Strategic Analysis of Amazon: PESTLE, Porter's Five Forces, and More

This report provides a comprehensive strategic analysis of Amazon, a leading e-commerce company. It begins with an introduction to strategic management and its application to Amazon, outlining the company's history and operational model. The report then delves into an analysis of Amazon's strengths and weaknesses, exploring factors such as its innovative strategies, customer orientation, and redressal mechanisms. The analysis further examines the opportunities and threats facing Amazon, including market competition and the dynamic business environment. The report then applies Porter's Five Forces and PESTLE analysis to assess the external factors influencing Amazon, including political, economic, social, technological, legal, and environmental factors. The conclusion summarizes the key findings and implications for Amazon's future strategic direction. This report is designed to give skills in analyzing key issues facing companies at an industry, national and global level.

Strategic Management

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK1 ............................................................................................................................................3
How firm may show strengths or weaknesses........................................................................3
TASK 2 ...........................................................................................................................................4
The essence of this is to give you skills in analysing key issues facing companies at an
industry, national and global level..........................................................................................4
TASK 3 ...........................................................................................................................................5
Pestle Analysis........................................................................................................................5
CONCLUSION ...............................................................................................................................7
REFERENCES ...............................................................................................................................8
Books And Journals................................................................................................................8

INTRODUCTION
Strategic management provide a path for achieving the goals and and provide directions
for more innovative ideas to develop their plans and policies. Amazon Company follow the
strategic plan for development of the organization. Amazon is a multinational company that
operate online marketplace. Amazon company is founded by Jeff Bezos on 5th july 1994 in
Bellevue .This report shows the external , internal factors of the organization and their strength
weakness .In order to identify the strategies and factors that influenced the organization that are
mentioned below(Hitt and Duane Ireland, 2017).
TASK1
How firm may show strengths or weaknesses
Amazon is currently is one of the leading names in E commerce platform . It is catering
Amazon is one of the best performing organisations in the current market environment. One of
the major reasons for the growth of is that the company believes in delivering products and
services at affordable prices so that it can enhance its current customer base and also work
towards achieving customer loyalty. With the right customer base and customer loyalty, Amazon
is able to build a good and reputable position for itself in the current market. Analyses of
Amazon's strength and weaknesses as well as opportunity and threats are mentioned below:-
Strengths: The company is always coming up with fresh and innovative strategies which
in turn is helping to company to acquire good market share in the target market. Implementation
of good strategies,production of quality goods and services and expansion of business across the
world is one of the major competitive strengths of the company. The company is customer
oriented and introduce the goods and services that aligns and satisfies the needs of the customers.
The company also focuses on innovation and has a separate team dedicated towards the same in
order to produce new and innovative products which in turn can help the company to attract
more customers.
Weaknesses: Although Amazon is a flourishing organisation but its still needs to work on
its redress al mechanism in order to solve the customer query more effectively and efficiently.
The company currently lacks sustainability and this can be termed as one of weaknesses of the
company (Trigeorgis and Reuer, 2017). Also there has been a a lot of talks about company's

relations with its employees. The employees has shown major dislike towards company's certain
policies and this has adversely affected employee-management relations.
Opportunities: Amazon always capitalises on the opportunities available in the market in
order to compete with its rival and gain a competitive edge over them. In simple words, its
relevant to say that the company opted for diversification strategy in order to enhance its current
market position in the market environment. Amazon has its business scattered not only in united
kingdom but also all across the globe and this is one reason why it is able to acquire larger
market share in comparison to its competitors(Ethiraj, Gambardella and Helfat, 2016).
Threats: Amazon's biggest threat is its budding competitors in the market. There is
extensive competition among the market and amazon is trying to respond to the same by
introducing new strategies in the company and capitalising on the same. Also the dynamic
business environment can lead to more unexpected threats for the company such as changes in
the government regulation, introduction of new legal policies etc. In order to carry out the
business operations for a long run, the company should be ready to respond to these threats by
providing prominent and effective solutions.
TASK 2
The essence of this is to give you skills in analysing key issues facing companies at an industry,
national and global level
The essence of this is to give you skills in analysing key issues facing companies at an
industry, national and global level. Whilst you may include a range of examples from your home
country the nuances of different contexts is important to include.
Porter's five forces
There are number of issues faced by the company at global and national level. In order to
identify these factors, Porters five forces are applied in a company so that the company can
respond to these factors effectively and efficiently(Shujahat, Hussain, and Ali, 2017).
Threat of new entrants: In every industry, there is always a possibility for entries of new
and budding organisations. This is one factor that can really hamper the ongoing operations of a
established business entity. Amazon is one company that will not be effected by the new
entrants in the market as it is operating at a very large scale and it very difficult for a new
entrants to reach at such at Amazon's current market scale.

