MSc Global Strategy and Sustainability Report: Amazon Analysis

This report provides a comprehensive analysis of Amazon's global strategy and sustainability. It begins with an introduction to global strategy and Amazon's business model, followed by an external analysis using Porter's Five Forces and PESTLE frameworks to assess the competitive environment and macro-environmental factors. The report then delves into an internal analysis employing VRIO and McKinsey 7S models to evaluate Amazon's resources, capabilities, and organizational effectiveness. Corporate Social Responsibility (CSR) and sustainability are critically analyzed, along with a SWOT analysis of Amazon. The report concludes with recommendations for Amazon's strategy development, including various modes of entry into new markets, and suggestions for enhancing its CSR and sustainability initiatives. The report aims to provide a holistic understanding of Amazon's strategic positioning and future prospects.

Global Strategy and
Sustainability

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK ..............................................................................................................................................3
External analysis of the industry by using strategic models.......................................................3
Internal analysis of the industry by using business strategies models........................................6
Critically analysis and evaluation of Corporate social responsibility and sustainability............8
SWOT Analysis of Amazon........................................................................................................9
Recommendation for Amazon's strategy development and various modes of entry in the new
market..........................................................................................................................................9
Recommendations for Corporate Social Responsibility and Sustainability.............................10
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
A global strategy is the business plans for an organisation to expand their business in the
international market to increase the sale of goods and services globally. This will help in
attracting the new market and their strategies and this will lead to earn maximum profit.
Innovation is the key to success in any organisation and with this the company can expand their
target customer and sustain in the new market (Sjåfjell and Bruner, 2019). Amazon is the chosen
organisation for this report, It is the multinational company which is deals in e-commerce, cloud
computing, artificial intelligence and digital streaming. It is founded by Jeff Bezos in Bellevue,
Washington. They have earned the revenue of US$386.064 billion. This report will cover the
analysis of external factors by using two strategies Porter's five force model and PESTLE
analysis. Furthermore, it also analyse the VRIO and McKinsey 7s model to evaluate the internal
factors of the business. It also explains the Corporate social responsibility and their
recommendation and also analyse the modes of entry into new market.
TASK
External analysis of the industry by using strategic models.
There are various strategies to analyse the external factors of the business environment
and in this report Porter's five force model and PESTLE analysis has been taken that will help in
evaluating the external factors of the business environment.
Porter's five force model
It is the framework that analyse the competitive environment of the business and help in
analyse the various competitors in the market. This include the power of the competitors, threat
from supplier,customer and entry of new market that effects sustainability and profitability of the
company. Amazon is the most recognized brand in the world and it is trying to develop
innovation an disruptive technology to enhance their strategic goals . For this, It is important to
recognise the various factors of external environment. It analyse the various aspects of the
business that are explained as follows:
 Threat of new market player: There is high threat of new of new market player as It
does not need high investment for launching a new business. There may be chance of
entry of the new company in the market this can slowdown the business of Amazon. It is
important for the new firm to analyse the barriers to entry like patents and rights.

 Power of customer: the buyer of the product have the power to drive the price of the
product down and this would happen, when an organisation is unable to meet the need of
the customers(Nasrollahi and et. al., 2020). To now the power of buyer, It is important to
understand how much the firm is generating sale and analyse the group of buyer and
what is the importance of their firm's product for their potential costumers. Amazon is
offering quality goods but customer can switch to other brand like Walmart make the
purchase of products of their choice.
 Power of supplier: There is moderate power of supplier as they can stop the supply of
goods and trouble the organisation. There are large number of supplier in the market and
each one is offering different product according to their specifications and innovation. An
organisation have to analyse the number of supplier in the market and what is the
uniqueness of their product and what is the prices of their goods and what are the
alternatives of the company. Amazon have to analyse all the factors that can be a threat
for the company.
 Threat of substitution: This is the high threat in which the company may face the issue
that other firm is manufacturing and offering the similar product that will lead to decrease
the market demand of the Amazon product due to the easy availability of raw material
and other resources. It is necessary to analyse the number of product and their
differentiators in the market.
 Competitive rivalries: There is high threat of rivalries as there are many competitors in
the market. Various factor which describe the power of the competitor in the market.
Organisation have to analyse the strength of the competitors that how many competitors
are there in the market and who is the tough competitors in the business environment.
Compare the quality of products and the cost of he the existing products in comparison of
the competitors. Amazon is competing against the top brand like Apple, Google and
Microsoft so this is the threat for the Amazon in operating their business.
PESTLE Analysis
It is the framework of analysing the macro factors in the business environment and also help to
evaluate the areas of improvement and innovation. It includes political, economical, social,
technological and environmental factors. Amazon is working on global basis and there are
various factors that effects the external environment of the company and these are as follows:

