PESTEL analysis is the technique where political, economic, socio-cultural, technological, environmental, and legal factors are evaluated to identify external forces that impact market’s growth or decline. Assessment of the external environment helps to recognize key drivers and create a development strategy for the company. Political Factor International regulations are slowing Amazon’s expansion. Some countries’ regulations limit possibilities of internet purchases. However, internet providers bring faster and more affordable internet to more consumers which enable more consumers to shop at Amazon. Often, the company under analysis needs help of national governments to launch its authorized countywide websites and receive benefits in regard to taxation. In less internet penetrated open countries, besides direct investments, Amazon requires assistance of local authorities to develop the demand for e-commerce to a significant level. An online global retailer can expand its operations to closed countries through strengthening political relationships and trade pacts. In new countries, Amazon needs either pre-determined national priority supporting the e-market development or strong governmental lobbying of internet-based industry to increase the governmental capacity to earn. In some instances, the corporation needs local political hierarchies to relax cultural or religious ideologies for facilitating conditions friendly to the e-commerce development. Economic Element Since the company deals in US dollars, fluctuations of currency can cause issues when selling via the internet. Currently, global economy is improving, and internet sales are expected to grow. When the economy suffers downfalls, online retail sales are one area that e... ... middle of paper ... ...8) Development of new marketing tools, such as commission for referrals, discounted and free shipping, and promotional offers. f References Krishnamurthy, S. (2004). A comparative analysis of eBay and Amazon [PDF file]. Retrieved from http://faculty.washington.edu/sandeep/d/amazonebay.pdf Marcus, J. (2004). Amazonia. Five years at the epicenter of a dot-com juggernaut. New York, NY: New Press. Mirov, M. (2005). Seminar paper on strategies to achieve market leadership: The example of Amazon [PDF document]. Retrieved from http://preibusch.de/documents/PreibuschS_FleckensteinM_Amazon.pdf Wong, T. (2009). Exploratory data analysis of Amazon.com book reviews [PDF document]. (Thesis submitted in the fulfillment of the requirements for the degree of honors in statistics). Retrieved from http://www.stat.berkeley.edu/~aldous/Research/Ugrad/Timothy.Thesis.pd
History”, n.d.). But the unbelievable pace at which Amazon added new products and new customers proved to be a formidable barrier for any competitors. Within the first 10 years Amazon accomplished an unbelievable feat; it had 49 million customers and 6.9 billion dollars in revenue, and it had done so by selling some products at a loss to build market share (Rivlin, 2005). At times it was difficult leveraging so much capital to grow market share, but Jeff Bezos’ focus on the customer and long term growth of the company proved to be the real reason Amazon didn’t fall prey to the .com bust like so many other internet
Amazon.com’s US operation business model is based on “sell all, carry few”. Amazon offers consumers a wide selection of products while keeping inventories at low levels. A major interest for Amazon in the US is optimization of netwo...
Key Issues The growing popularity of online retailing is attracting competition from traditional and online multi-retailers such as Wal-Mart and Amazon, which are gaining considerable market shares in many of the product segments included in the specialty retail sector. Currently, the majority of revenue is generated by store sales, but online sales from the stores’ websites are increasing. With the US dollar getting weaker, international sales from these US based websites are increasing too. This creates a significant positive outlook for the large incumbent players but also acts as a significant barrier of entry for new players.
Treanor, T.. (2010). Amazon: Love Them? Hate Them? Let's Follow the Money. Publishing Research Quarterly, 26(2), 119-128. Retrieved February 24, 2012, from ABI/INFORM Trade & Industry. (Document ID: 2377177581).
