Pestle Analysis Of Amazon

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Recommended: Competitive strategy of amazon

Using appropriate theories/tools/models covered on the module:
Critically examine Amazon’s strategic positioning on the European market. Assess or evaluate the extent to which value innovations contributed to Amazon’s success as a global player

To examine the Amazon’s strategic positioning on the European market is used the PESTEL analysis model. PESTEL comprises of 6 factors which are Political, Economical, Social, Technological, Environmental and Legal factors.
Amazon’s political factors are that in the European Union, the competitive rivalry is comfortable in comparison to other industries which are harsher in its rivalries. This competition enabled Amazon to support the acquiring and allying of companies in attaining and improving their technology even further. An example of this is identified by Stockport (2009), when Amazon acquired Reflexive Entertainment which is a game developer and distributor. This helped Reflexive target a wider range of consumers through Amazon’s distribution channel. This as a result has led Amazon to expand into new markets (Stockport , 2009) .
An economical factor that Amazon has to deal with is that consumers usually want to purchase goods and services in their local stores as they are accessible, other than online shopping. This is because they would rather get their product instantaneously when it’s in stock, than buying that particular product online and having to wait for a standard 3-5 working days for it. Also the foreign exchange fluctuations can cause problems as there are different currencies in the European market which weigh against the US dollar (Stockport, 2009), which can diminish their pricing strategy and bring on further costs.
Amazon’s social factors are that currently the ...

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...take over the tablets market and gain a competitive advantage over its rivals. Since e-books and tablets are associated to the Kindle, Amazon has the ability to provide even more awareness to other target markets (Amazon, 2012).
There is a weakness in that there is a risk of foreign exchange fluctuations. In 2011, Amazon made international total revenue of 44.5%. Evidently in the European and Asian market they have a different currency compared to the US dollars, so they are taking control of their currencies in each of these areas. This means that the cash equivalents and marketable securities could lose its balance if the US dollars aren’t stronger than the other currencies. It can cause a chink in the armour of Amazon’s revenues and profits if they are unable to control these fluctuations, which could result in presenting a noteworthy loss of money (Amazon, 2012)

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