Amazon began in 1995 as an online bookseller operating out of Jeff Bezos' garage. It has since expanded significantly, selling a wide range of products and employing sophisticated personalization techniques and partnerships to optimize the customer experience. Amazon leverages customer data and third-party sellers to offer competitive pricing and a vast selection on its platform. It has also developed tools like Mechanical Turk to branch into new areas while maintaining a focus on customers.

1. Introduction
History and Background of Amazon.com
Amazon.com
Courtesy Amazon.com
In 1995, Amazon.com sold its first book, which shipped from Jeff Bezos' garage in Seattle. In
2006, Amazon.com sells a lot more than books and has sites serving seven countries, with 21
fulfillmentcenters around the globe totaling more than 9 million square feet of warehouse
space.
The story is an e-commerce dream, and Jeff Bezos was Time magazine's Person of the Year
in 1999. The innovation and business savvy that sustains Amazon.com is legendary and, at
times, controversial: The company owns dozens of patents on e-commerce processes that
some argue should remain in the public domain. In this article, we'll find out what Amazon
does, what makes it different from other e-commerce Web sites and how its technology
infrastructure supports its multi-pronged approach to online sales.
Amazon.com Basics
Amazon.com sells lots and lots of stuff. The direct Amazon-to-buyer sales approach is really
no different from what happens at most other large, online retailers except for its range of
products. You can find beauty supplies, clothing, jewelry, gourmet food, sporting goods, pet
supplies, books, CDs, DVDs, computers, furniture, toys, garden supplies, bedding and almost
anything else you might want to buy. What makes Amazon a giant is in the details. Besides its
tremendous product range, Amazon makes every possible attempt to customize the buyer
experience.
When you arrive at the homepage, you'll find not only special offers and featured products,
but if you've been to Amazon.com before, you'll also find some recommendations just for you.
Amazon knows you by name and tries to be your personal shopper.
Web Site Image Gallery
Courtesy Amazon.com
See more web site pictures.

2. ¬ The embedded marketing techniques that Amazon employs to personalize your experience
are probably the best example of the company's overall approach to sales: Know your
customer very, very well. Customer tracking is an Amazon stronghold. If you let the Web site
stick a cookie on your hard drive, you'll find yourself on the receiving end of all sorts of
useful features that make your shopping experience pretty cool, like recommendations based
on past purchases and lists of reviews and guides written by users who purchased the products
you're looking at.
The other main feature that puts Amazon.com on another level is the multi-leveled e-
commerce strategy it employs. Amazon.com lets almost anyone sell almost anything using its
platform. You can find straight sales of merchandise sold directly by Amazon, like the books
it sold back in the mid-'90s out of Jeff Bezos' garage -- only now they're shipped from a very
big warehouse. Since 2000, you can also find goods listed by third-party sellers -- individuals,
small companies and retailers like Target and Toys 'R Us. You can find used goods,
refurbished goods and auctions. You could say that Amazon is simply the ultimate hub for
selling merchandise on the Web, except that the company has recently added a more
extroverted angle to its strategy.
Online Commerce
• eBay
• Electronic Payments
• TreeHugger.com: CleanTechStartups
In addition to the affiliate program that lets anybody post Amazon links earn a commission on
click-through sales, there's now a program that lets those affiliates (Amazon calls them
"associates") build entire Web sites based on Amazon's platform. They can literally create
mini Amazon Web sites if they want to, building on Amazon's huge database of products and
applications for their own purposes. As long as any purchases go through Amazon, you can
build a site called Amazonish.com, pull products directly from Amazon's servers, write your
own guides and recommendations and earn a cut of any sales. Amazon has become a software
developer's playground.
A) Strategy Identification
1) Existing Marketing Mix (4P‟s)
Promotional Alliances and Advertising

