Business Strategy Report: Analysis of Amazon's Business Performance

This report provides a comprehensive analysis of Amazon's business strategy. It begins with an examination of Amazon's mission, vision, objectives, and goals, followed by an analysis of the macro-environment using PESTLE factors, considering political, economic, social, technological, environmental, and legal aspects. The report then delves into a micro-environment analysis, including internal analysis of financial and human resources, inbound and outbound logistics, technology, and a SWOT analysis. Furthermore, the report applies Porter's Five Forces model to evaluate the market sector, assessing threats from new entrants, bargaining power of consumers and suppliers, the threat of substitutes, and rivalry among existing firms. Finally, the report discusses Amazon's generic strategy and intensive strategies for growth.

Business strategy
STUDENT DETIALS
Student Name: Sandra Neves
Student ID :9180128
Unit/Module :HND

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Table of Contents
Introduction................................................................................................................................2
LO1............................................................................................................................................3
1.1 Analysis of the business mission, vison, objectives and goals of Amazon on terms of
strategic planning...................................................................................................................3
1.1.2 Mission..........................................................................................................................3
1.1.3 Vision............................................................................................................................3
1.1.4Objectives.......................................................................................................................4
1.2 Macro environment factors..........................................................................................5
LO2 Micro-environment analysis of Amazon...........................................................................8
2.1 Internal analysis...............................................................................................................8
2.2 Capabilities.......................................................................................................................8
SWOT analysis diagram......................................................................................................10
LO3 Utilization of the porter’s five forces to the market sector..............................................13
LO4..........................................................................................................................................16
Porter’s model......................................................................................................................16
Intensive strategies...............................................................................................................16

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Introduction
In this report, there will be discussion about the internal and external analysis of the Amazon.
This analysis will help the management to calculate the impact from the outside and internal
force that can affect the business performance. Apart from this, in this report plan for
strategic management will also be made for the Amazon. This strategic plan will be based on
the tangible and tactical business objectives.

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LO1
1.1 Analysis of the business mission, vison, objectives and goals of Amazon on terms of
strategic planning
Procedure is a movement that chiefs take to achieve at least one of the organization's wants.
Approach additionally can be depicted as "A favoured way set for the venture and its various
parts to increase an ideal state inside the fate. Approach results from the specific key making
arrangements way".
1.1.2 Mission
Company’s mission is "we endeavour to give our customers the base feasible charges, the
best to be had determination, and the most extreme solace." This organization task guarantees
engaging online business contributions to meet objective customers' wants. The business
endeavour centres on the factors of expense, decision, and comfort. on this respect, the
accompanying qualities are recognizable in Amazon's organization strategic:
 Least expenses
 Pleasant choice
 Most extreme solace
1.1.3 Vision
The company’s vision is "to be Earth's most extreme client driven association, where clients
can discover and find something they may need to search for on the web." This innovative
and farsighted declaration underscores the venture association's chief point of transforming
into the extraordinary web based business endeavour inside the world. Right now, following
qualities are recognizable in Amazon's corporate innovative and farsighted statement:

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 Worldwide reach
 Client driven methodology
 Greatest selection of items
Cloud Computing Services.
Website of the company.
1.1.4Objectives
Below are the objectives of the company. These objectives will help the management by
giving effective directions so that all the employees can proceed in accomplishing the task.
Giving customer satisfaction is the prime objective of the company. The management is
aware that customer are their prime resources and all of their work should be in accordance
for fulfilling the demands of their buyers.
Another objective of the company is to gain the market share. By gaining the market share,
Amazon will become the leader of the market with all the potential supplier and massive
targeting audience. In order to achieve higher marketing, share the company should
incorporate various promotional techniques such as digital marketing promotion, etc.
Amazon is also proceeding towards developing Amazon net services, this service will help
them in creating effective technology.
Apart from this, other objectives of the business include the following
1– Introducing advancements and growing new acquisitions
1 Lowson, R. 2002, Strategic Operations Management: The New Competitive Advantage.
New York: Routledge.
Porter, M 1998, Competitive Strategy: Techniques for Analysing Industries and
Competitors. Free Press.
Taulli T. (2011, Mar. 30), Amazon Shares: 3 Pros, 3 Cons, The stock looks strong for some
time to come

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- Creating the presence in the international market.
- Developing their effective relations with the partnering corporations in effective and
efficient way possible.
1.2 Macro environment factors
PESTLE is utilized in procedure to examine the external environment analysis. Through
below PESTLE analysis, Amazon.com will be able to calculate the positive or adverse forces
that is arisen from the market and government. This analysis will help the management in
judging the effective technology output with economic conditions, political conditions, social
conditions, environmental conditions, etc.
Political factors
In the UK, the largest political threat that the management may encounter is through the
impact of Brexit. Apart from this, the company can also gain support from the government
policies in the UK because the policies of the UK are the in favour of the FDI, in the initial
stage, the government offers various support to the new companies in the form of subsidies,
rebate in taxation, etc.
Economic factors
Regardless of Brexit, Amazon has proclaimed it expanding its United Kingdom. All things
considered; a few specialists accept post-Brexit can affect Amazon. Right off the bat, there is
a high probability that future contracting may get more enthusiastically (Taylor 2016). This is
regularly because of Amazon will in general acknowledge low wages, ordinarily migrator
staff to workers its satisfaction habitats — those employments start at £7.35 a partner hour —
TAGS: AMAZON, BUSINESS

