Amazon: SWOT, PESTEL Analysis, Leadership, and Ethics Report

This report provides a comprehensive analysis of Amazon's business environment, examining its strengths, weaknesses, opportunities, and threats through a SWOT analysis. It also explores the external factors impacting the company using a PESTEL analysis, evaluating political, economic, social, technological, environmental, and legal influences. The report further contrasts various leadership techniques, such as authoritarian, democratic, and transformational styles, and suggests a suitable management method beneficial for Amazon. Additionally, it delves into the ethical responsibilities and obligations within Amazon's processes, concluding with a reflection on the learnings from the analysis. The assignment aims to provide a deep understanding of Amazon's business context and its strategic considerations.

Context of Business

Table of Contents
INTRODUCTION...........................................................................................................................3
1. SWOT analysis of Amazon.....................................................................................................3
PESTEL analysis of Amazon.......................................................................................................5
2. Influence of Pestle factors on the opportunities, weaknesses and threats of the establishment
......................................................................................................................................................6
3. Contrast between different leadership techniques:..................................................................7
4. Suggesting and justifying suitable management method which will be beneficial for the
establishment................................................................................................................................9
5. Responsibility, response and obligations in their ethics and social responsibilities in the
processes at Amazon....................................................................................................................9
6. Learnings and reflection report:.............................................................................................11
CONCLUSION..............................................................................................................................11
REFERENCES................................................................................................................................1

INTRODUCTION
Business environment refers to the exterior and interior components and how they reflect
upon the management, workforce, consumers and market relation of enterprise. It also provide
growth and success possibilities to the company if all the factors are monitored efficiently.
Amazon was founded in 1994, it is a multinational company which is completely based on
technology with its headquarters in Washington. They are considered as one of the most precious
company in terms of monetary and its cultural diversification around the globe. The company
mainly function in cloud computing, A.I. , online marketing etc. This following report will
perform SWOT and Pestle analysis and also examine the impact of PESTEL factors on the threat
and opportunities of the company. It will also differentiate between various leadership
techniques and determine the best management style which is suitable and should be adapted by
the organisation. Further the report will analyse the ethical responsibilities and obligations
followed by the establishment.
1. SWOT analysis of Amazon
Strength: Amazon have acquired a reputable and popular company image in the world market.
They are basically consumer focused as they provide all the products and facilities to the buyers
at affordable pricing, they are catering to a huge percentage of population on daily basis all
round the globe. Establishment is famous for their new and creative ideas which they have used
Illustration 1: SWOT analysis
Source: SWOT Analysis–What is it and
How to do it. 2017

to attract and engage their customer like they have used delivery process by drones in nearby
regions (Vlados, 2019). They deals in wide variety of products ranges from home appliances to
stationary and sanitary supplies, electronic items to kids toys and providing a wide variety of
ethnic and western clothings.
Weakness: They have provided free delivery and shipping services in various parts of the world,
which is causing loss in their overall profit amount. Many of their new launched and
experimental products failed drastically in the United States market and some of them didn't gain
much popularity which results in poor sales. Amazon is extensively judged and opposed for their
wrong doings of not compliance with the tax policies of different nations. Organisation doesn't
have much outlets which upset the consumers as they are unable to visit their stores and buy
things which were not available on their online outlet.
Opportunity: Establishment have a great and beneficial chance to grow by entering the market of
developing countries as their economy is growing rapidly and they are open to adapt and
welcome new foreign ventures. They can also gain a rapid change in their current position by
opening more physical stores in various countries, this will surely help them to achieve
competitive advantage (Kudriavtceva, 2019). By merging with other small and large scale Online
selling websites they can acquire a large share of customer base and expand their business.
Threat: It is a industry which works completely on online platform, which have some major risk
associated with them. As cybercrime is at its peak it become a big threat for the company to be
attacked by hackers and compromised their and their buyers information. Many new participants
are penetrating in the market which tends to provide cheap copy of premium products as
inexpensive price, that will be a big financial threat for the company.