3. Promotional alliances and advertising were important devices employed early on by the firms
in their attempt to attract visitors. A promotional alliance is basically an advertising and
promotion contract combined with a long-run relationship. Internet allies provide links to the
firm‟s Web site and promote the firm‟s products. For example, consider Amazon.com‟s early
alliance with Yahoo!, the popular search engine firm. Yahoo! provided direct links to related
Amazon.com book titles from every Yahoo! search result. Searchers were invited to buy
books related to what they were searching for on the Web.
The main benefit of promotional activities is that more consumers become aware of the firm‟s
products and services. The cost of such activities includes transaction costs and fees that are
determined by the opportunity costs of the ally or advertising outlet. This type of investment
involves diminishing returns because marginal benefits eventually fall but marginal costs are
independent of the firm‟s actions (they are determined by the partner‟s opportunity costs).
Ample research shows that the amount of search consumers engage in after entering a market
follows an inverted U-shape over time: search tends to increase initially as consumers become
aware of different brands and then to decrease once preferences are formed (seeBettman and
Park 1980; Johnson and Russo 1984; Moorthy, Ratchford, and Talukdar 1997; Heilman,
Bowman, and Wright 2000). Thus, promotional activities such as alliances and advertising are
most useful early on in a market‟s evolution before marginal benefits diminish.
Offline Customer Service Center and Distribution Center Expansion
Offline customer service center and distribution center expansion involves leasing or
purchasing bricks-and-mortar facilities to warehouse products and handle shipping and
service. The benefit of offline customer service centerand distribution center expansion is that
more customers can be served and shipping times can be reduced. The cost of offline
expansion is determined by the opportunity costs of the facilities being purchased or leased
and theresources employed in the service effort. This type of investment involves diminishing
marginal returns for the same reason as with promotional activities: marginal benefits from
continued expansion eventually fall while the marginal costs are largely independent of the
firm‟s actions. Marginal benefits fall because, while early expansion efforts lead to large
increases in the number of customers that can be served and dramatic reductions in shipping
times, later expansion efforts have less substantial effects.
Pricing Strategy
A firm attempting to increase sales may lower prices to attract customers. However, price
reductions are easily imitated, leading to price wars that lower everyone‟s profits and provide
no one with a relative advantage. Price reductions are not easily reversed because competitors
react by lowering their own prices. Further, price reductions are usually publicized in order to
maximize their effect, and so they cannot be reversed without inducing a loss of reputation
among consumers. Economic theory strongly suggests that price competition will be a

4. problem for online retailers because they lack a critical source of product differentiation—
location. Bricks-and-mortar retailers differ by location, and game theoretic models show how
location differences allow firms to charge higher prices even when the goods sold are
identical in all other ways (Tirole 1988). In the absence of location differences, producers of
identical goods engaged in price competition obtain zero profits unless one has a cost
advantage. Partly for this reason, manufacturers often provide their retailers with local
monopolies (Carlton and Perloff 1994). The lack of location is critical in e-commercewhere
the products sold are not differentiated from those of other retailers (books, compact disks,
etc.).
Product Line Expansion and Service Improvement
One of the basic problems firms face when entering new environments is that they do not
know how consumers value the various products and service the firms can introduce. As a
result, mistakes are likely, and we should observe many initiatives that lower value. Further,
many initiatives will have little or no impact on value. These facts taken together suggest the
following testable hypothesis:
Hypothesis 4. If product line expansion and service improvement programs succeed as a
whole, success can be traced to a relatively small number of successful initiatives. Many
initiatives reduce firm value. Theory does not provide a clear guide as to what will work and
what will not, but some of the relevant factors are the following: Should the firm focus on
improving its existing products and services or expand into unrelated activities? Should the
firm partner with other firms in its efforts or go alone? Should the firm explore foreign
markets or concentrate on domestic ones? In order to address these questions, in the empirical
results presented below, I consider product line expansion and service improvement programs
that involve acquisitions and alliances separately from those that do not. Further, I treat
announcements of all types that involve foreign expansion separately.
2) Website Audit
I have mentioned Amazon many different times in previous articles and now I want to start
analyzing its strengths and weaknesses. Tackling such an e-commerce giant can be a bit
overwhelming in some respects, however it‟s necessary to look at their successes and failures
to see what should possibly be replicated in projects that come up for us as web designers.
Amazon is one of those web giants that is loved by some, hated by others, but used by all
whenever necessary. So, how does Amazon do it? What makes them such a massive,
successful presence on the web? Let‟s find out!

