2. Introduction & background
• Amazon.com is a prominent Internet-based business.
Headquarters locations are in Seattle, Washington.
• The world's largest online retailer operates there.
• The massive online retailer Amazon offers a variety of
goods, such as novels, music, films, home goods, technology,
toys, and a lot more.
• Their goods are directly delivered to huge numbers of
people.
Company Name: Amazon
Country name: USA
4. Amazon’s international strategic business decision
• Similar customer needs
• Global customers
• Transferable marketing:
Market drives Cost Drivers
• Scale economies
• Country-specific differences
• Favorable logistics
5. Amazon’s international strategic business decision
• Interdependence between
countries
• Competitors’ global strategies
Competitive
drivers
Government
drivers
• Trade policies
• Technical standards
• Host government policies
6. PESTLE Analysis
The term "pestle" refers to the intersection of
political, socioeconomic, social, intellectual,
ecological, and legal factors.
7. PESTLE Analysis For Amazon
• Political stability in advanced societies.
• Political lobbying.
• Government red tapes.
Political Economic
• Economic growth.
• Currency exchange rates.
• Taxation.
• Employment.
9. PESTLE Analysis For Amazon
• Ecological management.
• Sustainable operations.
Environmental Legal
• Laws in different countries.
• Labor laws.
10. The evaluation of the attractiveness of the USA as a
market using Porter’s Five Forces
Competition in the industry (Strong force)
• Amazon competes in a highly competitive industry, and an examination
of Amazon's rivals reveals that the competition in the e-commerce-
commerce market is escalating quickly.
• Alibaba, eBay, Walmart, Flipkart, and others are fierce rivals of Amazon.
11. The evaluation of the attractiveness of the USA as a
market using Porter’s Five Forces
The threat of new entrants (weak force)
• Amazon is a market titan with a great reputation as a brand. Additionally, it
benefits from agglomeration economies and extensive distribution and
storage facilities.
• Therefore, it can be difficult for any organization to overcome this brand
recognition and establish itself as a market leader.
• The danger of potential competitors is a low threat for Amazon.
12. The evaluation of the attractiveness of the USA as a
market using Porter’s Five Forces
The bargaining power of suppliers(moderate force)
• The range of goods for Amazon's eCommerce activities is within the
regulation of providers.
• Furthermore, Amazon depends on the hardware and software for
information systems in cloud services.
• The providers' negotiating strength is a moderate component in Amazon's
five forces study.
13. The evaluation of the attractiveness of the USA as a
market using Porter’s Five Forces
The bargaining power of customers(Strong force)
• In Porter's Five Forces Model, the negotiating power of customers is
moderate to high.
• The success of Amazon depends on how well its products are received
by customers.
• Although costs of switching are very low, a significant number of
replacements have appeared.
14. The evaluation of the attractiveness of the USA as a
market using Porter’s Five Forces
The threat of substitute products or services(Weak Force)
• The threat of replacement commodities and services is one of the factors
identified by Amazon Porter's Five Forces Analysis.
• These forces include a large availability of alternatives, the cheap cost of
alternatives, and low switching costs.
• Customers can simply choose a client without incurring any additional
fees thanks to the minimal switching prices.
15. SWOT Analysis
SWOT analysis is properly defined as a:-
The methodology for identifying and assessing
the main advantages, threats, opportunities, and
weaknesses of a firm, a project, a commodity, or
perhaps a single.
16. SWOT Analysis of Amazon
Strength
• Effective leadership is
committed to improving the
customer experience.
• Comparative advantage in
utilizing scalable and quick-to-
ramp-up IT services.
Weakness
• Free shipping might
occasionally be risky.
• Neglecting the
competition.
• Operation in near-zero
business margin.
17. SWOT Analysis of Amazon
Opportunities
• Online payments make it simpler to
expand a firm.
• efficiency using its own brand.
• The enlargement of the global
footprint.
Threats
• Concern over internet
buying grows as theft and
hacking become more
apparent.
• The risk of an aggressive
pricing strategy.
18. TOWS Analysis of Amazon
• Forming partnerships with
different payment platforms to
expand the business.
• Focus on reaching out to the
under-developed country to
expand the brand.
Strengths/opportunit
ies strategies
Weaknesses/opportu
nities strategies
• online payment method for the
shipment
• Use the brand efficiency to get
ahead of the competition
19. TOWS Analysis of Amazon
• Forming partnerships with
different payment platforms to
expand the business.
• Focus on reaching out to the
under-developed country to
expand the brand.
Strengths/threats
strategies
Weaknesses/threats
strategies
• Form a partnership with the
local supplier to neutralize the
rivals.
• Use a new advertising method
20. The evaluation of the suggested recommendations
Strengths/opportunities strategies
Amazon will be able to lower prices while making a profit by
creating relationships with various payment networks like
PayPal, Visa, Mastercard, etc. Additionally, this will aid in
business growth.
21. The evaluation of the suggested recommendations
Weaknesses/opportunities strategies –
Amazon can guarantee safety and avoid wasting crucial
business hours by using online transactions for shipping.
Amazon is renowned for being a reliable brand.
22. The evaluation of the suggested recommendations
Strengths/threats strategies
• Amazon will be capable of defeating the hackers and regaining the trust of
the customers by employing a cutting-edge safety system.
• Amazon will be able to reduce shipping costs by employing
its transportation network, which is advantageous for its firm.
23. The evaluation of the suggested recommendations
Weaknesses/threats strategies
• Amazon will be able to reduce production and shipping costs while at the
same time neutralizing the client by creating partnerships with local
providers.
24. Reference
• Fernandes Bento, D., Silva Gomes, E., Martins Guedes, V. and Coelho, E., 2020.