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staff WHO could out of nowhere acknowledge it harder to figure inside the United Kingdom
(Cox 2017).
Apart from this, it is also observed that the management may experience biggest threat from
the Brexit in the form of taxations which may put adverse effect or it can slow down the
profitability of the company. For example: it is possible that Brexit can cause the extra taxes
on the EU Amazon customers, in this case it will increase the cost of the products. However,
the solution of this point is that the management should focus on lowering down the price of
the product so that their customers will not face losses. Moreover, the management can also
request from the government for the rebate in the taxes.
Social factors
The social feature of the PESTLE system manages the substance changes and the manner in
which they will either totally or contrarily {affect have partner impact on} an association
(Megaw, et al., 2016). With regards to Mintel (2016), there's a movement move inside the
methodology clients square measure exploitation cell phones. the expansion of phablets (cell
phones bigger than five inches) has implied that phablet mortgage holders were a great deal
of slanted to utilize their telephones to play out a ton of convoluted or long undertakings, as
on-line looking, that presents open doors for on-line retailers like Amazon.
Technological factors
Technology is the prime factor for running a business because latest technology helps the
business to lower down their cost of production. Moreover, it is observed that the United
Kingdom is moving towards the utilization of the Artificial Intelligence (AI) and Machine
Learning (ML). These technologies will help the business to deliver higher customer
experience and it will also help the business in lowering down their production cost with

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immediate efforts. Apart from this, the norms of the digitalization of the business is also the
effective way through which the management can gain benefits. As digitalization of the
business will help the company in creating centralized database and system portal so that
team can effectively track the performance and items orders by their customers. Portal system
will also help the management in creating a centralized database system so that the company
may outperform major of their technological threats.
Environmental factors
Natural issues became universal on account of the global climate change. The company have
to follow the environmental policies of the country in order to put reduce impact on the
natural resources of the country. Moreover, it is also observed that the management of the
company is always focus on utilizing those machines which produces less emission rate.
Apart from this, while operating in the country, it is possible that the management may need
to change their production methods in effective and efficient way possible.
Legal factors
Legal factors put positive and negative impact on the business survival. It is the good news
for the company that the company is not facing any legal trouble like Google and Starbucks,
both of these companies had a somewhat fraught relationship with HMRC. In 2014, for
instance, the corporate paid just £11.9m in United Kingdom charges, and in spite of the fact
that it in consent to pay organization charge on United Kingdom deals in could 2015, it had
been once open weight and a lot of media disgracing (Mazzini 2016).

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LO2 Micro-environment analysis of Amazon
2.1 Internal analysis
Understanding the application of the internal analysis will help the management to establish
effective coordination between the organization’s available resources and their implications
to generate cost proposition in effective and efficient way. Apart from this, internal analysis
will also help the management to identify early warning signals and threats that can hamper
the performance of the business.
2.2 Capabilities
(Source: GMID)
Financial resources
In 2017, Amazon expressed 42%, £9.52b, push in salary as opposed to worldwide pay of
going before year which was once £24.51b, an insignificant 28% upward shake under the
financial tension; they furthermore profited by the speculations into buyer contributions; on
the other hand, upward poke in their incomes everywhere throughout the world doesn't infer
exorbitant income edges. As rather than the consistent upward bump in deals, the benefits

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have been fluctuating, then again, their edges are extremely low as opposed to the turnover,
the reason for existing being the economies of scale and rivalry.
Human resources
Inbound logistics
Below are the functions and benefits of the inbound logistics
 Estimating the forecasting services to ensure that in the meantime how much return of
the goods can hamper their suppliers.
 Inbound logistics will also help the company to ensure for the collection of patron
feedback and to experience inventory shipping control.
 Inbound logistics will also help the management on fast on-line chare systems.
 Apart from this, inbound logistics also empower 24/7 support to the customers. For
example: when a request for the order arrives in the database of the company then the
logistics department immediate proceed that order so that customer gets the on-time
delivery.
 Utilize every minute of every day stockroom administrations to fulfil buyer needs. For
example: the company has already installed the instructions for their logistics
departments to proceed accordingly. Whenever logistics department get the order
form the customer, they immediate shipped their order with their respective courier
partners.
Outbound logistics
Below are the functions and benefits of the outbound logistics
 Worked in shut vicinity of a solid vehicle framework for example Bedfordshire
accomplishment focus situated alongside M1.