5. Amazon has built its business slowly and methodically (founded in 1994 and launched in
1995, posting their first profits in 2002). The original concept was simply to sell books online;
however it quickly branched out into other diverse products. In fact, many other large retail
companies now use Amazon to power and host their websites (Borders, Virgin Megastores,
Target, Sears and many more). It seems that these companies have adopted the “if you can‟t
beat „em, join „em strategy.” In a nutshell, the Amazon system works. It works so well that
Amazon.com attracts over 50 million visitors every month from just the United States alone.
Even though the Amazon website is so humongous, they create a personal feel for every user.
Every time I log in, they have suggestions for me based on my previous orders or searches.
Sometimes I think…‟how nice‟ while at other times I think, „I‟d never buy that item.‟ The
point I‟m trying to make here though is that they are engineering their site toward one
thing…THE END USER. The list of „benefits‟ offered to the customer is pretty lengthy. Yes,
all of these benefits are geared toward the goal of making money for Amazon…but isn‟t that
the reason capitalism and free enterprise exist? Yes, they are trying to make a buck…but their
approach is user friendly. Customer product reviews, shipping discounts, their own credit card
with bonuses, Amazon Prime membership, 1-Click ordering, product forums, etc. are all great
ways to get the customer involved. Amazon‟s goal isn‟t just to be a place to purchase items.
Their goal is to make it an experience…a good experience. They want it to be an experience
that people will want to be involved in over and over again.
http://www.webdesignideas.org/2008/01/14/what-makes-amazon-so-successful/

6. Amazon has become a „one stop Internet shopping destination.‟ Because of their appeal, they
now have over 900,000 associates (their term for affiliate marketing companies). Simply
put…you can buy almost anything on Amazon. You can usually get it at a reasonable price
too. With their adherence to The Long Tail economic principle, they also give people easy
access to hard to find items as well. Sometimes these are specialized products that aren‟t
available in your nearest brick and mortar store. This ability to offer people hard to locate
items simply by searching on one website is of great comfort to millions of people around the
world. “Can‟t find it at the store? Look on Amazon.” I know of several families who live in
remote areas of Alaska within the Arctic Circle who use Amazon as their grocery
store…because they don‟t have a local grocery store. They order their supplies through the
Internet and pick them up at the airport. It‟s a pretty awesome setup for them. This is just one
of many different niches that Amazon fills. The cumulative total of these small niches results
in posting revenues like the ones they posted in 2006 ($10.7 billion).

7. From the customer end of things, Amazon‟s site is simple in appearance and simple to use.
The order process is easy. This is the most critical component of their entire site. Keeping the
ordering process uncomplicated is what really makes customers return. If you were to only
use two key components of Amazon‟s site and replicate them into your own site or your next
customer‟s site, they would be customer features and simplicity in giving the customer results.
Whether those results are retail oriented or information oriented, keeping the process simple
will in the long run create happier visitors on the site. Whether you love or hate Amazon, you
have to recognize the fact that they are successful as a website. In recognizing that, look at
what you can use from their example to make the next website you design a successful one.
Amazon Tools, Marketing and Community

