Digital Business Analysis: Amazon's Growth, PESTLE, and Operations

This report provides a comprehensive analysis of Amazon's digital business operations. It begins with an introduction to digital businesses, followed by a detailed description of Amazon's business model, including its mode of operation and market segmentation across geographic, demographic, behavioral, and psychographic categories. The report then delves into the key factors responsible for Amazon's remarkable growth, such as its focus on trust, fast and convenient services, customer-centric approach, user-friendly platform, attractive offers, innovative technologies, and powerful marketing strategies. A PESTLE analysis is conducted to examine the political, economic, social, technological, legal, and environmental factors influencing Amazon's operations and strategic planning. The report concludes by highlighting Amazon's position in the market and its potential for future expansion and innovation in the digital business landscape.

DIGITAL
BUSINESSES

Table of Contents
INTRODUCTION...........................................................................................................................3
Provide a brief description of the business, their mode of operation, the market segment etc. .3
Detailed explanation of the key factors which may have been responsible for the growth of
Amazon ......................................................................................................................................5
PESTLE Analysis of Amazon.....................................................................................................7
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Digital business is the creation of new business designs by blurring the digital and physical
worlds. It promises to usher in an unprecedented convergence of people, business and things that
disrupts existing business models even those born of the Internet and e-business eras.
Amazon.com, Inc., is an American multinational technology company based in Seattle,
Washington, that focuses on e-commerce, cloud computing, digital streaming, and artificial
intelligence. It is considered one of the Big Four technology companies along with Google,
Apple, and Facebook. This report covers questions such as description of the company and their
mode of operations, and their market segment, Pest analysis of Amazon and key factors which
may have been responsible for the growth of Amazon and How to make a business sustainable .
This report highlights the fact that how Amazon generated this much revenue and came in the
big four companies. There is a lot of scope for the company to improve and expand in the
technological aspects. The report highlights the fact that the company has won the trust of their
customers in various fields and bring innovation, new ideas and new trends in the market.
Provide a brief description of the business, their mode of operation, the market segment etc.
Amazon is based in Seattle, Washington. It is an American multinational technology company
which takes over the field of cloud computing, e-commerce, digital streaming and artificial
intelligence. After Google, Apple and Facebook it is considered as one of the biggest technology
company. They are also known as Big Four technology company. The company is known for
bringing innovation into technological aspects on a mass level. By revenue it is the largest
internet company and has become the second largest private company who has employed the
most no. of employees. It was founded in 1994 by Jeff Bezos in Bellevue, Washington. At the
initial stage company sold books on the online platform. Then with time they started to expand
their business and their list of products includes video games, software, electronics, furniture,
apparel, food, toys and jewelry. They have even surpassed Walmart to take the place of
becoming the best retailer in United States. Their reason of success is considered to be their 2
day delivery scheme for the users who have subscribed to their Amazon Prime. On top of that
they have gained 100 million subscribers of that. They have also started their streaming services

online such as Amazon Prime Video, Amazon Music. They have even introduced their own
products such as Alexa and Firestick. (Remane and et.al., 2017)
Market Segment of Amazon-
Amazon has segmented their market on 4 basis and they are-
Geographic- They have selected many regions and have made their base in more than 100
countries. They target both the people who lives in urban as well as rural.
Demographic- Main area of people for whom they have segmented their market is for people
who are of 18 years or above. They have products available on their platform for both men and
women. They offer a wide range and variety of products to both of them. They don't make
products according to their marital status in fact they have products for all types of people such
as single, married, couples, old people, people who are divorced, people with no children, newly
married couples, retired people, families who are dependent on each other. Company is not even
concerned with the occupation of the people. They can either be employees, students,
professionals, businessmen etc.
Behavioural- They have made this segment for the customers who are loyal and not loyal. The
company has broken them into 3 aspects such as the hard core loyals, Soft core loyals, and the
Switchers. Some people don't buy anything from elsewhere but Amazon they are Hard known
loyals, some people buys from others as well as Amazon they are soft core loyals but some of
them look for the best deals and who ever gives it they switch to those companies. Consumers
buys from them because they have wide variety of products. It is convenient to do shopping
online and their prices are competitive. Personality of the people they target is easy, determined
and ambitious. (Matt, Hess and Benlian, 2015. )
Psycho graphic- This area includes segmenting the market on the basis of social class and
lifestyle. They includes product for middle class, working class, social class and upper class.
They have segmented their products for those who maintains their lifestyle as explorer, reformer,
struggler, aspirer, resigned etc.
Mode of Operations-
Though Amazon is a e-commerce company and mainly handles their operations through online
platforms but in their home country they have 18 retail stores by the name Amazon Go as it is a
flagship store and it includes products such as food which is ready to eat, some groceries and
liquor available for purchase. These stores are considered to be as convenient stores as buying