Buyer's bargaining power: Sometimes, buyers may bargain for the offering provided by
the company. Buyer's bargain is always considered a loss for the companies. In case of Amazon,
the company is completely customer driven hence the customers try and bargain from the
company. The company provides good quality goods and services to the consumers with the best
price possible so that the consumers get satisfied. Home appliances and Technology based
products are the most bargained ones in Amazon(Bogers, Chesbrough, and Teece, 2019)
Threat of Substitute: In today's world, there is a substitute for each and every product
and service. Hence it becomes too difficult for the companies to maintain its customer loyalty
and retain its consumers. Amazon is also highly effected by the same in the market. In order to
cope up with the same, the company tries to provide the premium quality customer service so
that the company can increase customer retention as well as enhance its customer attraction.
Supplier's Bargaining Power: Suppliers play a prominent role in the functioning of the
company. They are responsible for providing the company with essential goods to carry out the
operations of the organisation. Sometimes, these suppliers may try to bargain from the company
and this may affect the revenues of the company. In case of Amazon, Since the company is
scattered globally it capitalises on stock from all around the world and usually do not face any
shortage of supplies. That's why, it is right to say that the company do not get lightly or
moderately effected by the above mentioned factor.
Competition in the industry: The companies that are operating their business online and
through E commerce platforms have high degree of competition within them. Amazon also faces
a high level competition in the market. For example Flip kart ,eBay etc. provides big competition
to Amazon. In order to deal with the competition, Amazon tries to give best customer experience
to its target consumers in order to gain competitive benefit in the market.
TASK 3
Pestle Analysis
Pestle analysis used to identify the external factors of the organization. This framework
helps to analyse the factors that affect their performance and growth in business. Pestle
analysis the external factors that is political, economical, social, technological, legal and
environmental(Darling, McClanahan and Maina, 2019).

Pestle analyse of the Amazon
Amazon is the e-commerce company started as an online marketplace for the books but
expand their business in all over fields. E-commerce is platform for the people to buy things
online if they are not willing to go outside for purchasing so they get anything at their place.
Amazon is also investing on the sellers to increase the customer and shares so let's discuss the
external factors of the amazon .
Political factors: Amazon is a online selling platform which provide a services to many
customers globally. Amazon is multinational company so they are facing issues of government
activities that effect the success of amazon. In the USA and UK the amazon took a decision to
increase a wages for their workers because of the political pressure. Another factor is that in
some country amazon is banned by the government for selling their products for those company
who have membership of the amazon. Government helps the organization because of their huge
investment but still there are some laws and norms of every country that effect the organization
which is very difficult for them(Makadok, Burton and Barney, 2018).
Economical Factors : Amazon operates across many countries if the economic
conditions are positive in that countries so its create a opportunities to grow fast. Amazon is
connecting with the stores and retailers so retailing is the platform where producers provide their
products and service to consumers. Consumers by their products from retailers in any conditions
so sometimes they survive in worst condition so that is why amazon connect with retailers
directly. Consumers cash flow is increasing which is a very good opportunities for the
organisation because if they have high cash flow then their choices and demands sets accordingly
and that create a good chance to expand the business and increase market share. Economic
slowdown can be a threat for the company for example Chinese economy condition is slowing
these days that create a threat for the organization expansion (Alborov, Kontsevaya and
Kuznetsovd, 2017).
Social factors: Social factors that is trends, choice and behaviour affects the firm
positively or negatively . Now a days online shopping makes a human too lazy, they do not want
to go outside they just want to stay at home so amazon take advantage of this situation and
provide most of thing at home just like clothing , grocery , crockery , electronics,streaming
movies , books etc. Young generation is crazy for the online shopping and easy access of internet
increase the ratio of the mobiles phones and online shopping . Online shopping become a hobby

