MSc Global Strategy and Sustainability Report: Analyzing Amazon

This report provides a comprehensive analysis of Amazon's global strategy and sustainability practices. It begins with an introduction to Amazon and its market position, followed by an examination of the external environment using PESTEL analysis, and internal factors impacting the organization through VRIO and value chain analysis. The report then delves into Amazon's corporate social responsibility (CSR) and sustainability initiatives, evaluating their effectiveness. It assesses Amazon's strategic development, global challenges, and the measures taken to address them, culminating in recommendations for sustainable global development. The report offers a detailed overview of Amazon's operations and suggests improvements for its future endeavors, with a focus on enhancing its global impact and sustainability efforts.

Global Strategy and
Sustainability

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
External environment-.................................................................................................................1
Internal factors that affects organization .....................................................................................3
Identification, analysis, and evaluation of the corporate social responsibility and sustainability
for Amazon..................................................................................................................................5
Evaluation of the CSR and sustainability....................................................................................7
Analysis of all the strategic development of Amazon and examination of all the global
challenges that it faces and the measures that it take and recommendations for global
development.................................................................................................................................7
Recommendations for sustainability............................................................................................8
CONCLUSION................................................................................................................................9
REFERENCE.................................................................................................................................10

INTRODUCTION
Amazon is one of the most crucial firm that is operational in the current market scenario
and it was not so since its starting but with sheer determination and excellence towards work of
the founder of the company which is Jeff Bezos. The person took the company to a new heights
of success and it also proved useful for the owner himself as he became the most richest person
in the world and holds that position consistently since 2017. In this presentation there is a brief
discussion of all the internal as well as external factors that impacts the working of the firm that
is Amazon and its CEO. Apart from this the presentation also covers a brief summary and
appropriate recommendations for Amazon.com with justification.
MAIN BODY
External environment-
External environment is defined as atmosphere of organization that covers outside
business understanding and factors which might be affect the businesses. Amazon is large size
organization that mainly focuses on different factors and functions in which it is operating their
business. The PESTLE analysis in relation to selected organization are defined below:
PESTEL analysis-
The PESTEL analysis of Amazon is explained as follows-
Political factors- Amazon faces diverse political climate in the different countries where
it is operating (Henriques and Brilha, 2017). Thus these factors influence its operations because
its level of income and profitability can be affected by their influence and as it operates on a
model of low price it will be able to enhance its profitability according to the situation. The
Government Policy in many of the countries where it operates is acting in its favour which can
influence its profits to increase. Thus, it can be said that the consideration of political factors is
crucial for Amazon because it will be helpful for it so that it can adapt quickly to the changes
which happen in the political environment.
Economic factors- The economic climate can change quickly which can thereby
influence the overall income and profitability of a company. Thus if Economic growth in a
country is slow in some of the countries where Amazon operates then this is going to affect the
level of income of the company. Therefore, it is required from the company that it takes the
1

economic growth into consideration which will help it to be able to attain the economic
parameters in a better way.
Social factors- The social factors can create an influence on the level of operations of the
company (Long and Lin, 2018). The lifestyle attitudes of the customers can impact the prices set
by the organizations. Thus in this way Amazon uses low prices so that it is able to work on this
particular factor effectively and efficiently for its own advantage so that the level of profitability
can be enhanced. It is important for the company that the social needs and requirements of the
customers can be taken into account which will enable it to be able to attain the wide range of
social goals and objectives.
Technological factors- The technological factors can affect the business of Amazon
because the technological change in the dynamic business environment has to be considered by
it. Therefore in this way the convenience which is offered by the company to the customers by
the company is under its technological awareness which it has shown by adapting to the new
needs and requirements effectively and efficiently. It is important that the budget of the company
is adjusted according to the needs and requirements so that the attainment of the technological
proficiency can be done appropriately.
Environmental factors- The environmental factors are nowadays important for any
company because they have to be considered by it by effectively moulding itself according to the
environmental needs and requirements (Inshakov, Bogachkova and Popkova, 2019). Amazon
offers great customer service and thus it ensures that it makes use of environment-friendly
packaging so that the better use of the available resources of the environment can be made in a
proper manner. It is important that the environment is given due consideration so that the
strategic changes can be implemented accordingly.
Legal factors- The legal rules and regulations of a country are important for a business
which is operating there. In the context of Amazon, it has to follow the laws regarding the price
caps to be put by the government and thus has to use Low Price Policy in some of the countries
where it operates its business operations. It is crucial that the legal considerations can be
implemented by the organizations so that the appropriate goals and objectives are attained by
adjusting the level of operations.
Porter's 5 force model: This is defined as framework which uses by organization to
analyse the competition and maintaining the good performance in competitive market. Amazon
2

