Socio-Economic & Legal Environment Report for Amazon - CIQ Level 7

This report provides an executive summary and in-depth analysis of the socio-economic and legal environment affecting Amazon. It explores various factors like economic growth rates, interest rates, unemployment, international trade, and inflation, and their impact on Amazon's operations. The report also examines the influence of legal frameworks and political factors, including anti-trust laws, on the company's performance and future development. Furthermore, it highlights the drivers of economic change, both internal and external, such as competition and demographic forces, that can significantly impact Amazon's business model. The report concludes with recommendations for the company to navigate these complex environments successfully, ensuring sustainable growth and compliance.

Socio-Economic & Legal
Environment

Executive Summary
There are various socio-economic factors that can impact the business operations of a
company. Therefore, it is important for the management of the firm to develop strategies that are
beneficial for its overall growth. Apart from this, there can also be various political factors that
can influence the operations as well as position of the firm in the market. These can include
instability of the government and various rules as well as regulations.

Contents
Executive Summary...................................................................................................................................2
INTRODUCTION.....................................................................................................................................4
Literature Review......................................................................................................................................4
Impact of Legal Framework and Political Factors.................................................................................8
The influence of Political factors in the economic growth and future development of Amazon..............8
The long-term implications for the sector of Amazon...........................................................................10
A review of the formal and informal legal systems and anti-trust laws and their impact on Amazon....10
Conclusions and Recommendations.......................................................................................................10
REFERENCES........................................................................................................................................11

INTRODUCTION
The socio-economic environment of an organization comprises of various structures as
well as systems that can have an impact on various factors such as distribution of resources,
power as well as money. This impact and shapes the way in which communities as well as
individuals gain the resources which are needed to meet their basic needs(Azarova and et.al.,
2018). Amazon is one of the leading technology companies that is based in Washington, United
States. The company offers a range of products as well as services to the customers through its
website in order to satisfy their needs and wants. Amazon has operations across different
geographic locations in the world and has a large base of loyal customers. Various socio-
economic trends such as migration of the employer and workers, increased expectancy of life as
well as educational gaps can affect the business model of an organization. The respective
company, Amazon, has a platform business model along with several business units. Besides
this, the organization also maintains another business model that is subscription based. The
report explains the various drivers of economic change as well as socio-economic trends that can
affect the organization. There is also a description about the impact of legal frameworks and
political factors along with their influence on management.
Literature Review
The macro environment of a company includes various factors that are external to it and
can impact on its overall performance in the market. it can be said that the macro environment of
the company is linked to its business cycle closely. The various macro environment dimensions
are explained below with their impact on the business operations of amazon.
Economic Growth Rates – This is one of the major factors that can have an impact on
the business operations of Amazon in a significant manner. Gross National Product or GNP,
Gross Domestic Product or GDP are some economic growth rates that can be used by the
management of the company to measure overall growth. When the rate of sales changes due to
the economy, it is important for the businesses to respond accordingly. The owner of businesses
hires more employees when the economy of the nation is strong in order to gain competitive
advantage in the market.