8. The goal is pretty straightforward: "To be Earth's most customer-centric company where
people can find and discover anything they want to buy online." The implementation is
complex, massive and dynamic. Amazon's marketing structure is a lesson in cost-efficiency
and brilliant self-promotion. Amazon's associates link to Amazon products in order to add
value to their own Web sites, sending people to Amazon to make their purchases. It costs
Amazon practically nothing. Some associates create mini-Amazons -- satellite sites that do
new things with Amazon data and send people to the mother-ship when they're ready to buy.
Amazon Light, built and maintained by software developer Alan Taylor, is one of those
satellite sites.
The Gold Box There's probably a little "Gold Box" icon at the top of the Amazon.com homepage
every time you visit. This box holds special treats for you: Time-sensitive discounts. Once you
click on the Gold Box and view an offer, you have to complete the transaction (if you want it) in a
specified time period. After that time period, the offer disappears.
The level of customer tracking at Amazon.com is another best-of-breed system. Using the data it
collects on every registered user during every visit to the Web site, Amazon points users to
products they might actually be glad to discover -- and buy. Amazon recommends products that
are:
• similar to what you're currently searching for (on-the-fly recommendations that use up tons of
processing power)
• related to what you've searched for or clicked on at any time in the past
• purchased by other people who've searched for what you're searching for or have bought what
you've bought

9. You can even customize the recommendations by giving Amazon more information about
yourself and your interests and rating the products you've already purchased.
A recent development in customer tracking actually collects information on people who
may have never visited Amazon.com. Amazon's gift-giving recommendations collect data
on the stuff you buy for other people. For instance, if you buy a toy train set in December
and ship it to your nephew, Amazon knows you give gifts to a boy aged four to 10 who
lives in Ohio and likes trains. Might your nephew enjoy the latest addition to that train
series? Might he also have an interest in RC cars? Amazon will give you all sorts of ideas
about what to get your nephew when the next holiday season rolls around.
This type of information gathering has generated a fair amount of controversy. Some say
Amazon gathers too much information for comfort, and the Electronic Privacy
Information Center reports that in 2000, Amazon started sharing its customer data with its
partners and subsidiaries. The concern has increased with the tracking of "gift-giving
habits," because the gift-giving information Amazon collects could be about minors,
which is against the law, and because the gift receivers don't even know that their name,
age, gender, location and interests may be stored in Amazon's database of customer
information.
Despite concerns about Big Brother Amazon, tons of people love the personalized
experience Amazon offers. It's not just sales offers -- there's a community on
Amazon.com that's based on people providing even more information about themselves to
other Amazon users. People write their own reviews, recommendations, "So You'd Like
To..." guides and "Listmania" lists based on Amazon's product offerings and share them
with all of Amazon.com. One Listmania list, "The Top 25 Weirdest Items You Can
Purchase Through Amazon!" by Sheila Chilcote-Collins of Van Wert, Ohio, includes a jar
of S.E.P. (Stop Eating Poop) that should make your dog stop eating its own feces; bird
feed in the form of live caterpillars shipped to your doorstep; and a book entitled "Owl
Puke" that comes complete with a genuine pellet of regurgitated owl meal. You can make
any sort of list you want, and any Amazon member can view it and rate it.

10. Beyond e-commerce and its trappings, some of the more recent Amazon endeavors have
the company branching out into new realms. Amazon's Mechanical Turk project seeks to
combine community, technology and compensation. Using the Mechanical Turk system,
software and Web developers can post tasks they need help with, usually tasks related to
things computers can't do but humans can, like quickly caption a set of photos. Anyone
can post a task, and the person who completes it gets a small amount of money in return.
Amazon gets a commission on each completed transaction. In a much more visible trek
into the unknown, Amazon has funded the A9 search engine. It has full search capabilities,
mapping functions, a toolbar with pop-up blocking and an easily accessible personal
search history. A9 also provides a "Diary" where you can makes notes to yourself about
specific Web pages and lists of recommended links for you to check out based on your
previous searches. In keeping with Amazon's omnipresent marketing techniques, you can
sign up to get an Amazon.com discount for using A9 on a regular basis, and when you
type in a search term, you'll see a display of Amazon book results related to that term.
From a "Where's Amazon going?" point of view, perhaps the most notable project is the
previously mentioned Amazon Services subsidiary. Amazon Services is building complete
e-commerce solutions for companies that are potential Amazon competitors, leaving open
the possibility that Amazon will ultimately head in the direction of technology service
over retail sales.
E-crm
eCommerce clearly changes the way companies do business. But eBusiness is more than just selling
and shopping on the Internet. eBusiness involves enhanced customer service through closer online
6 Customer Service in the eCRM Market

