Amazon's International Marketing: Drivers, Strategies, and Analysis

This report critically analyzes Amazon's international marketing strategies, focusing on its expansion into the UK market. It begins by evaluating the impact of globalization drivers, specifically technological and economic factors, on Amazon's growth. The report then identifies and analyzes a specific target market for AmazonFresh in the UK, followed by an assessment of the global environment for Amazon as a multinational company, including competitive rivalry, bargaining power, and threats of substitutes. Furthermore, the report evaluates market penetration as a global strategy and direct exporting as an international market entry strategy for Amazon's further development and expansion. The analysis provides insights into Amazon's approach to international marketing, highlighting the strategies employed to achieve growth and maintain a competitive advantage in the global market.

International Marketing

Table of Contents
INTRODUCTION...........................................................................................................................3
ASSESSMENT TASK....................................................................................................................3
1.) Critically analyse and evaluate the two recent drivers of globalization that impact or
influence the expansion of Amazon into the UK market............................................................3
2.) Identify and analyse one specific target market that AmazonFresh should target in the UK.
.....................................................................................................................................................4
3.) Critically analyse and evaluate the global environment for Amazon as a multinational
company......................................................................................................................................5
4.) Critically analyse and evaluate one global or international strategy and one International
market entry strategy for Amazon for further growth and development in the international
market..........................................................................................................................................7
International market entry strategy.............................................................................................8
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
International marketing is done at an international level for higher growth opportunities
for business and also leads to larger customer base and profit margins. International marketing
helps in gaining competitive advantage which leads to higher market share. This study will
critically evaluate two recent drivers of globalization that influence expansion of the business in
UK market. It also highlights, one specific target market that AmazonFresh should target in the
UK. Further it critically evaluates global environment for Amazon and also analyse and evaluate
one international market entry strategy for Amazon for further growth and development in the
international market.
ASSESSMENT TASK
1.) Critically analyse and evaluate the two recent drivers of globalization that impact or influence
the expansion of Amazon into the UK market.
Globalization is the distribution of goods and services across various national countries
across the globe to expand and grow the business effectively and efficiently which leads to
higher performance and productivity (Javalgi, & La Toya, (2018)). Global environment can be
extremely beneficial and can be highly risky for the company as it is affected by various
environmental factors like social, technological, political, economical and legal factors which
influence the operation of business.
The two recent drivers of globalization. Technological factors: Technology is changing at a faster pace which impact the
expansion of Amazon into the UK market. Amazon aim at using improved and
innovative technology to produce quality products which attract large number of
customers. Rapid growth of internet and use of advanced technology (such as various
gadgets, smartphones, laptop, tablet, etc.) which helps Amazon in expanding and growing
business in the UK market which leads to higher market share and customer base. Use of
e-commerce websites helps Amazon in reaching large customer base with strong
communication network and also leads to lower cost of transportation. Implementation of
effective technology helps Amazon in building global value chain and log distance trade
effectively and efficiently (Najam, Runnalls, & Halle, (2016)). Amazon has 11 online
marketplaces where it operates effectively worldwide which helps sellers grow their
business internationally which leads to higher growth opportunities for the company.

 Economic drivers: United Kingdom has a very strong economy and is growing very fast.
It is beneficial for Amazon to expand their business in the growing and developing
economy where consumers have higher purchasing capability and also facilities like
online shopping helps Amazon expand their business which will lead to higher
operational efficiency, performance and productivity (Gomes, Sousa, & Vendrell-
Herrero, (2017)). Amazon will have higher possibility and growing opportunities to enter
into the UK market which will help in expansion of business which will help attain
competitive advantage in the market effectively and efficiently.
2.) Identify and analyse one specific target market that AmazonFresh should target in the UK.
AmazonFresh is a subsidiary of Amazon who delivers grocery products to the end
customers by making goods available at their home (Schmid, Grosche & Mayrhofer, (2016)).
AmazonFresh target consumers of all age group which will lead to increase and growth of
business by effectively targeting the age groups who are attracted towards buying grocery items.
This will lead to increase in sales and revenue and leads to growth and expansion of business in
UK by delivering quality products to the consumers on time. AmazonFresh must focus on
reaching large number of customers of all demographics. The target market will be high end
street of London and various local markets and malls. AmazonFresh offers around 500,000 wide
variety of products to the consumers. AmazonFresh aims at delivering goods online to all age
groups in London to effectively increase and expand the business. AmazonFresh aims at
delivering fresh and quality products to the consumers of London on the same day or next day at
their door step (AmazonFresh targets London’s competitive online grocery market for next
launch, 2015). London is a highly competitive market and it is beneficial for AmazonFresh to
establish their business by reaching wide range of customers of all groups by making varied
range of products available online. It also aim at free shipping of goods on a particular amount of
purchase. AmazonFresh aim to sell products at a competitive price which helps AmazonFresh in
maintaining cut throat competition in the market effectively and efficiently which leads to higher
profit margins and increased sales. It also offers pickup in key locations of London and orders
can be dropped off at specific locations according to the convenience of consumers (Amazon
confirms international expansion of its Fresh grocery delivery service, 2016).