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 Capacity to group orders from around similar areas.
 Advertising and Sales
 Live purchaser communication to give appropriate items at limited consumptions and
item blend, leaving supporter sense more noteworthy esteemed.
 Strong conveyance rate figuring and conveyance of all the product for a charge of
one.
 Administration
 Free purchaser amicable returns approach inside 30 days on disappointment,
welcoming customers to endeavour extra new items
Technology
- The company utilizes contemporary science to leverage possibilities in their method
of digital sales such as videos, music, eBooks, etc.
- The management focus on the utilization of the hardware system to minimize fee of
preservations and compatibility procurement.
- They also incorporate the technology norms for using SBU-Book bank to analyse
their stocks of their digital copies and other resources to minimize delivery time
through the effective utilization of the technology.
- Amazon is moving towards automating the process so that all the work can be done
with the complete accuracy.
SWOT - diagram

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LO3 Utilization of the porter’s five forces to the market sector
Threats from the new entrants:
Amazon is the global brand with is valued at $315.15billion. Thus, at the global level threats
from the new entrants processed low output because the entry in the retail sector is restricted
(at the level of the Amazon) because of the huge capital investment.
Consumer’s bargaining power:
Bargaining power of the consumers processes low threat because consumers do not have the
option to bargain about the prices on the online portal. All the prices which are shown are the
final prices of the products. Although, Amazon always brings various discount offers for the
customers, in this case customers have the option to avail the discounts but still they discount
offers do not allow customers to bargain. Thus, it can be said that bargaining power of the
consumer also process low threat.
Bargaining power of supplier
This process high threat to the company. Due to the changing demand and supply, it is
observed that the supplier charges high prices from the company. Moreover, the company
also have to pay high prices because supplier have the options to sell goods to other retail

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changes. Apart from this, in many such cases it is also observed that when company have
availability of large suppliers then the company can bargain with the supplier.
Threats of substitute
These processes high threat in the market because other competitors also develop plans to
fascinate buyers with effective and immediate efforts. Other competitors also bring regular
discounts and attractive offers to catch the attention of the buyers. Thus, it can be said that the
threats of substitute process high threat. Apart from this, Amazon also create attractive offers
so that their potential audience not need to move to the other online portal for purchasing
their products.
Rivalry among existing firms
Search engine system plays an important role in creating an effective interaction between the
customer and sellers. Search engines also empower the customers to contact with the
different sellers. However, this processed high threat because it takes minimum or very much
low investment to open a online store. Many small scale competitors enter in the online
business market which sometimes creates a hampering situation for the company.
LO4
Porter’s model
Amazon incorporates cost leadership because its time-honoured approach for competitive
advantage. This cost leadership will help the company for the minimization of operations
costs. For example: the company utilize the advanced computing and networking applied
science for operational efficiency which results in minimizing the cost output in effective and
efficient way.

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Intensive strategies
Market development
Amazon make use of market development for their contemporary fundamental intensive
growth strategy. As entry in the norms of the market are defined as the predominant
objectives in this intensive strategy. The development of the new international market will
empower the company to accomplish their profitability targets. For example: In the United
States, the company first incorporate the furnished online retailing offering to shop keepers.
After development the market in the United States the company expanded their business to
other 10 countries including Canada, United Kingdom, India and China. Apart from this, it is
observed that the Amazon new occurring methods effectively build aggressive advantage that
approves the agency to affect this intensive method for the development of the market.

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Market penetration:
Market penetration is a secondary growth technique for the company. The primary objective
of this intensive strategy is to generate more revenue in the company where the organization
is presently operates. For example: when a buyer purchases more and more goods from the
online stores then it creates greater income opportunity for the company to enhanced their
employment growth. Apart from this, the company’s standard strategy creates the
fundamental gain to penetrate market based upon the strategy to develop low prices. This is
the strategy based upon the intensive growth approach to force an aggressive marketing
campaign growth.
Product development
Amazon uses product development as the supporting method for commercial enterprise
growth. The company focus on the development and penetration the new product growth to
target the large number of the customers towards themselves. As according to the
management, they want to target every consumer and it is the fact that every consumer has
the different needs to fulfil with their different demands. So, in order to fascinate large
number of the consumers the company always implies on the product cycle development
where they regularly add new products in their online portal. Apart from this, the company
also launches new products with attractive discounts and offers to target large number of the
customers.
Diversification
Diversification is the part of the company’s growth strategies. For example: the company
adopts the diversified approach to add or subtract the new products from their list. Apart from
this, a strategic objective is also associated with this intensive method that empower the

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growth of the e-commerce through an aggressive acquisition strategy. In this regard, the
business mainly forms the leadership time honoured strategy that allows the corporate to
develop in diversification.
Moreover, through the aspects of the technological development, it is guided to that company
that they should incorporate the norms of the AI and ML in their process for ensuring the
effectiveness operations in their system. The utilization of the AI and ML technology will
enable the system of the multi-tasking as AI will also enables the execution but installing the
functions of the AI and ML process will increase the cost of the company at the initial level.
The major benefit of the system is that it processes low error rate as compared to human
performing task.