for the peoples so , amazon gives opportunities to producer and retailer to join with the company
and take advantage of the situation. By this opportunity many people become financially good by
selling their services and products on amazon (Altukhova and Semko, 2018).
Technological factors: Technology is a pillar of the company because technology
provide very good opportunity for the organization and through this Amazon is the one pf the
most profitable company in the worldwide. Amazon is more focused on the technologies that is
web services system to satisfy their customers. Amazon is working on the new technologies or
ideas for the better delivery system. Amazon prime Air is the new project or idea of the company
that is future delivery system of the product through drones. Technologies is creating
opportunities for the company but sometimes its become a threat for the company for example
cybercrime is threat because in the consumers and third party seller are more afraid to registered
their information such as credit card, debit card, personal information on the website. Because
many times there are several clients that are facing the issues of hacking and lost monthly sales
etc. So after regular work on technologies they are facing issues so they push the work of
technologies.
Environmental factors: It is very difficult to measure that amazon is affecting the
environment. Too many people say that amazon is using carbons contributing in environmental
damages or traffic related, but they are looking for the zero carbon shipments means they have a
goal to make at least 50% shipments carbon free by 2030 ( Pfarrer, Devers and Weber, 2019).
Legal factors: There are several laws and legal factors that affect the amazon for
example consumer protection law , data protection law etc. real products are demands of the
consumer so amazon is already has some policy that no one can sell fake products on the website
. The sale of these types of product are not allowed to sale . This effort of amazon create a
opportunity for them to minimize the unreal products on the website But there are some laws that
is become threat for the company for example consumer privacy law and their safety plans ,
protection of the health of its employees.
CONCLUSION
From the above information it has been concluded that amazon is working efficiently
with strategies to gain customer base and provide best services to their consumer but there are
some external factors that create a impact on the organization so by taking care of these factors
amazon is doing great and able to achieve their goals and objectives.

REFERENCES
Books And Journals
Alborov, R.A., Klychova, G.S. and Kuznetsovd, V.P., 2017. The development of management
and strategic management accounting in agriculture.Journal of engineering and applied
sciences,12(19) .pp.4979-4984.
Altukhova, L.A. and Semko, I.A., 2018. Strategic management of competitive agribusiness
organizations model.International Journal of Advanced Studies,8(2). pp.9-21.
Bogers, M., Chesbrough, H., and Teece, D.J., 2019. Strategic management of open innovation: A
dynamic capabilities perspective.California Management Review,62(1).pp.77-94.
Darling, E.S., Maina, J., Gurney, G.G., Graham, N.A., Januchowski-Hartley, F., Cinner, J.E.,
Mora, C., Hicks, C.C., Maire, E. and Puotinen, M., 2019. Social–environmental drivers
inform strategic management of coral reefs in the Anthropocene.Nature ecology &
evolution,3(9), .pp.1341-1350.
Ethiraj, S.K., Gambardella, A. and Helfat, C.E., 2016. Replication in strategic
management.Strategic Management Journal,37(11).pp.2191-2192.
Hitt, M. and Duane Ireland, R., 2017. The intersection of entrepreneurship and strategic
management research.The Blackwell handbook of entrepreneurship. pp.45-63.
Makadok, R., Burton, R. and Barney, J., 2018. A practical guide for making theory contributions
in strategic management.Strategic Management Journal,39(6). pp.1530-1545.
Pfarrer, M.D., Devers, C.E., and Weber, L., 2019. Sociocognitive perspectives in strategic
management.Academy of Management Review,44(4).pp.767-774.
Shujahat, M., Hussain, S., and Ali, J., 2017. Strategic management model with lens of
knowledge management and competitive intelligence.VINE Journal of Information and
Knowledge Management Systems.
Trigeorgis, L. and Reuer, J.J., 2017. Real options theory in strategic management.Strategic
Management Journal,38(1) .pp.42-63.