11. links with suppliers and trading partners. An eBusiness must synchronize a company‟s eCommerce,
customer service, and supply-chain strategies into an integrated, enterprisewide system that enables
real-time, interdepartmental access to customer data to ensure superior, personalized service to all
customers. Amazon.com is the model eCompany for personalized services. Amazon‟s software
remembers buyers‟ past selections, favorite authors, and category preferences; suggests purchases based
on those choices; and notifies consumers via e-mail when books matching their preferences are available.
Internet technology enables and even forces companies to operate more efficiently with customers
and partners, bring new products to market faster, serve customers better, and adjust ever faster to
quickly shifting market changes—and to do it all better than their competitors. To achieve all that,
eBusinesses must improve and integrate core business processes, from the customer-facing contact
center to back-office systems.
To deliver an eCRM strategy that extends front-office sales force automation functionality beyond
isolated sales, marketing, and customer support departments, an eBusiness must synchronize its
eCommerce and CRM solutions with multimedia contact centers, back-office applications, Web
servers, and a variety of other internal and third-party systems and platforms. Customer support
systems that coordinate phone, fax, e-mail, and Web-based self-service capabilities help eBusinesses
manage customer profiles, contact center information, and sales histories through each point of
customer interaction. The solutions also enable consumers to enter orders, track account status, and
solicit support via the Web as seamlessly as if they were phoning a customer service agent or meeting
face to face with a bank loan officer.
B) Environmental Analysis
1) SWOT
Amazon, a Fortune 500 company, is one of the leading online retailers in the world. The
company
offers products in various categories through its e-commerce website amazon.com and other
international websites. Leading market position in online retail format enables Amazon to
target a
larger customer base and enhance its brand image. However, exposure to internet fraud may
prove
to be unfavorable for Amazon's business and will affect both revenues and bottom line
negatively.
Strengths Weaknesses
Free shipping offers would be a challenge
in the long run
America's largest online retailer
Robust brand image enhances bargaining
power Patent infringement issues erode

12. Diversified into product lines other than stakeholder confidence
books to strengthen customer reach
Kindle builds strong presence in the eBooks
space
Opportunities Threats
Poor publicity with publishers due to the
pricing model
Acquisitions extend product line and
strengthen technical platform
Launch of Apple‟s iPad intensifies
competition
Increase in online retail sales in the US
Foreign exchange fluctuation
Strengths
America's largest online retailer
Amazon, a Fortune 500 company is also America's largest online retailer, with nearly three
times
the Internet sales revenue of the runner up, Staples, as of January 2010. The company offers
products in various categories through its e-commerce website amazon.com and other
international
websites. The online format helps Amazon to rotate its inventory rapidly and reduce its
inventory
management cost thereby offering merchandise at comparatively cheaper price. In addition,
the
online retail format enables the company to enhance customer satisfaction as it offers
customers
with broader selection and greater access to information. Leading market position in online
retail
format enables Amazon to target a larger customer base and enhance its topline.