from them is easy as buying online. They have no employees present in the stores all the work is
done through machines and technology. The moment someone picks a product it will be added
into their cart and if they want to purchase it then the money will be deducted from the card or
from the digital wallet. Still the main focus is to sell the products and services online. They have
partnered with many companies such as Ford, Microsoft so that they can improvise the things
they have innovated and extend it according to the needs of the market. To support their services
such as Prime they are opening up small warehouses in different places so that they can improve
the accessibility and improve the customer service so that they can satisfy more and more people.
They have even started delivering the goods from drones at some places. The first country where
they started this operation was Britain and now they have got approval for doing the same in US
also. (Ismagilova and et.al., 2017)
Detailed explanation of the key factors which may have been responsible for
the growth of Amazon
1. Trust factor : Trust can be vital factor in business to consumer (B2C) E-Commerce.
Amazon gives consumers faith to buy products or services even if an e-trader is
unknown. Amazon promotes more use of online shopping, make the e-transaction
process easier, It provides many options for payment to consumer, like : UPI
Transactions, Net banking, Debit card, Cash on delivery etc... Amazon leads to the
improvement of consumer commitment, Believe in customer satisfaction, introduces the
loyalty concept in the favour of customers, build the long-term relationship with
customers by providing best of best services.
2. Providing fast and convenient services : Quick and Fast delivery is the biggest issue in
the E-Commerce industry. Amazon have understanding this perfectly and use various
invented tools, for example ; Current location of ordered product, Algorithms, Couriers
contact number, Delivery man's info etc... to deliver products within as little as hour and
mostly, minimum to minimum time.
3. Listening consumer : Amazon providing reviews and Q&A facility to the customer, it is
helpful to understand our customer and know their needs. Amazon.com also providing a
feedback form to customer for know their problems related to company. It is very helpful

way to interact with customer. Company also providing 24x7 customer care facility to all
users.
4. Easy platform : Customers have different needs for each category, like; Fashion,
Grocery, Electronics, Stationary, Outdoor equipment etc... Amazon providing easy
interface to go on any category. Customer easily open their respective category to buy
something. It is totally easy process from login to buy something. Day by day amazon
improve their site or app structure for convenient experience of their consumer.
5. Proving attractive offers : Amazon always try to provide any product in the cheapest
rate to customer. It is always providing very attractive offers in a certain time period.
Company completely analysis current market and competitors and then try to provide
product in the minimum rate of the market to customer.
6. Innovative quality : Amazon is very specific in its innovative technologies and
practices. For example; Amazon's impressive and attractive voice command device Echo.
Echo is useful in Play songs, live games scores, and even check the weather and news
with a few spoken words. Only Amazon has this very innovative technology in the E-
Commerce industry. (Weill and Woerner, 2015.)
7. Powerful marketing : Amazon have very powerful marketing strategy for company
promotion. Currently company is steadily expanding its lead in E-Commerce industry.
Generally there are three marketing methods of Amazon :
 Amazon SEO : Optimizing keywords and the performance of the site to improve the
organic ranking in the Amazon search. It is helping Amazon site/app to trend on top
when anyone searching for the online shopping.
 Amazon Advertising : Various Amazon advertising formats to endorse brands or
individual products. Company put very large amount of the fund in advertisement.
 External Marketing Measures : It includes advertising through Google, Facebook,
Twitter, Instagram, YouTube etc....

PESTLE Analysis of Amazon
Political Factor
Due to its scope and scale of operations Amazon plays an indirect role in politics of USA,
Europe and some other countries. But because of Trade Protectionism in the USA from Trump
administration which increased tariffs to imports, may threaten operations of Amazon as possible
reduction in import. As being a Digital Business operating all over world requires considerable
amount of goods from overseas.
Another political factor that can affect digital business is the governments laws for e-
commerce business. Like Indian government stopped Amazon from selling goods of the
companies that have equity stakes. Though government supports companies like Amazon
because of their huge investment still these companies have to comply the rules and regulations
of the concerned countries. (Fleisch, Weinberger and Wortmann, 2015)
Economic Factor
Economic conditions of the areas affect the growth of Amazon and digital business.
Consumers buy goods from retailers and the country where per capita income of individuals is
high people are more likely to buy goods in more quantity and this pattern directly affects the
growth and profitability of the digital business.
Economic recession on another important factor that can affect profitability of Amazon.
For example Chinese market is important market for the company and its slow down is a threat
to the company. There are few more things that can affect business are taxation, inflation rates,
unemployment levels and changes in currency exchange rates directly affects the profit of digital
business. Developed countries provide more opportunity for growth and hence focus on
developed countries in the policy making and strategic planning also decides threats and revenue
of Amazon.
Social Factor
It includes changes in customers choice and preference that directly influence revenue
and growth of Amazon. Social factor is an key factor to be considered so that company can plan

