report is the Amazon.com which is one of the best retailing services on a global basis.
Amazon which is multinational technology company whose headquarters are in Washington, US.
The Amazon started as a book store providing numerous categories of books which has later
evolved as one of the best that will contain all the required items that are for households and
many purposes. The strategies that are adopted by the company in order to grow globally and its
sustainability measures are penned in this report taking examples from each phase.
EXTERNAL ENVIRONMENT ANALYSIS
The external factors impacting the organisation are as follows:
Retailing industry will have to undergo certainties which are regarded as internal and external
effects. Being one of the largest retailers with a significant technologies and the provided online
facilities, amazon is ranked as one of the top most retailers. the online market is never stable and
in a continuous manner challenging amazon in all the possible ways. The factors that affect the
company are noticed by the company are through the PESTEL analysis. Through the PESTEL
analysis the directors can analyse the different factors that contribute towards the external
factors. The impact of the external factors on the company was evaluated which can help in
minimising the negative impacts and maximizing the positive impacts.
Political factors:
Before getting deep into what the political factors does to the company, it is to be noted that the
governments of the USA and the European countries are stable and they are said be more
towards the retailing companies and the e-commerce. In view of the government intervention and
the support towards the e-commerce, the company amazon is said to benefit from the policies.
Since there is much government contribution towards the e-commerce, amazon can reliably
expand its service towards the brick-and-mortar operations which is the best form of expansion.
Economic factors:
2

The company operates as per the economy of the particular place. When the place that the
company is aiming to expand has the economical stability, then there will not be any barriers
with the online trading services. The countries that are in aim of the company amazon are said to
be economically stable and there will not be much obstruction in the way the company operates
in the macro environment.
Social factors:
The social factors that will affect the company are the ones that are related to the community,
gender, status and the usage. It is said that there exists a long gap between the rich and the poor
countries that which leads to the stagnation of the industrial alliances. The company amazon as
of now operates upon serving all the communities whether richer or poorer there are a set of
deals that the company carries with proper filters added to the items.
Technological factors:
The technology is growing at a rapid rate with increasing the communication of many retailers
and the consumers as well as to maintain subtle relations between the businesses. The amazon
utilizes the technologies in a more variant manner that will reach the remote corners of the world
about the retailing that they are dealing. There is a scope of rapid increase in the IT efficiencies
which will further add as a boon to the company in expanding its service over a long run.
Environmental factors:
Higher sustainability factors will improve the environmental conditions. It is said that there is a
much greater efficiency that is related with the trade when the company offers its part towards
glorifying its environment or the place that is operating. The Amazon company aims at
organising the beneficial policies that will not impact the environment. The resources of the
company are advertised in the manner that has ecological balancing which will further not add as
a bane.
Legal factors:
The legal factors are the rising product demand which is because of the challenges that are
occurring due to the rising retailing industries all over. They customers are aiming to purchase
more quality products which is further a challenge to the company. The changing export and
import regulations will further add as an opportunity to the company to reach greater heights.
Porters forces:
3

The porters five forces with regards to the company are as follows:
Competitive rivalry:
The competitive rivalry is regarded to be high with respect to the company. the number of
operators or the competitors are immense in the present scenario. The traditional brands started
giving online sales therefore it seemed to be a great competition.
Threat of new entrants:
The threat of new entrants is said to be low. To reach the mark of amazon, it will take some
amount of time and effort and therefore the new entrants threat is regarded to be a little low.
Bargaining power of suppliers:
The bargaining power of suppliers is considered to be low in case of Amazon. The company is
said to have stipulated suppliers and even then the company maintains the mark of selecting the
ones that re an apt. there are no suppliers that will attempt to bargain against the price with the
large number of supplier chain the company has.
Bargaining power of buyers:
The bargaining power is said to be high with regards to Amazon. There is stress upon the
customer satisfaction and that will develop the bargaining power. The company ensures that the
customer receives the product on time and then in case of return or replacement is done
effectively in the allotted time.
Threat of substitutes:
The threat of substitutes is relatively high in case of amazon. There are many substitutes like
Wal-mart and other branded online stores. Since Amazon does not sell something new therefore
it has a very high threat related to the substitutes.
INTERNAL ENVIRONMENTAL ANALYSIS
The internal environment analysis is known with the following two models:
VRIO Analysis:
The VRIO analysis of the company amazon aims at treasuring how the company will grow with
its opportunities and sustain in the market. This model is based on Jay B. Barney’s system that
will bring forth various internal concepts of the company that are used to sustain. The company’s
core competencies and the opportunities are related to this model. VRIO stands for value, rare,
imitable and organisation.
4

