Business and the Business Environment: Analysis of Amazon

This report provides a comprehensive analysis of Amazon's business environment, focusing on the impact of political, economic, social, technological, environmental, and legal factors. It examines the positive and negative effects of these macro environmental elements on Amazon's operations. The report includes a SWOT analysis to identify the company's strengths and weaknesses, as well as opportunities and threats. Furthermore, it applies Porter's Five Forces framework to assess the competitive landscape. The analysis highlights how Amazon's strengths and weaknesses interrelate with external factors, such as technological advancements and market competition. Overall, the report offers insights into Amazon's strategic position and the challenges it faces within the broader business environment.

Business and the
Business Environment
LO3 & LO4

P4 Positive and negative impacts the macro environment has
upon business operations
 Political factor
 economical
 Social
 Technological
 Environmental
 Legal

Political factor
 Positive -Amazon relies on government support to implement,
distribute, and profit of its products.
 Negative-The company has said to be come under fire from federal
trade commission in U.S.

Economical
 Positive- Higher disposable incomes are allowing people to spend
more frivolously on luxurious items and entertainment, which are
plenty on Amazon.
 Negative-China being one of the largest markets for amazon, the
company is facing major threats to its business from the ongoing
recession in China.

Social
 Positive- The company's expansion into the grocery industry have
enabled the customers to receive groceries to their doorstep within
hours which has creates a big social change globally.
 Negative- It creates bad habits to the customers in term of online
shopping and sometime it provides bad quality products so it is harmful
for population.

Technological
 Positive- With advanced internet availability, consumers today have
access to faster and affordable internet.
 Negative- The company faces the threat of rapid technological
obsolescence which pressurizes it to continuously develop its
technological assets.

Environmental
 Positive- With its offer of cloud storage and cloud computing the
company have eliminated the need for hardware and storage devices
for public.
 Negative- Until 2016, the company has not published a sustainability
report discussing about the environmental impact that the organisation
is causing globally.

Legal
 Positive - It impact on the organisation in positive way such as many of
legal activities and laws.
 Negative- The company has said to be come under fire from federal
trade commission in U.S.

P5 Internal and external analysis of specific organisations in
order to identify strengths and weaknesses.
SWOT Analysis of Amazon
Strengths Weaknesses Opportunities Threats
E-Commerce
leadership
Significant cloud
player
Customer base and
loyalty
Worldwide presence
Large range of
products
Strong financials
Focus on innovation
Weak operating
margins
Product failures
Diversification
Forward integration
Acquiring new
businesses
Releasing new products
Heavy competition
Regulatory threats
Strong dollar

Porter 5 forces Analysis
 Threat of substitute products and services
 The Threat of the entry of new competitors
 Intensity of competition
 Bargaining Power of Amazon’s Customers/Buyers
 Bargaining Power of Amazon's suppliers

CONTINUATION
 Based on this Five Forces Analysis for Amazon it can be seen as the
company's major threats are its strong competitors.
 The rising market of e-commerce portals have grown different e-
commerce websites too, which are leading towards the downfall of
Amazon's place in the market.

P6 Strength and weakness interrelate with the external factors
 Some of strengths and weaknesses interrelate with macro factors.
 Technological factors which relates with price strategy that Amazon
can use their money and efforts to make a new technology and
invest on this thing.
 It can expand the business of amazon because technology is liked by
the people and it is the strength of the company.