13. Robust brand image enhances bargaining power
Weaknesses
Free shipping offers would be a challenge in the long run
Amazon‟s policy to ship products free of cost would result in fluctuating gross margin for the
company.
In addition, Amazon (through its Amazon Prime program) offers unlimited shipping to its
customer
at a fixed minimal charge per certain period. Despite an increase in fuel and shipping costs the
company continued with its old pricing and offers. Though free shipping is a major
competitive
advantage for Amazon, reliance on low or free shipping to strengthen business could be a
major
challenge for the company in the long run.
Patent infringement issues erode stakeholder confidence
The company is currently involved in various patent infringement cases. For instance, in
September
2009, SpeedTrack filed a complaint against the company for patent infringement in the United
States
District Court for the Northern District of California. The complaint alleges, among other
things, that
Amazon‟s website technology infringes a patent owned by SpeedTrack. Most recently in
December
2009, Nazomi Communications filed a complaint against Amazon for patent infringement in
the
United States District Court for the Eastern District of Texas. The complaint alleges, among
other
things, that the processor core in Kindle 2 device infringes two patents owned by Nazomi.
Also in the past, the company has been controversial for its alleged use of patents. The "1-
click

14. patent" is perhaps the best-known example of this. Amazon's use of the one-click patent
against
competitor Barnes and Noble's website led the Free Software Foundation to announce a
boycott of
Amazon in December 1999. The boycott, an outcome of eroding stakeholder confidence, was
discontinued in September 2002. Patent infringement cases have affected Amazon‟s brand
image
in the past and may further harm its brand equity in the future.
Opportunities
Acquisitions extend product line and strengthen technical platform
Amazon has expanded its business operation and product offering through various
acquisitions. In
November 2009, Amazon completed the acquisition of Zappos.com, an online apparel,
footwear
and accessories retailer. This acquisition will enable Amazon tap into internet sales of apparel,
the
largest online-shopping category and one in which Amazon has had limited success in the
past.
Later, in February 2010, the company acquired Touchco, a touch screen technology company.
Amazon will merge Touchco‟s technology and staff members into its Kindle hardware
division. This
acquisition would expand Amazon‟s platform to encompass more functionality and more
content on
Kindle. It will also help Amazon address some of the form-factor issues with the Kindle.
These
acquisitions are likely to add new customers and complement Amazon's existing product
portfolio.
Increase in online retail sales in the US
Although the US retail sales have been heavily hit by the economic turmoil, the online retail
sales

15. recorded a growth rate of 11% in 2009 compared to 2.5% for all retail sales. Consumers are
prioritizing
price over other criteria for selecting products. According to industry sources, online sales in
the USare expected to at a compound annual growth rate, CAGR (2009-2014) of 10% to
reach $250 billion,
up from $155 billion in 2009.
Among the online retail sales categories, the eBook market is witnessing strong growth.
According
to Association of American Publishers, revenues made from eBook sale increased from $25.2
million
in 2006 to $169.5 million in 2009. The reasons for the growing popularity of eBooks include
the
proliferation of exciting new e-reading devices; screen reading rivaling paper; content
selection; free
eBooks as the gateway drug; lower prices; and great selection. The US wholesale eBook sales
for
January 2010 were $31.9 million, up 261% from the same month a year earlier. Further, it is
estimated
that eBooks would account for 6-8% of the total US book sales in 2010 up from 3.1% in 2009.
Amazon is a leading player in the online retail format, deriving about 52.3% of its revenues
from
North America. The projected growth in the online retail sales and the eBook market in the
US
provide an opportunity for the company to capitalize on consumer demand.
Threats
Poor publicity with publishers due to the pricing model
Publishers' relationships with Amazon have been strained due to Amazon’s pricing model. Publishers
and others have been concerned about Amazon’s policy of pricing eBooks at $9.99, regardless of
the price tag publishers put on them. Amazon takes a loss on some books at that price, and the
publishers fear that if the $9.99 tag continues, Amazon will force publishers to lower their wholesale
prices, cutting into their profits. As a result, publishers are withholding their titles from Amazon
because of its pricing model. For instance, in January 2010, Macmillan announced that unless
Amazon sets the price of new e-books to $15, the publisher will not distribute new books to Amazon

