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Presentation on Amazon
The document discusses Amazon's international business strategies and decisions. It analyzes Amazon using several frameworks: 1. PESTLE analysis identifies political, economic, social, technological, environmental, and legal factors affecting Amazon globally. 2. Porter's Five Forces examines competition, new entrants, suppliers, customers, and substitutes in Amazon's market. 3. SWOT analysis evaluates Amazon's strengths (e.g. leadership), weaknesses (e.g. free shipping risks), opportunities (e.g. online payments), and threats (e.g. hacking). 4. TOWS analysis suggests strategies like partnerships to leverage strengths/opportunities and address weaknesses/threats. The
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Presentation on Amazon
- 1. . Name: Pranta Ray Departmentof Business Administration Shahjalal University Of Science & Technology
- 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
- 3. International strategic BusinessDecision
- 4. Amazon’s international strategicbusiness decision • Similar customer needs • Global customers • Transferable marketing: Market drives Cost Drivers • Scale economies • Country-specific differences • Favorable logistics
- 5. Amazon’s international strategicbusiness 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 ForAmazon • Political stability in advanced societies. • Political lobbying. • Government red tapes. Political Economic • Economic growth. • Currency exchange rates. • Taxation. • Employment.
- 8. PESTLE Analysis ForAmazon • Changing purchasing patterns. • Changing consumer demographics. Social Technological • Customer service. • Customer engagement. • Cyber security.
- 9. PESTLE Analysis ForAmazon • Ecological management. • Sustainable operations. Environmental Legal • Laws in different countries. • Labor laws.
- 10. The evaluation ofthe 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 ofthe 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 ofthe 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 ofthe 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 ofthe 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 analysisis 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 ofAmazon 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 ofAmazon 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 ofAmazon • 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 ofAmazon • 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 ofthe 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 ofthe 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 ofthe 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 ofthe 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.
- 25.
Editor's Notes
- #5 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.
- #6 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.
- #8 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.
- #9 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
- #10 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.