Digital Business Environment and Strategies: Amazon Report

This report provides a comprehensive analysis of Amazon's digital business operations. It begins with an introduction to digital business, contrasting it with traditional models, and then focuses on Amazon as a case study. The report explores Amazon's business name, digital business models (including SWOT analysis), digital business activities, and mode of operation. It delves into the digital business environment, covering macro, micro, and meso factors, along with market analysis using Porter's five forces. The analysis extends to market growth, segmentation strategies, and key growth factors such as USP. Finally, the report examines external factors that can impact business operations. This report aims to provide a detailed understanding of digital business strategies, using Amazon as a prime example, and is available on Desklib, a platform offering AI-driven study tools and resources for students.

Digital Business

Table of Contents
INTRODUCTION...........................................................................................................................1
Business Name ............................................................................................................................1
Traditional and Digital business..................................................................................................1
Similarities and different .............................................................................................................1
Digital business models ..............................................................................................................2
Digital business activities ...............................................................................................................3
Mode of operation........................................................................................................................3
Digital business environment: .....................................................................................................3
Market place ................................................................................................................................4
Market growth .............................................................................................................................5
Market segmentation: ..................................................................................................................5
Key growth factors for digital business ......................................................................................5
External factors that can impact on business operation...............................................................6
CONCLUSION................................................................................................................................7
REFERENCE...................................................................................................................................9

INTRODUCTION
Business Name
In present technology are changing rapidly and by adopting new techniques and methods
every business are growing continuously. Each and every business concern uses new technology
to increase the business activities and growth of business. The main purpose of this report is to
understand the uses of new technology in order to increase business through digital marketing.
Digital business means to create a new and innovative business design through digital and
physical worlds. Digital business help to increase business transaction by using new method. To
understand the concept of digital business Amazon has been taken. This is an American
international technology enterprise that focuses on increase in number of sale. In this company
approximately 6,13,300 employees are working at present and provides its services at different
location such as Brazil, Peru, Venezuela,Colombia, Suriname, France, Guyana and Bolivia. This
is a world's largest company that provides number of product and services to customer through
digital marketing by using various websites like as Amazon fresh, Amazon prime, Amazon web
services, Alexa, App store, Amazon drive, Echo, Kindle, Amazon music and video app. Digital
business makes new value in business model, create customer experience and internal abilities
that helps to support operation activities. In Amazon a business can be more digital by using new
app, mode of payment, provide information about new product and services through social media
and websites. It involves brand and traditional players at market place that transform their
business with new and digital practical application (Alizadeh and Sipe, 2016).
Traditional and Digital business
Traditional business: This means a business activities are running by offline and face to
face communication that helps to select product and services as customer wants. This is oldest
method that increases business activities through offline system.
Digital business: It means business through internet and media like print, radio,
websites, sharing link, television and respectively. In additional, digital business is a technique
that helps to run a business activities by using internet and social media.
Similarities and different
Traditional business Digital business
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Similarities: It create interest of business by
utilizing advertisement in order to sale.
This is also increase customer and business
interest by online advertisement.
It contains overhead cost and other extra
charges that create a risk.
It also include cost that occur by using internet.
Difference: In traditional business product and
services are provided face to face that gives lot
of choices and time consuming method.
This business provides online product and
services that helps to save time such as
Amazon give option to select product and
services as customer wants through online.
It includes small competition at market place
and easier to stay nearest customer and can get
customer expectation by using traditional
business method.
It includes large number of competition level
and easier to reach for every customer and
open for 24 hours. By using this customer can
check product and tracking information any
time.
Digital business models
This means a model that relates to digital or online business in order to growth of
business and organisation. It is important to represent business activities that is done by any
organisation. Such as Amazon use SWOT business model for increasing and growing business.
This business is done through digital platforms and mediums that helps to run a business at
different market place (Carenys and Moya, 2016).
Strength: Digital business is the way of increasing sales as well as business activities
that helps to give strong brand name. Amazon used this business model that helps to give brand
name, position, number of customer, product differentiation and new innovation with the helps to
new technology.
Weakness: In Amazon managers are focusing only digital business that can be easily
imitable by other organisation and can loss profit margin by using digital business model. Such
as it provides online products another company also can use digital business model and can
provide online products.
Opportunity: Digital business model give an opportunity to Amazon to expand its
business operation in developed markets and by expanding physical online store it can improve
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competition and can be sustain at market place. It has opportunity to get changes in technological
measure and organisation policies that helps to increase in sale.
Threat: It includes government regulation, cyber crime, aggressive competition and
imitation that can affect any business and organisation.
Digital business activities
Digital business activities: This means any activities or action that is done through internet or
online system is included in digital business activities. Such as Amazon provides product and
services through online and it also give a payment option through digital. Digital activities such
as purchase and sell, payment, amount transfer through online etc.
Digital technology does that company employ: While digital technology grabbed attention of
customer in present time that helps to give employment to employees by adopting new
innovation and techniques. Amazon use digital technology and provide employment to
employees who are well aware about new technology, and seek to upgrade new resources and
skills that will helps to run a business effectively (Carenys and Moya, 2016).
