Strategic Analysis: Amazon's Business Environment in the Greek Market

This report provides a comprehensive analysis of Amazon's potential expansion into the Greek market. It begins with an overview of Amazon's background and global presence, followed by a discussion of the business environment, including internal and external factors. The report then delves into a ...Read More

Amazon in Greece

Table of Contents
INTRODUCTION...........................................................................................................................1
Background of the company – Amazon...........................................................................................1
Business environment in context to Amazon...................................................................................1
Analytical Approach – PESTLE Analysis.......................................................................................4
Use and application of appropriate data and examples..........................................................7
CONCLUSION................................................................................................................................9
REFERENCES .............................................................................................................................10

INTRODUCTION
The report is in context to Amazon, an American electronic e-commerce company which
is achieving a huge success in the global market. It will discuss the background and other
information related to Amazon. In addition, it will also identify and determine the allocated
business enthronement in respect to Amazon. The report will also include an appropriate
analytical approach to analyse Amazon's organisational concept with suitable data and examples.
Background of the company – Amazon
Amazon is an American leading e-commerce electronic organisation which was
established in Seattle, Washington. It is among the most successful internet based supplier of
goods and products. Amazon was started as an online bookshop and later on, it developed itself
to supply electronics and soft-wares (Madsen and Walker, 2015). However, the firm has now
expanded its business all around the world with different websites in every country or nation.
The company first entered into US commerce trading in the year 1995 by Jeff Bezos; it achieved
a high growth in ten years by expanding its business in many countries and markets. Amazon
based its centres in Europe, US and Asia with the objective of managing the distribution of
product from the supplier to the customers. The company increased its quarterly sales revenue
every year, the financial report stated that Amazon's US market surpass the total international
income of the business. As the company was started by selling second hand books at small scale,
it has hugely diversified the range of its products. Amazon now sells clothing, jewellery,
computers, sporting goods, beauty products, furniture, toys and almost every product the
customers may like to buy. The company operates the sites in different ways; it focuses on
stocking and selling its own products from popular and trusted suppliers within the fulfilment
centres, allowing stores to utilise Amazon as their online portal for promoting the used and
existing products, inviting people to join and sell their products at the online auction. The main
strength of Amazon's internet service is the very innovative, versatile and targeted customer
interface.
Business environment in context to Amazon
Amazon is operating its business in the global market with a huge number of stores,
suppliers and customers. The company is operating internationally which give rise to an intense
competition. There is huge number of competitor developing a highly competitive market for
Amazon. The business environment plays an important role in the success or performance of a
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company or organisation, the various factors within the business environment highly affect the
overall functioning a company such as Amazon. There are mainly two types of environment that
affect the organisational functions and performance. These environments are as described below
-
 Internal Environment – In order to survive in a competitive market, every business is
depended on its adaptability and strength related to the environment. The internal
strengths of Amazon symbolise its internal environment. This internal environment of
Amazon includes physical, financial, technological and human resources. The financial
resources of the company refer to the financial strength of the organisation or business.
Moreover, the funds are distributed and used for the activities which can generate
maximum output at lowest cost, this is known as the optimum allocation and utilisation
of the financial resources. Physical resources stand for the physical assets of the company
for example machinery, plant, building etc. These assets are used in converting inputs
into outputs. These resources require a huge investment but are very important for the
accomplishing the business operations or activities. Human resources refer to the
employees or manpower with effective or specialized knowledge and skills to perform
various business operations or tasks (Schiffer and Weder, 2014). These human resources
are the main components of an organisation such as Amazon, they are responsible for the
managerial decision making, performing task, making strategies for the business and
many other important activities of the company. The internal environment includes
factors which are controllable and can be changed according to the needs and
requirements of the external business environment.
 External environment – External environment consist of factors outside businesses or
organizations that affects the business functions and performance. Amazon's external
environment includes political, sociology-culture, demographic and legal factors. The
organisations adapt to the external environment as these are the uncontrollably factors
which can converted into an advantage of the opportunities in the business environment.
Adapting the external environment helps the company to strive against various
environmental threats. Organizational strategies decisions are greatly affected by both
internal and external environment.
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Illustration 1: Business Environment and Decision making
(Source: Effect of business environment on Business decisions , 2015)
The external environment includes two major parts – Micro and Macro environment, these are as
discussed below -
Micro Environment – The micro environment includes various factors within the organization's
immediate environment. These factors have a great impact on the company's performance and its
ability in providing services to the customers. The various factors in the Micro environment are
as follows -
 Customers – Customers are the most important part of the micro- environment, Amazon
is existing to serve its customers and they are the reason for its success. Amazon has
various types of customers such as producers, retailers, Government and foreign buyers,
households and many more (Botha, Kourie and Snyman, 2014).
 Suppliers – The suppliers helps to input various resources to a company such as fuel,
power, raw material, money, power and other elements of production. The company must
be aware of different policies of the suppliers because the increase in inputs prices has a
high impact on the sales and profit of the business.
 Competitors – Competitors from the essential element of the micro-environment,
Amazon competes to acquire a big share of the market locally and globally. They focus
on analysing the competitor’s strategies and policies in order to adjust their plans for
gaining more customers.
Macro environment – The macro environment includes various economic and non-economic
elements which are providing threats and opportunities to the company. These elements are not
at all controllable and thus, Amazon modifies their business activities according to the macro
environment elements or factors. The various elements of macro-environment are as mentioned
below -
 Economic Environment – The economic environment includes economic forces that have
a high impact on the organizational operations. These forces consist agriculture,
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infrastructure, national income, industrial production, price, level, money supply, fiscal