PESTEL analysis of Amazon
Political: Amazon being a multinational company have to face many political issues in order to
operate its business functions. Industry is criticized by the US president for their wrong doings as
they have not paid fair taxes and trading tariffs which are compulsory to be paid by each and
every national and international firm. Due to the emergence of threat to online safety and
security of data government have implied various cyber crime rules and policies which every
organisation have to follow and install and develop their websites by following all the safety
measures which help secure the customers personal and account information and Amazon is
praised as they are considered as most secure online platform to make transactions and
purchases.
Economical: Fluctuating the exchange rate of the foreign currency put a direct impact on the
profitability and operating cost of the company as they deals in various national and international
nations. Increase in the wages and salary of the employees also cause monetary effect on the
organisation as the market and peoples needs and wants are changing they are demanding
increase in their pay scale to cope up with that emerging financial conditions, this will impact the
profit margin of the firm (Pan, Chen and Zhan, 2019).
Illustration 2: Pestle analysis
Source:How to do a PESTEL
analysis. 2016

Social: In order to function efficiently they take care of every little detail of social aspects, they
provide various discounts and offers on different cultural occasion of every religion. Society has
evolved and are aware about the utilisation of internet as it becomes a part of their daily
schedule, everyone ow a days use electronic gadgets such a mobile phones , tablets and laptops.
Through these devices they operate websites like Amazon and like to do purchases online as it is
more convenient to opt. In their busy schedule as they provide door step delivery as well.
Technological: This business is completely rely on the technology to fulfil their operations and
all the related services. Technological advancement and adaptation of technological tools is
become a essential key to success for every establishment. Retailers and other e-commerce
businesses are actively using software and applications to run their business and to reach out to
more customers. The company update their website and application on timely basis by
introducing new and advanced features which keep the buyers engaged and attracted and also
make purchase more convenient for them.
Environmental: Managing a balance with the environment ans stay responsible toward that is
equally important for a company. This industry is doing there fair share in the betterment of the
ecosystem as they have invested in various initiatives which involves waste management and
utilisation of renewable resources as well. One of the negative point of the enterprise is that
being an global firm they still haven't publicized or presented any sustainability document ever in
any of the public domain.
Legal: Every company is abided by several laws and norms which are compulsory to be
followed. Amazon have appointed their own dedicated specialised legal team to handle and
manage all the legality and juridical issues. Breaking these laws can be very problematic as it
will tarnish industries image and can also cause a huge financial loss. As they deal in cross
boarders they have to make adjustment with different laws and guidelines in order to operate.
2. Influence of Pestle factors on the opportunities, weaknesses and threats of the establishment
The external factors of every business have direct or indirect impact on the internal
aspects and work structure of every business. The impact of macro environment and its
influence on the interior component of Amazon is discussed below:
Political factor: The issues in this aspect is identified both as the weakness and strength for the
company. As this could be a very problematic issue for industry if they keep avoiding and not

paying tariffs and charges imposed by the government. This could lead to forced non-functioning
of the organisation and it considered as a unethical and illegal practice. On the other hand
accomplishment of becoming a safer platform for the shoppers to do transactions and purchase
without much fear of exploitation of data , as the company uses all the safety measures.
Economical factors: The economical changes turns out to be a weakness for Amazon as they
deals in various foreign countries and changes in the currency rates will cause loss and increase
operational cost and can also reflect on the pricing of their products as well.
Social: Company work with the compliance of social and traditional factors they address all the
people belongs from various culture, beliefs and tradition, without any favouritism this proves to
be a strength for the firm. They also keep track of their buyers demands and provide proper
customer service and support and offer various occasional sales and discounts.
Technology: They uses an updated application to facilitate their customers with easy access and
they also keep on modify and bring out new innovation to their websites to keep their buyers
engaged. This is also identified as a strength factor.
Environment: Amazon mostly operates from their online platform and outlets so they are less
responsible for generating harmful substances or carbon emissions. The firm took many initiative
towards managing waste and recycling products which is considered as a positive aspect of the
company (Çitilci and Akbalık, 2020).
Legal: Administrative legalities creates issues and failing situations because some of the legal
regulations would be beneficial for the state or nation but it will effect the working structure and
profitability of the company.
3. Contrast between different leadership techniques:
There are wide range of leading methods which are adapted by the managers and
administrators in different business situations and also in accordance with the type of workforce
they are dealing with (WALKER, 2017). In this respective topic the contradiction and
differentiation of various managing styles are analysed.
Task oriented leaderships
Characteristic Authoritarian Bureaucratic Transactional
Meaning In this most of the authority
is in the hands of specific
This style is based upon a
hierarchical manner of power
This particular technique refers
to motivate workforce instead of

