Business and Business Environment: Dragon Den Presentation on Amazon

This presentation provides a comprehensive analysis of Amazon's business, focusing on its organizational structure, sales techniques, and the broader business environment. It begins by defining the sales pitch model and how Amazon utilizes it to attract consumers, detailing aspects like inventory management and discounts. The presentation then delves into Amazon's organizational structure, highlighting its cost-consciousness, customer obsession, and functional departments. It explores different types of organizations (public, private, and voluntary sectors), the scope and size of organizations, and how Amazon fits within these categories. The presentation also examines Amazon's functions, including marketing, customer service, and human resources, and their interrelationships. Furthermore, it conducts a PESTLE analysis to assess the political, economic, social, technological, legal, and environmental factors impacting Amazon's growth. The presentation also includes the legal structure of the organization.

BUSINESS AND BUSINESS
ENVIRONMENT

LO1: Organization’s Types, Size and Scope
 Dragon Den Group Presentation
Sale pitch Model
Sale pitch Model defines that attracts the consumers by providing facility to influence them
so that they buy the product. The company uses the selling techniques to sell the products or
services in the market.
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Amazon
Amazon is a technology company of America
The company operates in cloud computing, e-commerce sector.
The company operates worldwide
The main purpose of this company is to reach at large number of consumers
It is a private company due to which it has to follow all the laws regarding the private
companies has to follow such as laws related to income tax, license for delivering new
product or services (Amazon, 2018).
Selling techniques of Amazon
The selling techniques of Amazon play the role as the sales pitch:
The company provides all detail to consumers regarding their products with images. The
company also manages the inventory as per the requirement of consumers in order to provide
higher level of satisfaction. Discounts and refunds are the offer that is provided by the
company to its customer to attract them towards their services (McGrath, 2019).
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Organizational Structure of Amazon
Organization structure of the company is based on the Cost consciousness, Constant
reinvention, Improvement organizational culture and Customer Obsession (Dudovskiy,
2018).
Top management, middle and bottom management perform their responsibilities to increase
the sales. The company also earns the high revenue $232.887 billion as it attracts 2 millions
sellers towards their websites to sell their product (Research-methodology, 2018).
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Sales Pitch Model of Amazon
As per the model, the company has to attract or influence the consumers to buy their products
so that their turnover is increases. Amazon fulfills all requirement of customers to provide
higher level of satisfaction.
 Introduction
This report analyses the types of organisations operates in the business world. It has been
differentiated on the basis of ownership, investment, and its features. If the company has
started operating at both national and international level, it is known as global enterprise. This
report exemplifies every applicable model on Amazon such as it applies SWOT and PESTLE
analysis. Amazon is a vast internet based organisation which sell books, music, hardwares,
toys, electronic and other many goods either through middleman between wholesalers,
several customers, and other many retailers. It has it’s headquarter in Settle, Washington. It
offers several web services such as renting storage of data, computing resources, which is
also known as cloud computing. Amazon has stock both in privately and public held
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organisation with 338 million dollars investment coming up from public and private for 285
million dollars.
Types of organisations
The three major types of organisations in which a business operates are elaborated below-
Public, Private, and Voluntary organizations
1. Public Sectors Organisations
Public sector is the type of the organisation as controlled and handled by the
government. Example of public sector includes schools, NHS, and Police officers.
The public company can be either listed or unlisted where all the members have
limited liability with a minimum balance of 50000 Euro dollars and its shares are
traded freely. These organisations are formed under the special legislations.
Features
The public sector is owned and controlled by government. The accountability adopts
public sector focus on how actually government, officials and agencies are
accountable to citizens and owners.
2. Private sector organisations
Types of private sectors organisation
The private sector is a type of business that has not been managed and controlled by
government and derived profits from sales can benefit the employees in form of
incentives and extra benefit. The example of private organisations are Apple, Amazon
and FedEx. The company must accomplish few requirements such as it should have share
capital. It should have at least one shareholder. It is limited to maximum of 50 non-
employee shareholders.
The below elaboration will describe legal requirements and features-
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Sole traders
A sole trader is responsible for his entire business as he owns all the power to take decision.
A sole trader is responsible to pay legal compensation, which might rise during the business
action. As per the law, sole trader and its business is considered as one entity and all the
liabilities are born by him. If the business go bankrupt then the owner will have to
compensate from his assets and other financial reserves to pay off creditors.
 Partnerships
Partnership is a business with several person and each one of them is the owner of business.
These partners are active participants while running business or they are passive investors.
The relationship among the partners, percentage that they owns, type of ownership and their
duties is specified in partnership agreement. In terms of legislations and amount of
participation, partners are responsible for debts and lawsuits against them. Partnership
agreement documents comply formally and registering within the appropriate entities. Oral
agreements is not viable in this agreement (Gürel, and Tat, 2017).