Mode of operation
Amazon is biggest international company that provides different kind of product and
services to customer at any time by using digital technology. It follows some steps to operate a
work such as-
 Customer visits the websites of Amazon and other websites.
 Select different products.
 Customer submits order through online.
 It follows impressive back end system to receive order.
 Match the order with customer's choices.
 Receive payment through online and at the time of delivery.
 It deliver fast product as offer cheap prices to clients or customers.
Digital business environment:
It is an online integration business communication environment where electronic and
digital devices are used to communicate and manage the business activities with in organisation.
Such as Amazon provide internet or online shopping to its customers and affect the business
transaction through online system (Choudary, Parker and Van Alystne, 2015).
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Macro: It means any digital business activities that relates to external environment and
affect the business organisation is known as macro environment. It involves various factors such
as political, cultural, economical, demographical, natural and technological that impact on
business environment. Amazon focuses on macro factors during business activities and reduce
the risks.
Micro: This involves internal factors such as competitors, intermediaries, suppliers,
company and public that affect a business. Amazon focuses on customer's choices and exception
and provide that kind of products and give satisfaction.
MESO: This is an environment situation setting between macro and micro opportunities .
It creates a legal structure of business or enterprise that helps to set business policies, standard,
rules and guidelines and operating procedure to run a business. Such as Amazon has a big
platform to operating its business activities by using internal and external factors that affect
business activities (Hansen and Sia, 2015).
Market place
Market place is a location or place where people collects for buying and selling goods
and services. In other words, it is a platform for sellers and buyers to interact with each other and
provide satisfaction to both by purchasing and selling. Where as digital market place is a type of
e-commerce site that helps to purchase and sale of products through online system.
Porter five forces: This model helps to identify how factors and substitutes impacts on
company's environment. It also helps to define the potential outcomes by providing better quality
product and services. Amazon focuses on low switching cost and less cost of substitutes that
supports strong intensity of threat substitution (Japparova and Rupeika-Apoga, 2017). It compete
against different industry, involving short online retail stores and big industry like flipcart,
walmart etc. The following intensities of external factor affecting Amazon business such as-
Competitive rivalry: Amazon has big brand that can competition with strong
competitors. It provide high aggressiveness of firms, availability of substitutes and low switching
cost that helps to attract customer and increase number of customer by adopting digital business
activities.
Bargaining power of buyers: This includes high quality of information, less switching
cost and high availability of substitutes of products. As customers have access to high quality
information about online retailer services that can provide product at low prices than Amazon. In
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this case customers have options to find alternative product at less price. So switching cost make
easy to attract customer for buying product and services as customer wants.
Bargaining power of suppliers: Suppliers control the business activities by selling
product and services at high prices. This includes less number of suppliers and moderate forward
integration. For instance changes in price of Amazon's product and less number of suppliers
bounds customer to purchase at high prices (Nylén and Holmström, 2015).
Threat of substitution: Amazon compete with substitutes at online market place because
of substitution of products are available from different online market place at low prices like
walmart, mantra, flipcart etc.
Threat of new entrants: New industry or firms reduce Amazon's market in online
retailer place that can reduce its profits and number of customer (Newman and et.al., 2017).
Market growth
Competition matrix: This is an analysis technique that helps to comparison with other industry
matrix or table chart. Manager of Amazon use this matrix to compete with other organisation by
defining strength and weakness. In additional, this is used to evaluate company's performance
and profile by checking other's performance and take corrective actions in order to growth of
market and business (Opreana and Vinerean, 2015).
Market segmentation:
This is a process of classifying the market in potential customers in different groups that
is depend on characteristics. Amazon use this process or method to divide the customer or
market on basis of lifestyle, age, usage, place and income level. It involves demographic,
geographic, behavioural and psycho graphic market segmentation and provide product and
services as customer wants. Amazon is using target marketing in order to selling product and
services according to target and take helps of advertisement through online system that helps to
increase in number of customer. Its focuses on customer choices and expectation and provide
products ( Otto,Bärenfänger and Steinbuß,2015).
Key growth factors for digital business
USP: This means unique selling proposition that helps to sale products by using different
technique. Moreover, it includes specific activity that makes different from other and helps to
comparison. Such as Amazon focuses on customer needs and wants and provide them unique
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product at reasonable prices that makes different and unique from others. Unique selling
proposition helps to growth of business such as Amazon provides unique and quality products
that attract to customer in order to buying online that helps to growth of digital business (Ovans,
2015).
What is allowing company to grow:
Amazon should formulate solid strategy to grow a business and its activities. It need to be
aware from new technology and method that will helps to growing business through digital
marketing (Paul and et.al., 2018). It can follow to grow a business such as-
 Find the needs of customer and prepare strategy.
 Tap in to multinational market.
 Need to spend on advertising and online marketing.
 Give offer Amazon prime to its customer and discount prices.
 Proper response to customer and never let a single negative slip.
 To hold account.
 To provide products by using different payment system.
External factors that can impact on business operation
USP: This is a key factor that impact on every business by providing unique products.