and operate accordingly. Culture of the country and area also affect the profitability of digital
business. Outlook and perception of people of the country about the particular company and
business is also key determinant of Amazon's performance in the area. Amazon's technique of
saving through use of technology instead of human resource have created negative image of the
company that affects its business. And at the same time as Amazon is introducing more ways
than ever to receive your product without leaving the couch have come under fire. Inclusion of
grocery and many new things online have taken Amazon to new heights. (Darics, ed., 2015)
Technological Factors-
These factors are obsolete and this is the biggest threat that the company faces. This
creates a huge amount of pressure to focus continuously on improving this aspect. Their is also
an positive approach to this as this will bring optimization to the business. This will help
Amazon to gain competitive advantage. The company has a lot of scope to increase their
efficiency and resources in IT. Still company has to improve in this aspect as they are facing a lot
of threat from cybercrime and if they don't take the measures to solve this issue then they will
loose their integrity as well as the customers who are loyal to the company.
Environmental Factors-
Amazon has the opportunities and scope to think for the environment and work on the
factors such as waste management and consumption of energy. This could help the company to
enhance their corporate social responsibility and the impact the company makes on the
environment. If they become successful it will help the company to create a good brand image in
the market. People want a lifestyle with low carbon which gives the company a chance to
increase their image in the corporate sector. The company can take measures such as make
policies to limit the amount of energy consume on a daily basis. It also states the significance of
corporate social responsibility which will also help to show that the company is putting attention
towards the ecological factors and how to conserve the resources with minimizing the waste.
Legal Factors-
Consumer wants safety and security and this aspect focuses on reducing the counterfeit
sales of the company on their online portal. The company can grow their business by changing
the regulations of import and export. The company has the opportunity to increase their image by

following the regulations of protecting the environment. It can increase the level of competition
in the industry. If Amazon follow all the rules and regulations then the company can achieve the
long term success in the e commerce industry. (Chaffey, Hemphill and Edmundson-Bird, 2015.)
CONCLUSION
From the above studies it has been concluded that Amazon has become the market leader and the
largest technology company by their revenue. They are way ahead of their competitors. In fact
they beat Walmart in terms of sales and took their position to become the best retailer in the
United States. They have started various measures such as delivery by drones, the scheme of 2
day delivery, a platform for web series and movies on which people can stream online and it
comes with the subscription of Prime which gives the benefits of 2 day delivery that is why it
became successful. They have also started their own production to make their original series.
Other then that they have services such as Amazon prime music on which people can listen to
songs online which takes out the need of downloading the songs and filling the memory of your
phone. Company has to think according to every client and give them each the same value. It is a
measure to make the business sustainable and be a a part of the ecosystem and to retain their
customers Amazon is focusing on their reinventing their products continuously with updated
features so that they are not left out from the competition.

REFERENCES
Books and Journal
Chaffey, D., Hemphill, T. and Edmundson-Bird, D., 2015. Digital business and e-commerce
management. Pearson UK.
Darics, E. ed., 2015. Digital business discourse. Springer.
Fleisch, E., Weinberger, M. and Wortmann, F., 2015. Business models and the internet of things. In
Interoperability and Open-Source Solutions for the Internet of Things (pp. 6-10). Springer,
Cham.
Ismagilova, L.A., and et.al., 2017. Digital business model and smart economy sectoral development
trajectories substantiation. In Internet of Things, Smart Spaces, and Next Generation
Networks and Systems (pp. 13-28). Springer, Cham.
Matt, C., Hess, T. and Benlian, A., 2015. Digital transformation strategies. Business & Information
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Remane, G.,and et.al., 2017. Discovering digital business models in traditional industries. Journal
of Business Strategy. 38(2). pp.41-51.
Sia, S.K., Soh, C. and Weill, P., 2016. How DBS Bank Pursued a Digital Business Strategy. MIS
Quarterly Executive. 15(2).
Weill, P. and Woerner, S.L., 2015. Thriving in an increasingly digital ecosystem. MIT Sloan
Management Review. 56(4). p.27.