Interest Rates – Another dimension of the macro environment are the interest rates that
can affect the overall success of a business(Bacher and et.al., 2018). Before starting operations in
a new market, it is important for the respective company to conduct a market research. This will
provide an idea about the interest rates there along with changes in the wants and preferences of
the customers. Therefore, Amazon keeps in mind this dimension of the macro environment in
order to conduct its business activities in an effective manner.
Unemployment – There are many countries wherein the rate of employment is low,
which means that this can impact the business in a significant manner. A low level of
employment means that the purchasing power of the customers will also be low. This will lead to
a decline in the profits as well as overall revenues of the company. Therefore, it can be said that
unemployment rates can affect the overall business operations of the organization.
International Trade -Companies additionally conduct macroeconomic studies to stay up
to date on worldwide exchange traits. This macroeconomic issue can affect your business if you
presently sell and ship products foreign places(Buheji, 2018). If you have not scaled your
enterprise to sell globally butneed to, this aspect still affects your corporation’s fulfillment.
Typically, businesses that amplify the world over experience double digit increase rates.
However, if the preference of loose exchange agreements decreases, companies’ probabilities of
developing their groups into international organizations decreases as nicely (5 Macroeconomic
Research Factors That Affect Business, 2020). Therefore, this macroeconomic element
influences both huge enterprises and smaller corporations trying to scale their manufacturers.
Rate of Inflation -The simplest manner to apprehend inflation is to peer it as rising
prices. If the financial system is within the country of growth. Where enterprise is thriving and
absolutely everyone is incomes suitable amount of cash which ends up within the boom in
shopping electricity of the consumer. This way that producer is capable of sell his commodity at
a excessive fee in the market. Whereas, in a nation of depression in the financial system, the
shopping and investing strength of the customer falls down. As the company can’t have an effect
on the general elements of enterprise surroundings, it has to alternate itself with the intention to
live to tell the tale the alternate. And manufacturer has to re-establish the expenses of his
commodity for human beings to have enough money it.

Economic Policies -Government are trying to find out to manipulate the commercial
enterprise environment to be able to meet a range of objectives. These consist of stability and
predictability, health and safety(Chen and et.al., 2017). Local, state and countrywide regulations
have an effect on the planning and operations of business deeply. Economic guidelines are
drafted to direct the monetary activities. They encompass import-export, employment, tax
structure, industry, public expenditure, public debt, overseas funding, and so forth.
Technological elements confer with the creation of latest technology and the way they
form products, product improvement, and access to new market possibilities. A best example of
a sturdy technological force nowadays is wi-fi communication.Nearly everybody inside the
global owns a phone, tablet, or laptop that can speedy and without difficulty be linked to the net.
It exerts a critical impact on individuals and societies and their potential to patronize groups
freely.Mobile era is likewise shaping the development of new technological gadgets and
replacing ones that have become previous. A corporation wishes to constantly use the maximum
updated era so that you can operate at its highest potential and be privy to how technological
packages can better serve clients.
A knowledge economy is an economy wherein the manufacturing of goods and services
is based frequently upon know-how-intensive activities. Success in a know-how economy calls
for a dedication of both employees and companies to continually analyze and to growth their
competencies and knowledge, as a way to foster innovation(De Faria and et.al., 2017).A
knowledge economy can have a significant impact on the business operations of a company. This
is because it is important for widening the overall scope of labor. This type of economy has three
important elements which include salary, innovation as well as incentive. Apart from this, there
are various drivers of economic change that can affect the chosen organization, Amazon in a
significant manner. therefore, it is important for the management of the company to make sure
that these drivers are address in an effective manner. There can be different types of changes that
can take place within the organization. Amazon is one of the leading companies. And since the
company operates across different countries, there can be situations wherein the company has to
adapt itself to the change.
Competition can act as one of the greatest drivers of change that can lead an organization
to implement change within its workplace. The drivers of economic change within the