person and very less
involvement of employees is
appreciated (Voight, Hickey
and Piper, 2017). They tends
to take decisions on their own
without asking for
subordinates or team
members advice.
, this is a systematically
arranged leading style in
which authority is designated
according to the position of a
person and they go by the
rules or fixed structure.
dictating them. Such leaders
tends to understand their
followers need and try to
encourage them into performing
actions.
Differentiation The decision making process
can be quick and it is easy to
manage employees in case of
they have inexperienced and
semi-skilled staff.
Performance is measured
according to determined
standards of the company.
All the actions are taken
within the set of instructions
and rules, so there will be
less chances to make
mistakes.
This is directed towards
emphasising on combine
contribution of teams. It uses
motivating method by providing
employee recognitions and
rewards.
People oriented leaderships:
Characteristics Transformational Democratic Laissez-faire
Meaning Leaders following this technique
tend to work along with their
members to understand the needs
issues task force is facing, they
focus on inspiring and encouraging
their workforce to bring out
innovative and creative ideas and
also consider their suggestions as
well.
The authority of making the final
verdict is in hands of the manager
or the superior but they come to
any conclusion on their individual
judgement they value their
employees and ask for their
thought and proposals also
(Castelli, 2016).
Workers have provided the
authority to take certain ground
level decisions on t heir own.
Administrators tend to put
complete trust in their
employees as they are allowed to
make changes which in favour
of them as well as of the
organisation.
Differentiation Task members are encouraged It become less complex for the By providing an open platform

through out the process and they
are supported emotionally and
morally by their managers. They
advise their associates to do what is
good not because they are told to
do so but because it is the right
thing to do.
superior to come to a final
conclusion as they have wide rage
of new and fresh ideas from which
they can choose from and people
will also feel important and
recognised and develop a sense of
trust and faith towards their head.
to the staff to flourish and utilise
their full capabilities, it will
become beneficial in the long
run for the employees as well as
for the organisation. As people
tend to be more creative when
they are set free.
Every managing style have their different impact and capabilities, but from the above discussed
techniques Amazon follows transformational leading method to manage and guide their
employees
4. Suggesting and justifying suitable management method which will be beneficial for the
establishment
Currently Amazon use transformational technique which is no doubt a good practice to
be followed because the superiors connect or make a bond with their associates on a professional
as well as emotional level. They try to understand where they are lacking and what are their
needs and requirement (Hoch and et. al., 2018). Leaders shares their personal experiences and
educate their followers to deal in critical situation and managing risk factors etc. After a detailed
evaluation of this technique it is suggested that democratic style will add more benefit to the
management of the company because it is in resemblance with the present method so it is less
complex and time efficient to apply and through this the decision making process will also take
shorter time then usual and will be more efficient as they have different creative options and
ideas which can be appropriate and profound in relation with the industrial growth.
5. Responsibility, response and obligations in their ethics and social responsibilities in the
processes at Amazon
Amazon supports local communities- In this year, Amazon came up with the facility called
amazon relief fund through which they support their delivery service partners and shareholders
to deal with the coronavirus issue. Company also started Amazon device donation program
which donate electronic devices and gifts to schools which are near amazon fulfilment centres.
Company also hosts certain events to help girls who are interested in coding. By providing
donations amazon help local and non-profit businesses.

Amazon empowers and educate workers- Company came up with different career choices
program in which fees are paid by the company for employees, nursing or air plane mechanic
courses are done. Many employees participated in this program (Tritt and Teschner, 2019).
Amazon gives permission to the employees who are in customer service to do work from home.
Health and safety of employees- Company make sure that they are providing hygienic
environment to the employees. In this COVID situation company provide work from home to its
employees for certain time period. They take care that proper safety measures are taken by them.
Amazon believes in gender equality and minorities- These two factors are considered by amazon
very much. They also have groups in the company who take care about this which is called
employee resource group. They give equal opportunities to female as male.
Energy consumption- They are investing in renewable energy like solar and wind energy and
doing business by using power generated through them. Company aims to use renewable energy
by the end of year. Amazon is the no. 1 company who are using solar energy to carry its business
operations.
Water consumption- Amazon's fulfilment centre have the facility to collect recycle water. To
achieve this they had made rainwater collection tanks and recharge wells. For cooling their data
centres company uses evaporative technology through which they save energy and water.
Recycling and waste reduction- Company has come up with packaging free program in which
customer can order within this program. Their product will ship directly in the original
packaging without in any additional packaging. Company use such materials for packaging
which can be recycled easily (Lacić, 2020).
Carbon emissions- By the end of next year company has targeted to deploy the technology so to
reach at zero carbon. For company to reach at zero carbon is very important. They want to
achieve zero carbon for all the shipments. They also focus on electric delivery vehicle and
ordered around thousands of electric delivery vehicle and invested in reforestation projects
across the globe.
Sustainable sourcing- Company participates in the sustainability programs and is the member of
better cotton initiative. Company has also evaluated different sustainable sources.
Environmental conservation- Amazon believes that environment conservation is very
important for the society. They make sure that they do not carry out any activity which will
damage environment. Pollution, waste creation, plastics are some factors which damage the