is running their business by using new technology such as it using cloud computing and others
that increases performance. The five forces are as as explained:
Bargaining power of buyers: This means how easy customers can reduce the prices of
their products and services (Linneberg, Madsen and Nielsen, 2019). In relation to Amazon, there
is moderate buying power of customers due to providing high quality of information and
availability of substitutes that can influence customers towards other firm. To attracts the large
number of customers selected organization is require to provide its products at less prices than
competitors that can help to increase the customers and profitability.
Bargaining power of Suppliers: In given case study has shown bargaining power of
suppliers in relation to Amazon is low as availability of many suppliers in different country can
help organization to buy the products at lower prices with better quality which can help to
increase the organizational productivity and profitability in changing environment.
Threat of new entrants: In relation to Online retail sector there is higher threat of new
entrants as anyone can enter in to retail sector and by using new technology it can sale their
products and services. The threat of new entrants in context to Amazon is high that might be
create the challenge for organization to run their business effectively. To reduce this, better
quality and lower pricing strategy should be adopt that provides competitive advantages.
Threat of substitutes: This means availability of substitute products that can be get by
customers in case of increasing prices. There is high threat of substitution where customers select
best option by comparing prices that can affects the organizational performance.
Competitive rivalry: From the Amazon case study it has analysed that there are range
number of competitor in online retail sector such as Walmart, Farmfoods, Tesco, and others
which can be use by customers to buy the products. The management of chosen organization is
needed to introduce their retailing products at lower prices with quality maintain that provides
competitive advantages.
Internal factors that affects organization
VRIO analysis
This is a model which uses by organization to determine the resources and capabilities of
organization that supports to run online business in changing environment. The resources of
Amazon are evaluated as:
3

RESOURCES VALUEABLE RARE INIMMITABLE ORGANISED
Products and services
development
Yes No No No
Distribution Network Yes Yes No No
Technology Yes Yes Yes No
Customer service Yes Yes Yes Yes
Valuable: In Amazon all key resources such as product & service development,
distribution network, technology and customer service are valuable that are uses to provide better
experience to customers. By developing new product and using new such Amazon increases
sales and performance effectively (Kuzey and Uyar, 2017).
Rare: Amazon is using wider distribution network and prime delivery that influence the
customers to get easy and fast delivery of products. This source provides the competitive
advantages to selected organisation and develop the business performance.
Inimitable: For organization it is important that products which are providing by
organization are inimitable that can helps to attracts the large number of customers. Amazon is
using cloud computing, Wish List, Autorip, Amazon web series, cloud drive and research that
can help to operate a business regularly and increase the business profitability.
Organised: This means all resources and activities of organization should be organised
and managing that can help to run a business and increase profitability. The customer service in
relation to Amazon are properly organised that can help to manage the all functions and activities
accurately. The customer service of selected organisation provides right information and solve
the queries in the process of buying products that increase market share and productivity of
organization.
Therefore, by using VRIO analysis and value chain Amazon is analysing its internal
capabilities that can help to operate a business in changing environment and attain the
competitive advantages.
Value chain analysis-
This analysis is helpful in the determining the value created by the activities of the
company (Olawumi and Chan, 2018). Thus in this way this ensures that the value which is added
4