organization can either be internal or external. External forces can be very challenging. These are
changes that we normally don’t select. These encompass using forces that shape trade like
generation, client options, guidelines, competitor moves, or provider and sourcing instability.
Disruptions are constantly hard us to innovate and adapt.Sometimes these outside modifications
can rise up right away like a tsunami(Gassiyand Potravny, 2017). Other outside modifications
are like a sluggish-moving lava glide. You won't love it, but you know it's far coming.
Regardless of the rate of exchange, it's going to take skilled leaders to leverage and capitalize on
those dynamic forces.
While internal forces can still be hard, you've got greater control over these changes. It is
crucial to remember the fact that any sort of exchange may be difficult, and those forces of
change will push us to get out of our comfort zone and method work in a different way. People
tend to crave the status quo and withstand things that disrupt familiar and depended on
behaviors, procedures and systems (The Driving Forces of Change [Internal & External], 2020).
It can experience unstable to alternate, so we tend to face up to things that appear unexpected to
us.When groups need to be restructured, a new executive is employed, a new product is brought
or a brand-new coverage is rolled out, it's far going to encounter some questions, cautiousness
and beat back.
Apart from this, there are various demographic forces that can also impact the business of
amazon to a great extent. The various factors included under this are packing of the products,
pricing as well as different services that are offered to the customers. The region also impacts the
buying options and behaviors of customers. Companies that intention to get higher income and
profits need to understand how the geographic regions in their clients come into play. For
instance, you ought to realize where your clients save for unique meals gadgets, whether or not
it's nearby markets or large supermarkets(Kvilinskyi, Mieshkovand Bondaryeva, 2017). If you
promote your products in regions in which your target clients normally go to for their food and
drinks fix, you'll most probable boom income. Otherwise, you'll lose such clients.Products and
offerings attraction to distinctive age groups. For instance, millennials or individuals who are 35
years old and beneath are normally the essential customers of devices which include the modern-
day fashions of phones and laptops. If the products and services offered by the respective

company Amazon are designed for millennials, ensure to offer them in communities or regions
where there are a variety of young humans.
There are certain issues that the company has been facing lately, for example there are
various concerns that the management of the company has about its growth in different markets.
Amazon's global segments, which posted lighter-than-predicted boom at 15% on a regular
foreign money basis as opposed to 21% the previous zone (Amazon's 5 Biggest Challenges in
2019, 2020). Amazon CFO Brian Olsavsky pinned a number of the susceptible growth on the
timing of India's Diwali vacation in addition to Amazon's buy of Souq.Com on an earnings call,
however buyers can be searching for how Amazon fares across the world these 12 months.
Therefore, these are some of the issues that the company is facing currently that have impacted
its overall business in a significant manner.
Impact of Legal Framework and Political Factors
A legal framework can be defined as the policies, rules as well as procedures that are set
by the government of a nation. All organizations operating within a particular country are
expected to adhere to these legal frameworks because they can have an impact on the
performance as well as overall profitability of the firm. Amazon operates across various
countries and therefore, it is important for it to comply to all the laws and regulations. Failing to
do so, the company has to face the negative consequences. Political factors can significantly
contribute to the economic growth of the respective company. The same is explained below
along with the long-term implications for the sector of Amazon.
The influence of Political factors in the economic growth and future development of Amazon
Political factors can be defined as the factors that are influenced by the decisions of the
government, infrastructure, taxes etc. Various political factors can also pose certain risks for the
business and as a result, the business has to face losses and other consequences as well. There
can be a change in the political factors due to changes in the policies or certain actions of the
government. Therefore, it is important for a business to stay up to date about any changes in the
political factors in order to avoid any kind of negative influence as well as make sure that the
business activities run smoothly. This is because political factors can either impact the business
operations in a positive or negative manner(Leijten, 2018). Since Amazon is a leading
technology company operating across different countries, it is important for it to comply to