 Political factors: These are the factors which includes Government policy, trade policy,
labour law, environmental law and political stability in the country. These all factors is
considered and implemented by the government only, there is no interference of private
authority. Amazon is the multinational company and the government of the United
Kingdom is stable and this will help the company to run their business operations
smoothly. There is positive impact of these factors on the business environment.
 Economical factors: These are the factors which includes economic growth, interest
rate, import and export duties, inflation, taxation rate and disposable income of the
society(Mahaffy and et. al., 2019). For any organisation, It is important to analyse the
factors that can be the cause of slowdown of business sale. In UK, The economic
condition of the country is good and standard of living of the individual is well
maintained so this will impact the business positively and can launch the premium
product as the population of the UK, have the purchasing power to buy the expensive and
premium products. Amazon can get the advantage of enhanced economy of the country
and can launch the premium products and attract the large group of customer.
 Social factors: These are the factors which include the sociocultural aspect of the
business environment. This also includes population growth, age distribution, career
attitude and health consciousness. Amazon is dealing in advance technology products and
offering innovative products. This will help to grab the target customer in the large
market. It is not necessary to do the business in such a way that any of the activity will
not hurt the social values of the individual and Amazon is not meeting the expectation as
it is considering the western culture of the company. The company is focusing on giving
various employment opportunities so that they can benefit the society as well.
 Technological factors: These are the factors which includes the innovation in the
products and services of the company(Kourtit, Suzuki and Nijkamp, 2017). In the
competitive world, it is important to offer the innovative and advance product so that
large group of customer can attract to their brand and increase the sale of the product and
services. Amazon is manufacturing innovative and keep on developing the product that is
meeting the expectation of the customer. This is positively impacting the business and
leads to increase the market size of the company.

 Legal Factors: These are the factors which include the health, advertising standards,
consumer rights and various laws that is associated to the business. This also includes the
product safety, product labelling. This is important for every organisation to run their
business operation in a lawful manner so that they can create the good brand image of the
company. Amazon is the growing organisation and need to focus on legal requirement of
the business so that various operational activities will be run in a appropriate manner.
Company is working on global basis and this is some time tough to follow all the
corporate law in order to make the good brand image of the company.
 Environmental factors: These are the factors which is associated with the
environmental law to be followed in order to save the environment. This includes
pollution, climate change and factors that are effecting the environment. Organisation
must follow the environmental law and recycling of various products and also follow the
waste management polices that will give the direction in order to reduce the waste in the
production and consumption process (Jia and et. al., 2020). Amazon is dealing in online
business that will help in reducing the use of paper and elimination the physical stores
that will help in less use of tree for furniture and land or infrastructure.
Internal analysis of the industry by using business strategies models.
Strategic models are the pathway of analyse the factors of the micro environment and
their impact on the business. It will help in allocation of resources and also leads to understand
the competitive advantage and also help in getting the strength and weaknesses of the business.
This report will analyse the VRIO and McKinsey 7 s model and these are explained as follows:
VRIO analysis
It is the strategic tool that is used to analyse the capabilities and resources of the
organisation that will help in designing the strategies for the long term business. It is stand
for Valuable, rarity, inimitability and organisation(Glaeser, 2016). These four aspects of
the business will help in getting the real prospective of the business. All the prospective of
the business is explained in given table:
Resources V
Valuable
R
Rare
I
Inimitable
O
Organized
Financial Yes Yes Yes Yes

resources
Strategic
warehouses and
distribution hubs
Yes Yes No No
Skilled workforce Yes No No No
Patent Yes No No No
 Valuable: Financial resources of the Amazon is is valuable it give the various
opportunities to expand their market size and range of products. When the company
having the sufficient financial resources, it will give strength to the operations in the
company (Gajdová and Majdúchová, 2018). Warehousing and the distribution hub is also
the valuable, as the company is using the quick delivery services with proper logistics.
Skilled work force is also valuable for the company as they give their best to achieve the
organizational goal. Patent is also valuable as these contribute in the enhancing the brand
image of the company.
 Rare: Amazon is working on global basis with huge investment so financial resources of
the company is rare as they give chance for experimentation in new areas. Warehousing
and distribution of the company is rare as they use the specific logistics method for the
quick delivery of the products.
 Inimitable: Under this attribute, Financial resources of the company is inimitable as it
depends on availability of the funds in the specific organisation. This will help in
innovation and advancement of the products.
 Organized: the financial resources of the company is organised as the operational
manager has done the right allocation of financial resources that can effectively used in
the business activities.
McKinsey 7s model
It is the business model that help in analysing the effectiveness of the organisation with
the evaluation of seven element structure, strategy, skill, system, shared values, style and
staff(Fuss, Barros and Poganietz, 2018). It is developed in 1980 with the aim that how the seven