Value: the company maintains its value in many sectors that it is dealing with. The valued brick-
and-mortar presence is said to fetch the company with the ability to expand in the countries
where the government facilitates the e-commerce
Rare: the rare in this model refers to the qualities that are probably no where found. That with
amazon is its delivery. Amazon’s delivery is probably a rare factor that will not be seen in most
of the retailing services. The company will ensure the extensive delivery in all the forms of the
regular, domestic and international forms.
Imitable: the company stands inimitable with its unique ideologies and possibilities. The
company not just maintains inimitability in its policies but also stand as an inimitable service that
maintains high global brand equity.
Organisation: the organisation adopts the artificial intelligence into its technologies which makes
it easier for troubleshooting the times that are hard to be solved.
Porter’s value chain analysis of Amazon:
This model ensures that the company need not apply the same measures to all the activities and
functions. The company will first have to maintain the record of the activities and the functions
and the approach that is to be taken upon that.
Primary activities: the primary activities are producing and selling. The company must maintain
its uniqueness in order to deliver subtle primary activities.
Inbound logistics: the important of all is to maintain a good relation with the suppliers. Without a
proper analysis on the inbound logistics there is a chance of expecting challenges which are hard
to overcome.
Operations: the subtle means of operating and working on particulars is an important criteria.
The main operations aspects arise when there are materials that were arrived and then comes the
method of dividing and arranging them accordingly.
Outbound logistics: outbound logistics are basically associated with the delivery of the product
which includes packaging, shipping and delivery aspects. The outbound logistics are said to
increase the growth opportunities for the firm.
Marketing and sales: producing high quality products will not fetch the company a desired name
and fame. What that matters is the marketing levels where the company can be known to many
people. Amazon if invests more on the marketing promotions then the company will increase it
growth policy.
5

CSR AND SUSTAINABILITY ANALYSIS
Amazon was into public since 1997 and that time the company was criticised on many norms.
Kara Hartnett Hurst was appointed as the chief sustainability officer in the year 2014. The time
of taking up the position it was decided to focus more on improving the CSR measures of the
company which were lacking up then.
The CSR analysis:
Supporting local communities: the company is regarded as the e-commerce giant which raised
amazon relief fund in the year 2020 which was around USD25 million initial contribution. On
this occasion the company targeted upon the delivery service partners and the other stakeholders.
Educating and empowering workers: the amazon career program that was designed by the
company provides 95% of the tution fee in order to help them gain knowledge in the areas they
are willing to learn other than those that are associated with the company.
Sustainable sourcing: the Better Cotton Initiative which is the largest initiative that is taking up
added amazon to be a part. The company aimed at stopping the cotton usage until the forced
labour is stopped.
Waste reduction and recycling: the company has taken to consideration a program Packaging
free in which there is a boundary where the packages are shipped. In 2017 the company
celebrated the 10year anniversary for frustration free packaging.
The model for CSR used is The Pyramid of CSR which is known as Carroll’s four-part pyramid.
It helps in embracing the entire spectrum of the expectations of the society regarding the
responsibilities of the business and defining them. It helps in categorizing the responsibilities
hierarchically in the decreasing order of importance. Amazon considers the economic
responsibility first.
Sustainability activity:
Sustainability plays a major role in the success of the companies whether large or small because
it evaluates the impact which the company has on the environment. The company must strive
hard to minimize the emissions not only from the manufacturing of the branded products but also
total carbon impact of the company from all the operations. Various strategies were suggested
for the company which can help the company to focus on earning the profits as well as
6

implementing the sustainable practices. The Carrol’s pyramid method in regards to the company
amazon deals with the philanthropic, ethical, economical and legal functions of the company. the
company is said to maintain good economy with a great revenue. The ethics are maintained in
terms of offering the services top the customers. The company maintains all the legal aspects
which are employee supportive.
The model of 3-overlapping circles is used to show the sustainability adapted in Amazon as it
acknowledges the interaction of environmental, economic and social factors. The sizes of the
circles are re-sized by the company as per the dominancy. Amazon considers all the three factors
equally important so the sizes of the circles are equivalent.
ANALYSIS
SWOT Analysis
The swot analysis will help to understand the strengths, weaknesses, opportunities and threats
that are related with the company Amazon. The internal factors like Strengths, Weaknesses,
Opportunities and threats were analysed. This helps the company in becoming the market leader.
Strengths:
Strong brand: amazon’s brand is one of the strength and the asset of the potential growth. the
company offers products that are of good quality.
Leading online retailer: the amazon is one of the largest retailers with 47% of the sales and the
revenue is 233 billion dollars.
Weaknesses:
Low margins: though the retailer is one of the best in the world’s market, the profit margins are
low and therefore there are conditions that are affecting its growth.
Product failure: sometimes the product failures are such that the low quality products will not get
sale and the product will be of waste.
Opportunities:
Global expansion: the company is tend to expand globally with ties in different companies that
will bring about the growth.
Physical stores: the amazon operates both online and offline. The offline stores are said to
maintain the revenue at its perk.
Threats:
7