various rules and legislations that are set by the government of a country in which it operates.
Political factors can either make the market more or less friendly for the company. It can be said
that the political factors can change the overall outcomes for an organization in terms of profits
as well as revenues.
Increasing or decreasing rate of taxes is a good example of a political issue. Government
guidelines may additionally boost the tax price for a few corporations and might decrease the
same for others due to particular reasons. This choice will immediately effect corporations. This
is why keeping a strategy which could address such situations could be very crucial. Lack of
political stability within a rustic can substantially affect the operations of a enterprise. This can
mainly be real for companies that are working on the worldwide scale. For instance, a opposed
takeover can take over a government. Eventually, one of these scenario will result in looting,
riots and fashionable disorder in the surroundings. Such conditions can disrupt enterprise
operations and activities that could have a major effect on its bottom line.Every enterprise has a
want to make bigger business operation to different international locations. However, political
historical past of a country can influence the preference for a enterprise to amplify its
operations(Morris, 2020). Tax rules which are especially managed by the government can induce
a selected business to enlarge operations in special regions while; other tax policies can avert the
procedure of enterprise expansion for some industries. Government projects, which have been
designed to support neighborhood groups, might paintings against worldwide agencies whilst the
query is in their competitiveness in a foreign area.
Employment legal guidelines are made to shield the rights of personnel and consist of
every thing of organization/worker dating. Employment regulation is an aspect this is very
complex and includes numerous pitfalls as nicely. When businesses’ are in touch with the ultra-
modern tendencies in this law, they can control to take their enterprise within the right route
however, individuals who get it incorrect desires to be absolutely organized for the high priced
consequences it'll generate. In current groups, personnel are nearly 98% of the organization for
the accomplishments or lack thereof and any adjustments within employment law will, of course,
have a top notch effect on the commercial enterprise operations.At one stop of the extremes of
political philosophies, or ideologies, is anarchism, which contends that people should manage
political activities and public authorities is both pointless and undesirable. At the alternative

intense is totalitarianism, which contends that each aspect of an individual’s existence must be
managed and dictated via a sturdy vital government. In reality, neither intense exists in its purest
shape. Instead, maximum countries have a mixture of each, the stability of which is mostly a
mirrored image of the united states of America’s records, culture, and faith. This aggregate is
known as pluralism, which asserts that each public and personal corporations are critical in a
nicely-functioning political machine. Although maximum international locations are pluralistic
politically, they will lean greater to one excessive than the opposite.
Therefore, it can be said that if the company complies to the different rules as well as
regulations in the countries of its operation, it will be able to attract a greater number of people.
This will further lead to an increase in its overall profitability so it can be said that the future of
Amazon can be successful if it develops and implements effective strategies(Song and et.al.,
2018). This will help, it in addressing the needs of the customers in an effective manner as well
as reaching out to a greater number of potential customers. This is because the future will be
digital and the customers will look out for products that are easily accessible and will satisfy
their needs as well as wants in an efficient manner.
The long-term implication for the sector of Amazon.
As Amazon is operating their business into technology and e-commerce sector that
provides online products catalogue to customers across the world. As they perform overseas, so
the firm like Amazon should abide through political factors as well as legal framework into
every area. But several of them could interfere with online purchase. Amazon relies upon the
support of government for implementing, distribution and gaining profitability. So, some
political and legal aspects such as Increasing or decreasing rate of taxes, Employment legal
guidelines, government supports for e-commerce, enhancing governmental efforts upon cyber-
security and many others (Dmitrieva and et. al.,., 2020). Among them some have long term
implications upon Amazon. As the government support political factors helps respective firm to
goes on expanding their business operations into appropriate marketplace but at similar time they
have to faces the maximizing competition for longer period. In addition to this, the aspects like
government efforts enhancement on cyber security assist them to maximize their resilience into
remote or external surrounding of technology as well as e-commerce sector for long time.

Beside this there are some legal aspects which have long term impact upon Amazon
which operates into both technology and e-commerce industry. Such as some legislation related
to change into import as well as exports also have long term positive implication upon Amazon
as they could able to expand their worldwide operations in rapid manners for exploiting the
enhancing capability of sellers to access overseas suppliers in order to sustain for longer
durations. . Additionally the both technology and e-commerce firm have opportunities to
strengthen their brand reputation by effective corporate social responsibilities norms which
highlights the enhancing environmental protection norms. So, it has long term implication as it
assist respective entity to explore their business competitiveness into remote surroundings.
Therefore, Amazon could assure longer term e-commerce growth with assistance of some legal
and political factors.
A review of the formal and informal legal systems and anti-trust laws and their impact on
Amazon
The United States have undertaken the federal government system, written constitutions
and common legal system. Though legal system is utilized as aspects of convenience which
encompasses various systems which are related with difficult manner. Moreover, there is a legal
system for federal governments as well as there are separate system for every 50 states for
Columbia district and also for every American territory and other overseas possessions. In
addition to this, for much part, these system lies under common tradition though there are
essential civil legislations that influences in few of jurisdictions which are located into territory
which was once within French , Spanish or Mexican norms. While informal legal system are
considered a disputes solution mechanisms which are not the part of states formal judiciary.
Essentially, informal legal system do not apply any kind of written legislations when solving
conflicts, but rather than applying common sense, undertakes community agreement as well as
comply tradition (Agaton, Collera and Guno, 2020). Along with this, In U.S. respective system
tends for addressing a board ranges of problems of vital concern to individuals, incorporating
local crime and security, land protection, livestock as well as property, solution of societal and
family conflicts as well as safety entitlements like access to public services.
Various countries have board legislation which safeguard customers as well as regulate
how firms perform its business. Moreover, the intent of these regulations is to render equal