Moreover, USP is unique selling proposition that involves different kind of product than other
industry and helps to increase in number of sale. It plays an important role in any organisation
that helps to influence customer by creating a value of products. Amazon is a international
company that provides different kind of products through online at reasonable price that helps to
make different from others. It impact on business for instance, Amazon focuses on new
technology and provide training and development to employees that help to attract customer in
order to purchase unique product as result its sale will increase and profit margin will also
increase through business activities (Peng, 2017).
PESTLE:
Political: This is a major factor that can affect business activities such as if government
change rules and regulation of tax rate Amazon has to pay more taxes that will reduce its profit
margin and need to increase more customers (Singh and Hess, 2017).
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Economical: This impact on each and every business because economy differ from one
country to other that includes GDP rates. It impact Amazon business like if GDP rate will rise in
country it production will also increase. Hence, it affect Amazon business by increasing and
decreasing . If it decrease then company has to face less economy position (Svahn, Mathiassen
and Lindgren, 2017).
Social: Amazon focuses on customer needs and want and sale product according to
customer. If any changes arises in customer taste it will affect Amazon business that it will need
to provide products according to customer design and choices that helps to survive at
international market.
Technological: Technology is big contribution in daily operation of every organisation
that affect business. This factor may affect Amazon business such as if any new changes are
occurred at market place it need to adopt new technology and methods that will helps to run a
business at market place. It can include digital marketing, video and social media marketing that
helps to increase business.
Legal: This includes legal act that affect any business such as employees of Amazon are
facing problems relates to minimum wages hence low productivity and less sale that impact its
business. To solving this issue it need to follow minimum wages act that helps to motivate
employees and will focus on work (Todor, 2016).
Environmental: Digital business includes environmental factor that impact Amazon
business such as it give benefits of paperless transaction by using digital transaction that helps to
save environment from green effect.
CONCLUSION
From above report it has been concluded that digital business is a boon for every business
concern that helps to increase the number of sale and participate in operation activity. Moreover,
digital marking and business is the way of introducing new technology and methods that gives a
idea of controlling business activities and maintain competition among other enterprise. USP is
the tools that helps to make different from other and crate a identity of branded products.
PESTLE includes political, economical, social, technological, legal and environmental factors
that impact on business if any changes arises. This report also covered micro factor that contains
competitors, intermediaries suppliers and company which impact Amazon business. For solving
these issue it need to make solid planning and strategy that will helps to reduce the risk. Digital
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business includes various sources increase growth of business and helps to sustainable at
competitive market place by adopting new technology and methods.
REFERENCE
Books and Journal
Alizadeh, T. and Sipe, N., 2016. Vancouver's Digital Strategy: Disruption, New Direction, or
Business as Usual?. International Journal of E-Planning Research (IJEPR). 5(4). pp.1-
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Carenys, J. and Moya, S., 2016. Digital game-based learning in accounting and business
education. Accounting Education. 25(6). pp.598-651.
Carenys, J. and Moya, S., 2016. Digital game-based learning in accounting and business
education. Accounting Education. 25(6). pp.598-651.
Choudary, S. P., Parker, G. G. and Van Alystne, M., 2015. Platform scale: How an emerging
business model helps startups build large empires with minimum investment. New York,
NY: Platform Thinking Labs.
Hansen, R. and Sia, S. K., 2015. Hummel's Digital Transformation Toward Omnichannel
Retailing: Key Lessons Learned. MIS Quarterly Executive. 14(2).
Japparova, I. and Rupeika-Apoga, R., 2017. Banking business models of the digital future: the
case of Latvia. European Research Studies. 20(3A). p.846.
Newman, N., and et.al., 2017. Reuters Institute digital news report 2017.
Nylén, D. and Holmström, J., 2015. Digital innovation strategy: A framework for diagnosing and
improving digital product and service innovation. Business Horizons. 58(1). pp.57-67.
Opreana, A. and Vinerean, S., 2015. A new development in online marketing: Introducing digital
inbound marketing. Expert Journal of Marketing. 3(1).
Otto, B., Bärenfänger, R. and Steinbuß, S., 2015. Digital business engineering: methodological
foundations and first experiences from the field.
Ovans, A., 2015. What is a business model. Retrieved July. 5. p.2016.
Paul, P., and et.al., 2018. Business Information Sciences emphasizing Digital Marketing as an
emerging field of Business & IT: A Study of Indian Private Universities.
Peng, Y., 2017. Affective networks: how WeChat enhances Tencent’s digital business
governance. Chinese Journal of Communication. 10(3). pp.264-278.
Singh, A. and Hess, T., 2017. How Chief Digital Officers Promote the Digital Transformation of
their Companies. MIS Quarterly Executive. 16(1).
Svahn, F., Mathiassen, L. and Lindgren, R., 2017. Embracing Digital Innovation in Incumbent
Firms: How Volvo Cars Managed Competing Concerns. Mis Quarterly. 41(1).
Todor, R. D., 2016. Blending traditional and digital marketing. Bulletin of the Transilvania
University of Brasov. Economic Sciences. Series V. 9(1). p.51.
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