Competition: the competition is immense fin the retailing sector. the UK is known for its
immense retailers and therefore the company might face tough competition.
Government policies: sometimes due to the change in government the policies and regulations
will change to an extent this will impact the company.
RECOMMENDATIONS
For Global Development
The recommendations for Amazon will help in maximizing the company’s growth strategies by
making positive use of the strengths and opportunities along with minimizing the threats and
weaknesses thereby enhancing the global positioning in the markets internationally.
The company must make use of its low cost pricing strategy which helps in improving the
profitability by not only increasing the customer base but also the market share (Kareiva, 2017).
The company must invest in advanced technologies and still provide the services at affordable
prices which will not give loss to the company as compared to the competitors like Walmart
because the increased sales volume will lead to overall profitability. The company must use its
strong brand internationally as well as locally for expanding itself in the global markets. The
company must strive hard to make use of advanced technologies like AI which will help in
providing quality products and services which will therefore retain the existing customers and
attract the potential and new customers (Cheung and et.al., 2017). Social Media platforms must
be used for improving the brand image and promoting the world class products in the global
market. The model for CSR used is The Pyramid of CSR which is known as Carroll’s four-part
pyramid. It helps in embracing the entire spectrum of the expectations of the society regarding
the responsibilities of the business and defining them. It helps in categorizing the responsibilities
hierarchically in the decreasing order of importance. Amazon considers the economic
responsibility first.
8

Figure 1: The pyramid of CSR
The weakness of the company can be reduced by improving the delivery service partners for
leveraging the network. New delivery stations must be made by partnering with the other
companies for enhancing the profit margin. The system of free deliveries must be replaced by
shifting costs to the customers. Amazon also needs to increase its physical presence and for this
the brick and mortar business must be expanded. The company must also analyse the ongoing
trends in market and customers and provide quality products without defects. The products of the
company must be customer-centric which also helps in reducing the threat of the substitute
products. Amazon can also make use of the opportunities of expanding the markets of the
developing countries in which the online media is not much used. There is very less competition
in the new markets such as US and Europe (Celentano and et.al., 2017). This will help the
company to make use of the opportunities due to the innovation costs and technology integration.
The strategy of backward integration must be undertaken for transforming its brands into
different categories thereby leading to product differentiation. This is how Amazon can increase
its presence in the global markets leading to global development.
9

For sustainability
Sustainability plays a major role in the success of the companies whether large or small because
it evaluates the impact which the company has on the environment. The company must strive
hard to minimize the emissions not only from the manufacturing of the branded products but also
total carbon impact of the company from all the operations. The company must consider all the
environmental factors related to the sustainability including the company who deals in selling
their products at the online retail platform of Amazon (Patro and et.al., 2020). The company acts
as the intermediary between the buyers and sellers so the carbon emissions from the products
which are sold through the marketplace must be monitored and reduced.
Amazon gives more priority to the growth and sales but must give the equal preference to
minimizing the carbon. The business model of Amazon is not sustainable so the company must
take pledge to develop and implement the strategies which contributes towards making the
business model of Amazon sustainable. The company must also stop investing in the green
futures for the white people along with increased risk of COVID-19, asthma, death for black,
other coloured people and the indigenous. The supply chain of the company must also be
assessed including the sources which are not owned by the company, transportation, waste,
water, procurement and the energy for making the widget (Salazar, Ramos-Martín and Lomas,
2018). Therefore, Amazon must track the emissions which are produced by the supply chain
also. There can be many dilemmas faced by the company while implementing in CSR such as
lack of resources, lack of measurement systems, lack of strategic vision and many more. The
company can be benefitted by the CSR initiatives but they need to be kept in mind while
developing globally. There are also short term profits through the wall-street initiatives which
can be considered opposite to the long term sustainability. The CSR financial benefits are
difficult to measure. The company needs to have resources such as human capital, finances,
expertise and knowledge which are considered as the obstacles to CSR implementation. These
dilemmas are solved by making use of global development strategies as when the company
develops globally; it makes systematic systems for measuring the performance and success
which can also help in measuring the success of CSR activities. Also, when the company
develops internationally then the company aims for profitability which is why the company do
not face lack of resources so the CSR activities can be implemented successfully. Therefore,
Global Development can be used to solve the dilemmas faced in implementing CSR initiatives.
10

The model of 3-overlapping circles is used to show the sustainability adapted in Amazon as it
acknowledges the interaction of environmental, economic and social factors. The sizes of the
circles are re-sized by the company as per the dominancy. Amazon considers all the three factors
equally important so the sizes of the circles are equivalent.
Figure 2: Model of sustainability
Source: Willard, 2020
11