3.) Critically analyse and evaluate the global environment for Amazon as a multinational
company.
Global environment refers to the international interaction and connection with countries
globally for higher growth and expansion of the company from across the globe which leads to
higher operational efficiency, performance and productivity. Global environment comprises of
various trade laws and various other external environmental factors such as which influence the
operational efficiency of business.
Industry statistics of Amazon
Amazon has performed remarkably well in the last financial year 2018 with UK revenue
of around 23.3% which is estimated approximately around $14.5 Billion and internet retail sales
has gone up to 14.5%. Amazon sells 3 billion products in around 11 marketplaces across the
globe. Amazon sell more than 300 million customers through its e-commerce website. The net
sales of amazon in 2018 was approximately 232 billion U.S. Dollars and net income was around
10.07 billion U.S. Dollars. The annual growth of Amazon year over year is around 31%. The UK
has one of the third largest e-commerce market with sales of around 586.3 billion GBP in the
year 2017. Competitive rivalry (HIGH): There are large number of rivalry competitors present in
the market which leads to higher competition and lower profit margins and market share
(Shabani & et.al. (2015)). Large number of competitors such as Alibaba, eBay, Walmart,
Big Lots, Staples, Priceline are present in United Kingdom. The two major competitors of
Amazon are Alibaba and Walmart who offer large number of differentiated products to
the customers at competitive price. The major threat to Amazon is high drive of firms to
attain competitive advantage and large availability of substitute products. Bargaining power of buyers (MEDIUM TO HIGH): Consumers have access to
information regarding to the products and services that Amazon offer. Amazon focuses
on delivering high quality products and services to its customers. The switching cost of
customers is low and the bargaining power of customers is high (Amazon.com Inc. Five
Forces Analysis & Recommendations (Porter’s Model), 2019). Bargaining power of suppliers (LOW TO MEDIUM): The bargaining power of
suppliers is significantly low. Large number of suppliers are available for Amazon and

there are high number of competition among suppliers. Amazon also has moderate level
of forward integration which helps in higher operational efficiency. Threats of substitutes (HIGH): Large availability of substitute goods affect the global
environment of Amazon. The low switching cost of customers and low cost of substitute
products impose major threat on Amazon as customers can easily shift their buying
behaviour from one company to another. Threats of new entrants (LOW): Amazon deliver products online and the increase online
delivery of goods helps Amazon fights the threat of new entrants in the global
environment. Amazon benefits from high economies of scales that helps them in building
strong e-commerce business for higher market share and profitability (Souchon & et.al.
(2016)). Political factors: Amazon offers online services to the people all across the globe.
Amazon must effectively abide various laws, policies and regulations of different
countries in which it operates for higher operational efficiency, performance and
productivity. The major opportunity for Amazon is political stability which benefit the
company to diversify and expand business in various developed countries across the
globe. Economic factors: Increase in inflation rates, interest rates, economic downfall affect the
operational efficiency of business adversely. Increase in GDP and higher disposable
income of the populations increases sales of Amazon which leads to higher profit
margins (PEST Analysis Of E-Retail Leader Amazon, 2018). Purchasing power of people
in various countries like India, China, UAE, UK, US are increasing which helps Amazon
to grow and expand their business at a greater scale. Social and cultural factors: The buying behaviour of consumers are changing. There are
various culture, behaviour, ethics, trends and moral of customers which influence the
buying behaviour of customers. Different countries has different cultures which influence
the operations of Amazon. There are many places where internet facility is not available
or people who doesn't know how to order goods from online shopping which affects the
performance and productivity of business (Matsumoto & et.al. (2017)).

 Technological factors:Technology are becoming obsolete rapidly which impose pressure
on Amazon to continuously change the technology and adapt new and innovative
technology which leads to higher operational efficiency, performance and productivity.
The major threat to Amazon is increasing cybercrime. The major opportunity for
Amazon is increasing information technology efficiency which helps in maximizing
online retail productivity and achieving economies of scale which eventually helps
Amazon in maintaining competitive advantage (Gillespie, & Riddle, (2015)).
4.) Critically analyse and evaluate one global or international strategy and one International
market entry strategy for Amazon for further growth and development in the international
market.
One international strategy Market penetration: Amazon aims at selling goods and services through market
penetration which helps Amazon in expanding their products internationally which leads
to higher operational efficiency, performance and productivity of the business. This helps
company in maintaining competitive advantage and also leads to higher market share and
profit margins for the Amazon (Tulung, (2017)). Market penetration helps in obtaining
more customers from a particular market which leads to expansion and growth of the
business in a global environment. Market penetration helps in increased sales and
revenue by effectively penetrating the existing market which leads to more growth
opportunities and expansion of business. It helps Amazon in higher market share by
increasing the larger customer base and offering improved quality products effectively
and efficiently which helps in Amazon maintaining competitive position in the market
(Quer, (2015)). Amazon aims at offering products at competitive pricing by offering
attractive discount and coupons to customers which will lead to higher sales. Aggressive
marketing campaigns and effective distribution strategies helps in effective market
penetration which will lead to higher growth and expansion of Amazon.
International market entry strategy
 Direct exporting: Amazon aims at selling goods to the customers directly without
interference of any middleman or distributors (Hoppner& Griffith, (2015)). Direct
exporting is a good international strategy for Amazon to sell goods online to the large
number of customers in the international market. This helps amazon in increasing sales of