environment. Company started certain programs which educate people how to conserve
environment.
6. Learnings and reflection report:
The above report include the detailed study of the external and interior factors of amazon
and their inter-relatedness. The type of managing styles they are using and what changes need to
be maid in their operational system. Firstly I get to learn about the company, that in which
sectors they are dealing in, what are their strategies and they function. Through performing
SWOT and Pestle analysis I get to learn that how all the exterior component of the market
environment effect every single action of the company each and every small to big decisions are
influenced by the political and environmental changes, and to what extend technology and socio-
cultural factors effect the policies and profitability of Amazon. This research made me
understand that how the macro-components can cause changes in the micro structure i.e. the
capability, threats, possibility and failings. I acquire an elaborated knowledge of various type of
leading styles and their traits, advantages and differentiations. After completing this study now I
am able to easily identify which leadership method will be suitable in different business settings.
I was unaware about the involvement of the firm in various CSR and ethical activities , I
acquired knowledge about this through the expanded study of their practices. Lastly the overall
experience of conducting this research turns out to be advantageous and informative for me as
my knowledge in regards with this particular industry is broaden.
CONCLUSION
The above report conducted an expanded analysation of Swot and pestle and further the
influence external factors reflect upon the micro-environment of the organisation was also
discussed. Variety of managerial styles were evaluated on the basis of their differentiations. It
was also identified that what kind of leading method does Amazon follows and a new technique
was also suggested to the company on the basis of this study. Further in the research the ethical
practices and responsibilities followed by the industry was examined and measured. Lastly the
learnings and experience gained while conducting the research was shared.

REFERENCES
Books and journals
Castelli, P.A., 2016. Reflective leadership review: a framework for improving organisational
performance. Journal of Management Development.
Çitilci, T. and Akbalık, M., 2020. The Importance of PESTEL Analysis for Environmental
Scanning Process. In Handbook of Research on Decision-Making Techniques in
Financial Marketing (pp. 336-357). IGI Global.
Hoch, J.E and et. al., 2018. Do ethical, authentic, and servant leadership explain variance above
and beyond transformational leadership? A meta-analysis. Journal of Management. 44(2).
pp.501-529.
Kudriavtceva, A., 2019, March. SWOT-analysis of digital technologies for an industrial
enterprise. In IOP Conference Series: Materials Science and Engineering (Vol. 497. No.
1. p. 012012). IOP Publishing.
Lacić, M., 2020.The implementation of digital technologies in retail: The Amazon Go concept
(Doctoral dissertation, University of Zagreb. Faculty of Economics and Business.
Department of Informatics.).
Pan, W., Chen, L. and Zhan, W., 2019. PESTEL analysis of construction productivity
enhancement strategies: A case study of three economies. Journal of Management in
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Tritt, L.F. and Teschner, R.S., 2019. Amazon Delivers Diversity: Geographical & Social
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Vlados, C., 2019. On a correlative and evolutionary SWOT analysis. Journal of Strategy and
Management.
Voight, M., Hickey, A. and Piper, M., 2017. The leadership techniques and practices of elite
collegiate strength and conditioning.Sport J.
WALKER, H., 2017. Leadership Techniques, Organizational Skills, and Interpersonal
Relationships Affect Workplace Productivity.
Online
How to do a PESTEL analysis, 2016 [Online]. Available through:
<https://strategiccoffee.chriscfox.com/2012/10/how-to-do-pest-analysis.html>
SWOT Analysis–What is it and How to do it, 2017 [Online]. Available through:
<https://tallyfy.com/swot-analysis/>
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