playing areas for similar business which perform into particular sector while avoiding them from
obtaining much authority upon its competition. Antitrust laws are also undertaken as competition
legislation is statutes that are formed through U.S. government for protecting customers from
several predatory activities of business. Along with this, it also assures that fair competition
exists into economy of open marketplace (Volkov and Tishkov,2020). Also, these laws has
emphasize in addition to market, vigilantly guarding against could be monopolies as well as
disruption to productive competition flow. Respective laws are used to board range of
questionable practices of business, involving but not restricted to market allocation, fixing
pricing and others. In case these legislation did not exists, customer would not advantage from
various options or competition within market area. Additionally, clients would be forced for
paying highest prices as well as could has access to restricted goods or services supply.
Therefore, all these have impacts upon Amazon that performs into technology and e-
commerce industry in both positive and negative manner. as at present times the pace of
technology utilized as well as the model of business supports them which allows them to moves
as much as faster than the capability for keeping legislation to keep up. So, the antitrust laws
helps technology and e-commerce sector to opt numerous opportunities (Tassa, 2020). Along
with this, the antitrust laws does not have safeguard competing business from any aggressive
rivalry. Also, the competition is tough as well as many time business which are performing into
respective sector get fails. Such as Amazon have not get prevented other business to enter into
respective marketplace. Like Alibaba, Wish and others. In addition to various formal and
informal legal system assists them to perform their business in legal and ethical manner which
directly or indirectly have impact upon industry in positive manner.
Conclusions and Recommendations
As per the above report, this has been concluded that the socio-economic as well as legal
environment have huge affects upon technology industry. So, this is recommended to Amazon
that they have to undertake several factors related to economical, social and legal as this helps
them to operate their business effectively across the world. In addition to this, for their further
growth respective firm have to adopt knowledge economy as it incorporates three elements such
as salary, innovation as well as incentive. Moreover, it is important for the management of the
company to make sure that these as aspects are address in an effective manner so that staff get

motivate to perform efficiently towards the development of business. Along with this, as
Political factors influences the economical growth as well as future development of Amazon so it
has been also suggested that it is important for a business to stay up to date about any changes in
the political factors in order to avoid any kind of negative influence as well as make sure that the
business activities run smoothly. Furthermore, company have to complies different rules as well
as regulations in the countries of its operation as it would aids them to attract a greater number of
people. Beside it, this will further drive them towards profitability. So, that in future period they
can bale to attain success across worldwide. Additionally, it has been also recommended that
through addressing the customer requirements in an effective manner as well as reaching out to a
greater number of potential customers they can able to gain huge opportunities for business
growth. As the future will be digital and the customers will look out for products that are easily
accessible and will satisfy their needs as well as wants in an efficient manner. Apart from this,
there are various political and legal factors which have impact upon technology service industry
in both manner positively and negatively so respective firm have to undertaken whole that
legislation while performing their business into different countries. As this provide an ease over
respective nation government and customer as well as entity can able to expand their business in
effective and efficient way.

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