the company which leads to higher profit margins. Direct exporting helps build
connections with customers which helps Amazon in long term sustainability growth of
the company and also leads to higher growth opportunities and expansion of business
(Verbeke & et.al. (2018)). It is easier for the company to understand and evaluate the
target market for higher growth opportunities of the business. It also benefit Amazon to
have direct control on the exports which helps build reputation and goodwill of the
company in the international market. Direct exporting helps Amazon to have effective
and efficient knowledge of the global environment which is changing continuously.
Direct exporting helps Direct exporting helps Amazon in building vision of the market
regionally, nationally and internationally which leads to higher growth opportunities and
diversification of business effectively and efficiently (Watson IV & et.al. (2018)).
CONCLUSION
From the above study it has been summarized that, International marketing is done at an
international level for higher growth opportunities for business and also leads to larger customer
base and profit margins and helps to maintain competitive position in the market. This study also
highlight drivers of globalization i.e., technological and economic factors which influence the
expansion of Amazon into the UK market. It also highlights that, AmazonFresh must specifically
target customers of all age group in London for high growth opportunities. It also highlights,
models and theories such as porter's five force model and PEST analysis to evaluate global
environment for Amazon. Lastly, it also evaluates and analyse international strategy and entry
strategy for growth and expansion of Amazon.

REFERENCES
Books and journals
Gillespie, K., & Riddle, L. (2015). Global marketing. Routledge.
Gomes, E., Sousa, C., & Vendrell-Herrero, F. (2017). International marketing
agility. International Marketing Review.
Hoppner, J. J., & Griffith, D. A. (2015). Looking back to move forward: A review of the
evolution of research in international marketing channels. Journal of Retailing.91(4).
610-626.
Javalgi, R. G., & La Toya, M. R. (2018). International marketing ethics: A literature review and
research agenda. Journal of Business Ethics.148(4). 703-720.
Matsumoto, S & et.al. (2017). Authentication challenges in a global environment. ACM
Transactions on Privacy and Security (TOPS).20(1). 1.
Najam, A., Runnalls, D., & Halle, M. (2016). Environment and Globalization: Five Propositions
(2010). The Globalization and Environment Reader. 94.
Quer, D. (2015). International Corporate Strategy and Management. Unit 2: Foreign Market
Entry Modes. Estrategia y Dirección Internacional de la Empresa.
Schmid, S., Grosche, P., & Mayrhofer, U. (2016). Configuration and coordination of
international marketing activities. International Business Review.25(2). 535-547.
Shabani, A & et.al. (2015). Distinctive data envelopment analysis model for evaluating global
environment performance. Applied Mathematical Modelling. 39(15). 4385-4404.
Souchon, A. L & et.al. (2016). Spontaneity and international marketing
performance. International Marketing Review.33(5). 671-690.
Tulung, J. E. (2017). Resource Availability and Firm’s International Strategy as Key
Determinants Of Entry Mode Choice. Jurnal Aplikasi Manajemen. 15(1). 160-168.
Verbeke, A & et.al. (2018). Five Configurations of Opportunism in International Market
Entry. Journal of Management Studies.
Watson IV, G. F & et.al. (2018). International market entry strategies: Relational, digital, and
hybrid approaches. Journal of International Marketing.26(1). 30-60.
Online

Amazon confirms international expansion of its Fresh grocery delivery service. 2016.
[ONLINE]. Available through:<https://www.recode.net/2016/6/9/11894312/amazon-
fresh-grocery-delivery-uk-london>
Amazon.com Inc. Five Forces Analysis & Recommendations (Porter’s Model). 2019.
[ONLINE]. Available through:<http://panmore.com/amazon-com-inc-five-forces-
analysis-recommendations-porters-model>
AmazonFresh targets London’s competitive online grocery market for next launch. 2015.
[ONLINE]. Available through:<https://www.geekwire.com/2015/amazonfresh-targets-
londons-competitive-online-grocery-market-for-next-launch/>
PEST Analysis Of E-Retail Leader Amazon. 2018. [ONLINE]. Available
through:<https://pestleanalysis.com/pest-analysis-of-eretail-leader-amazon/>