and monetary policies etc (Bagautdinova and et.al., 2014).
 Non- economic environment – It includes demographic, sociology-culture, technological,
physical, natural, legal and political environment that affect and are affected by the
economic environment. The legal environment refers to the laws and legislative applied
to the businesses within a country or economy, the changes in these legal policies affect
the business operations and strategies of Amazon. Moreover, the technological
development also influence organisation to adapt new technologies in the business
activities of the company.
Analytical Approach – PESTLE Analysis
In order to enter into a new market such as Greece, Amazon needs to analyse and identify
various factors which can influence its business operation in the new economy or market. In
recent years, the company is impressively growing and achieving huge success in its business.
Amazon needs to expand the business more and more all over the world, the company is
focusing to develop the e-commerce business in Greece which is completely new market for the
organization. In addition to this, Amazon needs to achieve a large market share by entering into
Greece market and due to this, it is very important to analyse and identify each and every factor
that can influence the performance and function of the organisation. These factors can be
determined by applying the PESTLE Analysis approach.
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Illustration 2: PESTLE Analysis
(Source : MARKETING THEORIES – PESTEL ANALYSIS. 2016)
Source : ( PESTLE Analysis on Amazon)
Political – The obstacles in front of e-commerce organizations are not same as the traditional
businesses but it also has certain risk elements or factors that have a great impact on the e-
commerce industries. Amazon is one of the biggest company in the e-commerce sector and is
highly affected by various political factors. While entering into the Greece market, Amazon
needs to focus on the political environment of the country to make appropriate strategies and
plans which can help them to perform the business functions effectively and attain profit in their
business. The political environment of a new market can highly affect a business in both positive
and negative manner (Krotkova, Mullakhmetov and Akhmetshin, 2016). The political problems
or issues are not limited there many difficulties which affect the organisational activities. The
political disruption can interrupt the supply chain and leads to reduction of sales.
Economic – Every market or country has its own economic conditions or environment, Greece is
still a developing economy and not much effective as compared to UK and US economy. The
developed and good economic condition within a market gives result to higher sales and profit.
So, Amazon needs to analyse the economic condition of Greece market and develop appropriate
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strategies such pricing of the products in order to attract more customers in the new market. The
economic condition has developed intense or high competition in the market which can influence
the performance and profitability of Amazon while entering in to Greece market. The economic
condition of a market decides the profitability of an organization therefore, every company needs
to make their pricing, marketing and organizational activities accordingly (Zalengera and et.al.,
2014).
Social – It is another factor that influences the functionality, performance and profitability of an
organisation. The social and cultural trends are also very essential element behind the growth and
development of e-commerce sector. The demand of online shopping has heavily increased in the
recent years, the increased growth of technology and use of mobile technology has enhanced the
online sales of products and services. Greece people have different culture and trends which
needed to be considered while developing a business it the particular market to attract the
customers in the Greek marketplace. Amazon plans to offer the best products according to trends
and culture of various countries and market in order to cover a large market share internationally.
Therefore, social and cultural trends play an important role in the growth and development of the
business, according to the change in customer's trends and culture. Amazon designs as well as
offers products of wide range to the people and sustains its position in a highly competitive
market.
Technological factors – The technological element or factors have achieved a great importance
in the present world. Each and every type or business whether retail or online depends upon
information technology or other form of technologies in order to provide effective and better
services to their customers (Virglerová, Dobes and Vojtovic, 2016). Amazon needs to focus on
technological development of the Greece market and adopt various technologies for performing
the business partitions and increase the productivity or profitability in the new market. In order to
achieve competitive advantages in the Greece market Amazon needs to adapt most appropriate
technologies in their business operations or activities. Various countries have different
technological environment such as United Kingdom is highly developed in terms of technology
as compared to Greece, this difference is important to be understood before establishing and
developing business.
Environmental factors –Another important factor is the environment, Greece is a beautiful
country which is the result of several environmental protection policies and acts. Amazon needs
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to focus on performing environmental friendly business activities in order to avoid any harm to
the Greece environment or breaching of any environmental policies. In order to achieve
sustainability it is a major factor which needs to be considered by Amazon while entering into
the new market. Amazon has invested a lot into sustainability and CSR in order to reduce waste,
renewable energy and sustainability packaging. Amazon focuses on using renewable energy by
investing a lot in this area which also helped the company to get free from using non-renewable
energy within the long-term (Barney and Hesterly, 2016).
Legal factors – Amazon is a big name and brand in the e-commerce industry, it needs to sustain
this brand value by avoiding any legal controversy and for this they need to effectively identify
and analyse the legal policies imposed on the businesses in the Greece. The cited firm has a
different legal department that manages and resolves the legal challenges and issues of the
company. In order to develop business successfully within Greece market, Amazon needs to
follow and implicate the laws imposed by the government. This can help the company to operate
its business operations smoothly and effectively in the new market.
Use and application of appropriate data and examples
Amazon has faced many issues and barriers since a long time, but according to the
current surveys and reports it is generating a high revenue and growth in the global economy or
market. The company is expanding its roots into new markets and countries such as Greece in
order to increase its market share leading to high profitability (Bah and Fang, 2015). Amazon has
developed several plans to enter into more markets for developing its business worldwide. The
major strength of the company is the effective suppliers across the world that helps Amazon to
provide effective services to their customers easily and efficiently. Further, Amazon needs to
improve more and develop their business in Greece by properly establishing their business with
wide range of products that can attract new customers in the new market. In order to analyse and
determine the performance of Amazon in recent years, the financial reports can be illustrated.
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Source : (Growth Analysis of Amazon)
The illustrations state that the company is generating a high net profit with reduced expenses
which means the company focuses on low cost of production which is beneficial for earning net
profit. Amazon is successfully operating its business in the global market with the help of
effective services and strategies in their business.
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Illustration 3: Growth of Amazon