Types of partnership
General partnership- All the partners have unlimited liabilities and are liable to every
obligation (Gürel, and Tat, 2017).
Limited partnership- These partners have limited liability as per their capital contribution
Joint Venture- A partnership where two companies align together to complete certain job.
Features of private companies
Profit from the private sector benefit the owners, investors and shareholders.
The sector owned and controlled by the private individuals
Purpose includes expansion, brand building, and market leadership
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 Companies
The company is a limited liability entity. Companies are regulated by the state statutes and it
is flexible in a manner where they are managed and organised. Shareholder liability has been
limited to their investments, which means most shareholders can lose their investment. The
company has separate entity, artificial legal person, incorporate association, common seal,
perpetual existence, and limited liability (Gürel, and Tat, 2017). The types of corporation are-
Statutory companies
Royal chartered organisations
Incorporated companies
Organisations limited by Shares
Franchising
A franchise is a source and type of license where a party acquires to permit them all to have
central access to business`s knowledge, trademarks and the processes to allow party to sell
product under a particular business name. In US, franchises have been regulated under the
state level. There is a federal regulations established during 1979 by the FTC (Federal Trade
commission). Franchise rule is a legal disclosure as given to certain prospective purchaser of
the franchise from franchisor, which will outline relevant information (Gürel, and Tat, 2017).
3. Voluntary sector organisations
Voluntary organisation is also known as community sector, which helps and benefits the
people to grow. For example- charity, and NGOs. The range of legal structures depend on
community groups and non-profit organisation. The legislation differs from structure to
structure.
The types of voluntary sector companies include-
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Distinguish the differences between:
NGOs- It is a non-governmental organisation that is legally created and it is not affiliated to
the any form of government (Gürel, and Tat, 2017).
 NPOs- Non-profit organisation, which uses surpluses and revenues while considering
the funds of other projects rather than giving them to the shareholders as their income.
2.0 Scope and Size of an Organisation.
Scope of different organisations is given below-
 Local company: it is a type of company, which is totally based of local area by
availing variety of goods to the local population.
 National company: the company that will produce and distribute several sources by
consuming products of the country.
 International Company: exchange of several products and services among
businesses in multiple countries.
 Multinational Company: A multinational organisation is a business, which operates
in several countries at same time. It is a company where business activities operate in
more than one nation.
Organisation structure and charts
 An organisation function can be described as set of activities undertaken within a
department of business areas of an enterprise. Some of the typical organisation
function includes – marketing, customer service, IT, HR and finance. The company
use these functions to gain competitive advantage in the respective sector. For
instance, in 2018, Amazon’s marketing spending amounted to over 13 billion U.S.
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dollars higher than the previous year (statista.com, 2018). This help the company to
gain more market segments and customers.
 All organisation functions share direct and indirect relationship with one another to
satisfy customers and meet their expectations. This interrelation creates a key to gain
competitive edge by developing synergy (Chow and Chan, 2008). For instance,
Amazon finance division develops a budget for each of the respective department
including marketing and sales, human resource and operations.
 The function of enterprise is depending on various functions like research and
development, marketing and HR, customer service and IT. It has been observed that
Amazon has created a competitive business environment with the help of low price
strategy. Amazon has built product distribution system benefit customers in product
accessibility and convenience. Other than this, Amazon has involved advance human
resource management division to look out for the enterprise employees so as to
manage the employees while attaining 100% efficiency and good performance
(Bohari, Hin, and Fuad, 2017).
 The function that needs to be changed or improved in Amazon should be the
operation as in this dynamic and competitive business environment, most of the big
firms are deploying automation in the business operations to attain competitive edge
in the industry. It was founded that Amazon’s latest warehouse machine demonstrates
the slow drip of automation and the technology Amazon is deploying is not new and
has been around at least five years (Vincent, 2019). It is important to change this
because of rising of new start-ups and multinational companies expanding their
footprints worldwide. This change will help Amazon to decrease costs at various
levels with increased efficiency (Bohari, Hin, and Fuad, 2017).
Advantage and Disadvantage of interrelations between organisation functions –
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In terms of advantage, this interrelationship brings various advantage and disadvantage with
grouping of employees and ensuring a dependable level of departmental competence. In case
of Amazon, it also increases operational speed and clarity by making it easier for
management to direct work to appropriate employees (statista.com. 2018). For example, the
marketing and IT department can communication HR division in advance about the necessary
number of HR resources as it will help them to plan and look for the employees in advance.
In terms of disadvantage, it also brings out lack of coordination and weakening of common
bonds (statista.com. 2018).
LO3: MACRO Environment
It is important to conduct PESTLE Analysis of Amazon to know the factors either supporting
or opposing the growth of the company (statista.com. 2018).