SWOT Matrix (Strengths, Weaknesses, Opportunities and Threats) on the
Amazon. REVISTA BRASILEIRA DE CIÊNCIAS DA AMAZÔNIA, 9(2), pp.11-18.
• Journal of Research on the Lepidoptera, 2019. Global Strategic Business
Management: Focusing On the Strategic Business Unit of Amazon.
• Marmol, T., Feys, B. and Probert, C., 2015. PESTLE analysis. London: 50 minutes.
• Mwololo, H., 2019. Business Model of Amazon. London: The Policy Press, pp.56-58.
• Schepp, B. and Schepp, D., 2009. Amazon top seller secrets. New York: AMACOM.
Market drivers: Market drivers include the following factor –
Similar customer needs: - Before introducing a new product to the market, Amazon always studies the demands of customers around the world.
2. Global customers: - Amazon consistently strives to create goods that are appropriate for customers from all geographical areas.
3. Transferable marketing: - Amazon reaches out to customers all across the world by using the transferrable marketing technique.
Cost drivers: - Cost drivers include the following factors that come into play while formulating international strategic business decisions –
Scale economies: - Amazon consistently tends to produce goods at a lower cost than its other market rivals.
Country-specific differences: - Customers vary from nation to nation. The variety of parameters are preferred by the clients. In addition, prices vary per nation. The products offered by the Amazon in India, for instance, are distinct from those offered in the USA.
Favorable logistics - All of the Amazon's consumers are taken into account. Every community's culture is respected. Therefore, Apple Inc. creates products in a nation that can meet the wants of the general population. For instance, there are differences in the shows accessible on Amazon.com in India and Canada.
Competitive drivers – Competitive drivers include the following factors –
1. Interdependence between countries - Today's globalized world has created economic, social, and political interdependence among nations. As a result, Amazon considers this element when developing a strategy.
2. Competitors’ global strategies - To make more high-quality products at competitive prices, Amazon constantly studies the tactics of its rivals.
Government drivers: Government drivers include the following factors –
Trade policies - Different governments have various trade policies in various nations
Technical standards: Amazon complies with all legal requirements. It offers goods in several regions with various technical standards.
Host government policies: Amazon always complies with and respects the laws of the country it is operating in. It pays taxes on time, and its workers follow the law in the nation.
Political stability: The Amazon has a great opportunity because of political stability in North America, Europe, and some parts of Asia. The business can increase its operations both inside and outside of these regions' nations. Keep in mind that economic stability in these areas is probably a byproduct of political stability
Political lobbying: Political lobbying may have a significant impact on how Amazon operates. It is impossible to ignore the impact of political elements like lobbying groups, unions, and the media. These organizations might easily have a detrimental effect on the business
Government red tapes: Government red tape in Asian nations like China, India, and the Arab world is expected to have a detrimental impact on the business. In Europe, when governments are creating restrictive rules in areas like antitrust difficulties, there are grave political concerns.
Economic factors:
Economic Growth: The corporation will benefit from economic expansion in a variety of industries, including online retail, food, electronics, clothes, and e-books.
Currency exchange rates: currency fluctuations will have a big impact on how Amazon operates. This is taking into account the fact that up to 30% of the company's sales may come from foreign markets. Therefore, a strong dollar will have a beneficial impact on its operating expenses and combined net sales.
Taxation: Additionally, taxes have a significant impact on the business. Tax introduction or exemption will have a significant effect on the business. For instance, if adopted, the proposed "internet tax" would raise the business's operating expenses.
Employment: Employment will have a significant impact on consumers' disposable income and spending power in both the domestic and global economies. On the other hand, growing labor expenses would compel Amazon to review its business strategy.
Social Factors:
changing purchasing patterns: Amazon may be able to take advantage of the potential presented by shifting consumer trends by adjusting its business practices. One, consumers in the US and other countries have started to adopt consumerism as a general trend. This presents an opportunity for the business to increase sales.
Changing consumer demographics: Amazon's operations are heavily impacted by shifting demographics. This is taken into account, in particular, with the growing Millennial consumer segment. One of the largest client groups in the world, they approach the market and buying differently. The way the Millennial generation has embraced the online buying concept is noteworthy. Their choice for smartphones and the availability of fast internet that goes along with these devices promote this change in behavior.
Technological Factors:
Customer service: Amazon needs to be aware of the role that IT plays in the provision of services. This is especially true given that the business operates primarily online. To assist deliver effective services, the business must make use of the finest advancements in internet and other IT infrastructure. Amazon also mandates that other technologies, such as AI, be taken into account when providing clients. In order to improve service delivery efficiency and reduce operating expenses, this is crucial.
Customer engagement: Amazon will need to investigate how to effectively engage its customers through technology. Be aware that customers, especially Millennials, value customer engagement highly.
Cyber security : Amazon must take into account the drawbacks of online transactions. This should concentrate on fraud-related cyber security risks. Form-jacking and skimming are two types of cybercrimes that pose a severe danger to internet business businesses
Environmental Factors:
Amazon's activities must compete with issues of sustainability. This focuses mostly on Amazon's corporate social responsibility and the environment. For instance, the business must develop procedures that encourage proper garbage disposal.
Legal Factors:
Laws in different countries: Amazon is required to abide by international law. Since the corporation has developed its significant activities in global marketplaces, this is a serious area of worry. Heavy fines could be imposed for breaking these regulations.
Labor laws: Another area where Amazon is expected to face significant legal difficulties is in the realm of labor legislation. This is due to the possibility that labor dispute-related lawsuits could cost the business a lot of money in damages and penalties.