(Source : Financial report Amazon. 2015)
CONCLUSION
The above report concluded that Amazon is a leading e-commerce company in the world
operating in several countries for generating high revenue and income as well as attracting huge
number of customer in the global market. This report includes a brief information about the
company which helps to understand the nature and history of Amazon. The report also
determined business environment such as internal and external environment, micro and macro
environment that affect the business operations and performance. Furthermore, it also includes
appropriate application of PESTLE approach in order to identify the various factors which can
influence the business functionality while developing into Greece market.
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Illustration 4: Financial report – Amazon

REFERENCES
Books and Journals:
Madsen, T.L. and Walker, G., 2015. Modern competitive strategy. McGraw Hill.
Bagautdinova, N.G., Galieva, G.T., Pakhmutov, Y.O. and Pratchenko, O.V., 2014. Methods of
regulation of processes of innovation business development. Mediterranean Journal of
Social Sciences, 5(12), p.75.
Krotkova, E.V., Mullakhmetov, K.S. and Akhmetshin, E.M., 2016. State control over small
business development: approaches to the organization and problems (experience of the
Republic of Tatarstan, the Russian Federation). Academy of Strategic Management
Journal, 15, p.8.
Zalengera, C., Blanchard, R.E., Eames, P.C., Juma, A.M., Chitawo, M.L. and Gondwe, K.T.,
2014. Overview of the Malawi energy situation and A PESTLE analysis for sustainable
development of renewable energy. Renewable and Sustainable Energy Reviews, 38,
pp.335-347.
Botha, A., Kourie, D. and Snyman, R., 2014. Coping with continuous change in the business
environment: Knowledge management and knowledge management technology. Elsevier.
Bah, E.H. and Fang, L., 2015. Impact of the business environment on output and productivity in
Africa. Journal of Development Economics, 114, pp.159-171.
Virglerová, Z., Dobes, K. and Vojtovic, S., 2016. The perception of the state's influence on its
business environment in the SMEs from Czech Republic. Administratie si Management
Public, (26), p.78.
Barney, J.B. and Hesterly, W.S., 2016. Strategic management and competitive advantage. Upper
Saddle River, NJ: Pearson Prentice Hall.
Schiffer, M. and Weder, B., 2014. Firm size and the business environment: Worldwide survey
results (Vol. 43). World Bank Publications.
Online :
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MARKETING THEORIES – PESTEL ANALYSIS. 2016. [Online]. Available through:
<https://www.professionalacademy.com/blogs-and-advice/marketing-theories---pestel-
analysis>.
Financial report Amazon. 2015. [Online]. Available through:
<https://seekingalpha.com/article/319008-amazon-is-fairly-valued-with-only-modest-upside-
potential>.
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