element align together to form the effectiveness of the business. All the elements of the business
in explained as follows:
 Structure: It is refers to the business structure of the company that explain who is
accountable to whom. In Amazon, the management inn following the centralized system
in which all the employees is accountable to their seniors and their reporting manager in
order to make the effective communication in the business.
 Strategy: It refers to the action plan of the business and their outcomes and Amazon is
using brick-and-mortar model to make better experience while shopping online and be a
part of single purchase.
 Skills: It refers to the capabilities and the competencies of the business that helps in
achieving the business goal (Doppelt, 2017). Amazon is working with their core
competencies like distribution channel, advance technology and logistics.
 Staff: The manpower in the amazon having the skills and knowledge that will help them
in manufacturing innovative products that will leads to attract the large group of customer
in the United state.
 Style: The attitude of the seniors in the company is creating the pathway to attain all the
business activities. This can be evaluated by analysing the decision-making and
behaviour to their subordinates in the organisation. Amazon is using the formal
leadership style in which all the employee is accountable to their subordinates and they
give their valuable suggestions.
 Systems: This is the technical system of the company that what techniques and
equipment is used the manufacturers that is helping in offering quality products. Amazon
is using the logistics in order to meet the advantages of technological world.
 Shared values: These are the values and ethics of the an organisation that is helping to
achieve the business goal in a ethical manner. Amazon is working on global and
conducting their business in ethical way irrespective of their religion and culture.
Critically analysis and evaluation of Corporate social responsibility and sustainability.
Corporate social responsibility that help the companies to be socially accountable to the
employees, their share holders and the society. It is the practice of benefiting the society in term
of saving the environment or creating social values (Mello Bandeira and et. al., 2019). There are

various business model that is practising the business to contribution towards society and the are
as follows:
Carroll's CSR Pyramid is the framework that will help in knowing the importance of
corporate social responsibility in the business environment. This also impact the business in the
positive aspect that will leads to achieve the business goal and also conduct the corporate social
responsibility.
Characteristics of Carroll CSR Pyramid are as follows:
 The key objective is to earn the profit first. It is important for the company to generate
higher profit then do the corporate social responsibility.
 Organisation must complies with all the rules and law that is associated with the business.
 It is necessary to meet the ethical responsibilities of the business before doing further.
CRS activity conducted by the Amazon are given below:
 In the tough time of COVID-19, they have told their employees to do complete work
from home, until the situation gets back to normal.
 They are highly investing in wind and solar to reach 80% renewable energy in their
business operation by 2024.
 The company has started the packaging-free program in various cities as they are
delivering the product with the original packaging without additional packaging.
SWOT Analysis of Amazon.
It is the business tool that analyse the strength, weaknesses, opportunities and threat of an
organisation (Dau, Moore and Soto, 2016). The primary objective of this framework is to create
awareness in all these factors and then function their operations accordingly.
Strength Weaknesses
 Amazon have the strong financial status
in the market and this is the leading
company in the e-commerce.
 Company is using the effective pricing
strategy to attract the large group of
customer.
 The company has launched the fire
phone which is the big flop in the
market and resulting high debts.
 The margins of the company is getting
shrink due to expensive delivery
networks.
Opportunities Threat

 Amazon can introduce their in-house
brand in different product.
 Amazon can open their physical stores
outside the U.S.
 There is a high rules and regulation that
effects the functionality of the business.
 There are many competitors in the
market that can slowdown the sale of
Amazon.
Recommendation for Amazon's strategy development and various modes of entry in the new
market.
Amazon is doing very well in the competitive market by using the innovation and
advance technology in their business operations. There are certain strategy which has to be
rectified by the business. Amazon should do the proper market research and then perform their
business operations that will help in generating higher profit. Company should make the physical
stores outside the U.S. So that large group of customer which are not using the online platform
can make the purchase easily.
Various modes of entry in the new market are as follows:
 Franchising: It is type of business in which the owner of the business grant the
permission to the individual or a group to run a business by selling of products and
services by using this system. Amazon can expand their business by giving the part of
business on franchise that will help in earn more revenue(Bosselmann, 2016).
 Partnering:It is the agreement between the two or more people for the doing business
with the motive of achieving the conman goal of the company. Amazon also can expand
their market size by doing partnership in the new market.
 Joint Venture: It is the business arrangement in which two or more parties are agreed to
share their resources in accomplishing a specific task.
Recommendations for Corporate Social Responsibility and Sustainability.
The main aim of the Corporate Social Responsibility is to earn the profit by the
organisation and then contribute in the society. Amazon can give the fair share of profit to their
employees and also provide positive working environment that will help in enhancing the

efficiencies of the employees. Organisation have to introduce innovative and advance product to
sustain in the marketplace.

CONCLUSION
This is concluded form the above report that global strategies play an important role in
the development of an organisation as it give the pathway for implementing the different
business model. This report have covered the external analysis of the industry by use Porter's
five force model in which Amazon have to take the corrective actions with the consideration of
achieving the higher growth in the market and also use PESTLE Analysis in which political and
technological factors have the positive impact on business. On other hand, Legal and
environmental factors have the negative impact on the business. Furthermore, It also analyse the
internal environment of the business by using VRIO and McKinsey 7 s model in which structure,
style, system, skills and shared values of the business has been analysed that help in enhancing
the effectiveness of the business.