PESTEL Analysis
 Political Factors:
 For example- International policies work as a hindrance to Amazon`s growth. Expansion
in several countries is not very easy due to online policies. Several legal regulations
interfere with e-commerce buying. It is seen that internet advancement has been growing
and converting affordable for consumers (Bohari, Hin, and Fuad, 2017).
 Positive Impacts
Different political parties is good as it makes every possible way for people with common
ideas to support business.
It can promote and accept emergent new technologies.
 Negative Impacts
Their excessive control on FDI and their promotion can lead to limited economy.
Excessive political fluctuations can become a major risk for its losses.
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 Economic Factors:
 Amazon has been affected by the economic stability such as increase of likelihood and
power of purchasing. Currency fluctuations can lead to several issues during selling the
content on internet. Company based on US currency records all the transactions in US
dollars (Bohari, Hin, and Fuad, 2017).
 Positive Impacts
Economic indicators such as higher GDP, higher purchasing capacity and high purchasing
parity can lead to growing companies.
Improvement in economic conditions can lead to increase the sales and boost the revenues.
Negative Impacts
Inflated economy and lower GDP can become hindrance to the company.
Recession and crisis will not allow company to boost its sales.
Social Factors:
For instance- internet has been restricted due to its ethical factors and other religious values.
This factor has limited various items in several regions. With enabled innovative technology,
internet users have been increasing each year. Amazon is availing ways and platform to those
products to increase the market share (statista.com. 2018).
 Positive Impacts
Supportive lifestyle, income level and technology updated people can enhance
Amazon`s productivity.
Increasing use of social networks can cost few marketing cost to Amazon.
 Negative Impacts
Unreliable negative publicity can lead to lower the sales of Amazon.
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Non-accomplishment of CSR activities if not published on the social media, it can be loss of
opportunity sale. This has improved several services through mobile devices and shopping
devices. Amazon allow the users to get the competitive prices that will assist the customers to
shop online (statista.com. 2018).
Technological Factors:
For instance- Amazon is an online platform that can avail innovated tools surpassing the
competitors (statista.com. 2018).
 Positive Impacts
Every country has promoted the maximum usage of internet with low cost so anyone can use
it who wants it.
 Negative Impacts
The company has great breakthrough with the evolution of network and internet.
Legal Factors:
For instance- selling over the seas will need international laws for Amazon. Numerous items
will need separate laws that will depend on shipping inclusive of alcohols and other
chemicals (statista.com. 2018).
 Positive Impacts
FDI promotion and supportive government can allow the organisation to grow (statista.com.
2018).
 Negative Impacts
Excessive restriction and regulations cannot promote business at any cost (statista.com.
2018).
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Ecological Factors:
For instance- Amazon offers certain cloud storage that can eliminate the situations of the
storage devices with hardware devices. It is seen that online shopping has eliminated the
excessive needs of computer components especially as a mass production (Bohari, Hin, and
Fuad, 2017).
Positive Impacts
Online services save time and distance that do not create any pollution. The company has
been seeking to have greener shipping solution (Vincent, 2019).
Negative Impacts
On the other hand, shipping products will need additional packaging for the shipment purpose
requires additional and excessive plastic packaging that pollutes the seas and oceans.
SWOT Analysis
SWOT Factors Chosen Organization (Amazon)
Strengths Amazon is the largest and leading online retailer among the e-commerce
sites.
It focuses on three-pronged strategic features such as focus, cost
leadership and differentiation (Bohari, Hin, and Fuad, 2017).
Weaknesses Amazon has been facing cognizant issue of losing strategic advantage
when it move to accomplishment of core competencies.
It faces a danger and risk of losing profit margin where it would not be
able to optimise its costing due to its strategy (Vincent, 2019).
Opportunities The company has the chance to expand by considering overall concerns
over the online shopping especially the security and other privacy issues.
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Amazon can capitalise the rolling out of few products under the brands
rather than forwarding its site for third party products.
Threats The company faces competition from the local retailers that are agile as
compared to the strategy (Vincent, 2019).
The company has been losing its insight in the local market in the
pursuance of the global strategy (Chow, and Chan, 2008).
Relationship between SWOT and PESTLE
While considering the internal and external concerns related to threats and opportunities, it is
seen that increasing concerns over the online-shopped goods due to identification of theft and
other hacking that leaves to expose. Amazon tackles its cut outs (threats) and adopt
opportunities to create future strategies and plan whether to invest or divest (Chow, and
Chan, 2008).
Conclusion
While conducting critical analysis and decision making, both micro as well as macro analysis
are quite helpful to attain the decided business objectives. SWOT Analysis can guide
roadmap where the organisation can implement the going forward. The key focus of Amazon
is profitability not the volumes where it has to be competitive in future including the volumes
and market leadership.
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