by each activity can be determined properly which helps in ensuring that the level of efficiency
and effectiveness can be enhanced in a proper manner. The following activities are included as a
part of this analysis-
Primary activities-
 Inbound logistics- Amazon has an efficient logistics system and has strong links with the
suppliers in the market. Through it, it can provide all the required products and services
to the customers as per their needs and requirements.
 Operations- Amazon has the best operations which are used by it for enhancing the
overall efficiency and effectiveness level of its supplies (PARK, 2019). This enables it to
be able to identify the improvements which are required in the supply chain so that they
can be brought to attain the goals and objectives.
 Outbound logistics- Amazon has the best outbound logistics which is helpful for it to be
able to manage its customers which is signified by its excellent customer service which it
provides to the customers. Therefore, it is desired so that the implementation of the
strategies and methods can be made by the company in an appropriate manner for the
attainment of the goals and objectives.
 Marketing and Sales- Amazon uses aggressive Marketing and Sales strategies to target
the customers. This is signified by the Wide selection and Convenience offered to the
customers. Thus, it is important that the consideration to these activities can be given so
that the company is able to attain the goals and objectives in the future.
 Services- Amazon provides the best services to the customers which helps in maximizing
the level of efficiency and effectiveness. This is signified by the excellent customer
service which it provides to the customers. It is required that the services of the
organization can be made more efficient so that the improvement can be brought in the
processes to deliver the quality products to the customers.
Support activities-
 Firm infrastructure- Amazon has a sound infrastructure with a presence of different
warehouses at different locations (Sangwan, Bhaka and Digalwar, 2018). This allows it to
offer wide selection to the customers. It is important because it is required because it will
enable the organizations to be able to develop products properly.
5

 Human resource management- Amazon manages its human resources properly which
allows it to be able to ensure that the overall efficiency and effectiveness can be enhanced
(Kaur and Sharma, 2018). This is signified by the excellent customer service which is
offered by it to the customers. It is crucial that the HRM processes are made more
efficient so that the efficiency and effectiveness of the employees can be enhanced so that
they attain their goals and objectives in the future.
 Technology development- Amazon has the best technology to offer to the customers
which helps in ensuring that it offers good services to the customers. This is signified by
the wide selection of products offered by it to the customers. It is important that the
technology is developed according to the changing time so that an innovative approach
can be adopted.
 Procurement- Amazon sources its raw materials efficiently from the suppliers offering it
the best price. This is signified by the low prices offered by it to the customers for various
types of products and services. It is crucial that the procurement of the different types of
resources can be done so that the level of demand can be fulfilled.
Identification, analysis, and evaluation of the corporate social responsibility and sustainability
for Amazon
Corporate social responsibility involves different type of policies and practices that a firm
does in order to fulfil all the social aspects that are generating employment opportunities, giving
quality products and services to the citizens of the society, and giving value for money so that it
can lead to increased standard of living in the long run (Lunde, 2018). There is an important
model that is Carroll's pyramid and with the help of it corporate social responsibilities of
Amazon can be analysed and evaluated in detail.
6

According to the above model there are four stages in which corporate social
responsibility is divided namely philanthropic, ethical, legal, and economic responsibilities. The
first that is Philanthropic responsibility says that a company should contribute towards the
resources to the community so that it can be utilised to its maximum and also contribute towards
improving the quality and standard of life so that all the citizens can fulfil all the desires. Second
is the ethical responsibility that is a company must perform all the activities that are right, fair,
and just so that equality can prevail in the society, and also the firm must avoid performing any
harmful activity. Third is the legal responsibility of the enterprise which says that a company
must operate within the legal boundaries and must obey all the rules and regulations in an
appropriate manner. The last one is the economic activity which acts as a base for all the other
responsibilities (Ocampo, 2019).
Sustainability is one of the most important aspect as it is related with adopting renewable
and sustainable sources of energy so that it can prove beneficial for the environment which is
very crucial in the present time as the environment is degrading every single day. Also Amazon
puts a lot of focus on this aspect and it takes various measures to reduce its carbon footprints and
its goal is to reach and work with 100% renewable sources of energy by the end of 2025 and
reduce the carbon emission to zero percent by the year 2050. The goal is further divided as its
7