16. when they are released. In response, Amazon banned titles, both paper and digital, published by
Macmillan by refusing to directly sell them. But now Amazon is forced to give into Macmillan’s
demands because of the publisher’s monopoly over its titles. Following this, pressure from other
publishers is also growing. Amazon’s strained relationship with its publishers will not only affect the
company’s bargaining power but also impact its topline as revenues from the eBooks segment forms
a major part of Amazon’s business.
Launch of Apple’s iPad intensifies competition
Apple’s entry into the eBooks market through the launch of iPad in April 2010 poses a threat to the
growth outlook for Amazon’s core book franchise and the future of the company’s Kindle device.
The Kindle starts at $259 and is designed mainly for reading text on a gray-and-black screen. The
iPad starts at $499, but with the higher price comes more functions: a color touch screen for
downloading books from Apple's new iBookstore, surfing the Web, playing videos and games and
more.
Furthermore, the iPad gives publishers an opportunity for a new agency pricing model. Apple has
asked publishers to set higher e-book price points for best sellers at $14.99. Book publishers are
pushing back on Amazon’s $9.99 pricing now that they can sell the same eBooks on the iPad for
$14.99. Five of the six major publishers signed up for the Apple pricing model, including: Penguin,
Harper Collins, Simon & Schuster, MacMillan, and Hachette.
Apple’s entry into eBooks through iPad is clearly changing the competitive landscape and would
adversely impact Amazon’s dominant position in the eBooks market.
Foreign exchange fluctuation
Amazon derives a significant amount of sales from its international operations. In FY2009, the
company's international segment accounted for 47.7% of the total revenue. Net sales and related
expenses generated from the international websites are denominated in the functional currencies
(local currency) of the corresponding websites and primarily include Euros, British Pounds, and
Japanese Yen. These internationally-focused websites are exposed to foreign exchange rate
fluctuations. Due to this the company's consolidated revenues might record significant gains or
losses on the re-measurement of intercompany balances. For instance, as a result of fluctuations
in foreign exchange rates during 2009, revenues of the international segment decreased $174 million
in comparison with the prior year. Fluctuation in foreign currency rates would affect Amazon's financial
planning process.
Amazon.
2) PEST
AMAZON.COM ANALYSIS: POLITICAL, ECONOMICAL, SOCIAL AND
TECHNOLOGICAL
PEST Analysis is a simple but important and widely-used tool that helps you understand
the big picture of the political, economical, socio-Cultural and technological issues that
we are operating in. PEST is used by business leaders worldwide to build their vision of
the future.
POLITICAL
International policies: International policies in particular countries may interfere with the
expected growth of the company for example; google.com has been banned in China for
governmental decision arguing that Google threatens the community and national market
with inappropriate contents in his data bases. In addition, Google has lost potential market,
as China could be, due to political decisions.

17. Regulations: safety above e-commerce is not considered as an important issue in various
countries for example, 76% of internet users in Peru do not trust internet web pages and
never have experienced a purchase online, a survey conceded by “EL TIEMPO” (national
newspaper in Peru) conclude that internet users do not believe online contents and in some
cases such as internet crime, one cannot attend to legal authorities into the field because
those do not exist.
ECONOMICAL
Currency fluctuations: in various countries where currencies are highly devaluated in
comparison with the dollar, it may bring additional costs to the company. Furthermore
some products‟ prices may be increase, affecting the main attraction of the company
(lowest prices).
Economical tendencies: in most cases, individuals rather buy in their neighbourhood
stores, than going online. Customers prefer doing the regular commercial process of going
to the store, paying the product and getting it instantly than going online, processing their
bank details and waiting for several days to obtain the item.
SOCIAL
Ethical and religious factors: In some cultures Internet use is not allowed due to the fact
that at some point contents may damage their cultural, ethical and social believes.
TECHNOLOGICAL
Amazon.com is a company highly involved into the technologically field, and its success
has been well achieved over the past six years, although many challenges face Amazon in
the fast paced environment of the Internet hence, amazon.com has to face this challenge,
finding innovative ways to stay ahead of their competitors.