objective is to reduce its 50% carbon consumption by the end of the year 2030 (Olawumi and
Chan, 2018).
Evaluation of the CSR and sustainability
Amazon is one of the biggest firm that is operational in the current market scenario and it
fulfils almost all of its corporate social responsibility and it has done major progress in majorly
two departments that is fulfilling renewable energy commitments and packaging improvements
(Quarshie, Salmi and Leuschne, 2016). Apart from that it also stand well ahead as compared with
other competitors in terms of sustainability as it focus more on the conserving the environment
by reducing its carbon footprints. Apart from this it can be said that there are many other aspects
too in which Amazon is surpassing all its other rivals that are also working in the similar industry
like providing cheaper goods and services and that too in every part of the world so that each and
every personnel's can avail its services that can help the citizens to get a quality life. By applying
the Carroll model it can be identified that Amazon is increasing their business performance as it
focuses on economic, political and environtal factor where it formulate effective strategies and
implement in their activities that can help to increase business performance.
Analysis of all the strategic development of Amazon and examination of all the global challenges
that it faces and the measures that it take and recommendations for global development
In terms of the global context it can be said that Amazon is placed at a position that can
help it to grow if it performs well and as per the expectations but it can change anytime since
there are many other firms too in the competitive line that can acquire the place of Amazon and
that too within a short time frame (Sahar, Zulkifli and Zakaria, 2019). Since the strength of the
company is its workforce as the number of individuals working for the organisation is pretty
huge and other is the impactful manager that lead to the achievement and attainment of all the
goals and objectives with full accuracy and preciseness. While the threat is the emerging of new
firms that pose a big challenge for the activities that the firm performs since they set prices of
their products and services very low and it is not feasible for Amazon to keep its prices that low
which results in decreased sales and subsequently profitability in the long run. Whereas the
weakness is the improper system of communication that leads in creation of the barriers within
the organisation that hampers the performance of the enterprise as a whole. The opportunities for
Amazon is that there is a ready market for it in other countries and due to the pandemic most of
the reputed organisations has feel very below and thus Amazon can take advantage of it to
8

capture the market share. Thus it can be recommended that there is a well set global market for
Amazon and it can exploit that opportunity very well. Also Amazon puts its prices competitive in
the market and thus it helps in increasing its sales and profitability that results in the growth and
development of the company in the long run.
Recommendations for sustainability
There are various aspects that Amazon faces since its deals in providing goods and
services to the citizens and people expect to get lower prices but it is not always possible for the
company to fulfil and stand up to the expectations of all the customers so it acts as a
disadvantage of the corporate social responsibility (Salinas, Gironá and Pinto, 2016). Apart from
that it can be said that it is not possible for Amazon to always stand up to the expectations of the
customers because all the buyers always want to maximise their satisfaction within a limited
budget. This is not feasible for the company since many products and services are costly enough
and it becomes difficult for the company to give those goods at a cheaper rate since all the firms
are operating with a single motive that is profitability and it cannot be achieved by this approach.
Also it is not possible for the company to operate without emitting carbon and thus it becomes
harmful for the environment but also for the company too since it harms the overall market value
of the organisation. Amazon can overcome all the disadvantages that are mentioned above in an
appropriate and precise manner by the way of detailed research and analysis about all the
relevant aspects so that it can lead to the achievement and accomplishment of all the aspects and
that too within a limited time period. Amazon must see all the aspects and must give a lot of
attention to all the factors since it can help the firm to grow and prosper in the market in which it
is operating but at the same time it can damage and destruct the overall image of the company if
it is not applied in an appropriate way. Further it can be said that Amazon is very well fulfilling
all the desires of the citizens but there are some loop holes too in the working and that can be
solved if a lot of attention has to put on the management of the company since it is the backbone
of every firm and for a company that is operating on such a wide scale it possess an extra value
too.
9

CONCLUSION
From the above it can be concluded that there are many factors that impacts the working
of the organisation that is Amazon and the factors are both internal as well as external in nature
and thus it is very crucial and critical to evaluate and analyse all the aspects since they carry a lot
of importance in the current market scenario. Apart from that it can be concluded that Amazon
fulfils almost each and every corporate social responsibility and sustainability aspects but it is
very important to keep improving because there are many other firms that are constantly
improving their performance in the industry and a little laziness can impact its performance.
Further it can be concluded that there are set standards and goals of the firm that is Amazon till
the year 2050 and if all of that are achieved in the way it has to be then the company can become
one of the biggest firm in the market and its rivals will not be able to beat it in the similar
industry.
10