Amazon’s macro-environment is made up of six external factors: political, economic, environmental, technological, social, and legal conditions. These factors are important because they shape how the company operates and you must know each piece to be able to compete within the retail and eCommerce industry. An evolving political factor are the efforts the government has made toward punishing offenders of cyber-crime. This kind of thief wasn’t walking into your store, but hacking into your computer. This type of crime wasn’t possible before the internet. The government has started to take these crimes more serious as technology evolves. Technology is a factor that Amazon.com must invest heavily in. They are reliant on having top of the line technology to survive against cyber-crime and to stay relevant in the tech world. ECommerce is everywhere now and competition is very high. This brings in legal conditions; Amazon must know what laws exist in which countries because they are a
Amazon.com is one of the largest e-commerce companies in the world. Although the primary product line was books at first, the company rapidly diversified into a host of other product
Amazon was founded in 1994 in Seattle, Washington, and since then they have grown into the world’s largest online retail business. Amazon concentrates on long term goals to succeed, such as providing goods to the public at fair prices, offering businesses an online outlet to sell products, along with video streaming, cloud storage, and an innovative drone delivery service. After operating for nearly twenty years, Amazon has proven that an online retail business can be successful. Recently there have been observations of whether Amazon is steadily keeping up with the fast pace of the online retail industry, or if they have hit their peak of innovation and will slowly dwindle away. A financial analysis of Amazon can prove that they are steadily keeping up in the fast paced online retail industry and that their long term goals are indicative to their new innovations.
Launched by Jeff Bezos, the Amazon.com website started in 1995 and is today considered as one of the most prominent retail website on the internet with a record turnover of US$ 14.87 billion in 2007. Jeff Bezos’s intention was to create an internet based company with the most dedicated product portfolio on the internet where customers could find anything they might want. Amazon’s success is based on technology, services and products (Jens et al., 2003).
As recently as August 1999, the Boston Consulting Group stated that on-line retailing in Latin America will reach $77 million in 1999. This figure represents web sales earned by Latin American based e-tailers. The same report states that an additional $90 million in revenues will be earned by U.S.-based online merchants this year. This results in a total of $167 million in domestic and international ecommerce r...
Amazon.com, as an e-commerce website has emerged as a leader in the e-business world. Originally, the company began as a website that sold books at discount prices, now Amazon.com has evolved into a marketplace for the world. Jeff Bezos, the founder and CEO, has changed the business model of the company many times. He is focused on expanding the selection of goods and services offered on the website, in an attempt to please customers. However, he is having trouble managing the priorities of his gigantic company, he should give the existing categories priority and worry about expansion at a later time.
Amazon.com was a venture into an emerging market of internet and had to face hidden and unexpected hurdles in order to survive and excel in the market. Therefore, Amazon.com kept modifying its strategies with their focus on enhancing customer experience of online shopping and to delivery exceptional services with complete convenience to their customers. One of the major strategic decisions was to compromise on cost saving stragegy when Amazon.com started to maintain its own warehouses in different countries in order to ensure timely and accurate delivery to their customers
Amazon’s customer philosophy can be traced from a letter extracted to the 1997 Annual Report that stated their focal points by offering customers products that they think is worth buying. Amazon tries to set apart their operations by suggesting extraordinary way in doing transaction and start by offering online books whereby they can get access to it anytime they want. Other value-added offers include 1-ClickSM shopping, customer’s gift certificates and immensely reviews, browsing options, content and suggested features. Amazon strategy focuses on reducing the price. Thus, increase the customer value. Amazon became the market online bookselling leader by encouraging customers repeating purchases through the advertising strategy that is proven effective which was word of mouth approach.
Amazon is best known for their kindle, fast shipping, and selling various products (Smith). With Amazon being such a large corporation, professionalism, academics, character, and engagement are crucial parts of the success of the company. Professionalism: Amazon has grown to become the largest internet-based retailer in the world by total sales. It began as primarily an online bookstore and soon began to sell more and more electronics and then over time began to sell pretty much anything. In 1998, Amazon earned about $0.6 billion, which held steady growth from 1998-2006 (“Amazon.com”).
Amazon has recorded a magnificent success in its business throughout the years that it has been in operation. It has attracted almost all people to use it when necessary. Amazon has built its success in business methodically and slowly. Amazon has made much success because of its ability to read market trends and diversify its operations. It started as an online book selling company. However, it changed its operations and started selling other products. Currently, many large retail shops use Amazon to host and power their websites, for instance, sears and virgin megastores. Amazon now attracts over fifty million visitors in a period of one month. Amazon has tried to make their services fit each individual user. It has based its services on the end user. It has shipping discounts, customer product reviews and a credit card with bonuses. It also has prime membership, product forums and 1-click ordering system among other services. The company has tried to make a remarkable experience for customers and visitors (Thomas, 2006).
Firstly, Amazon.com employed the cost leadership strategy by offering products and services at lower costs than competitors. The key to making this strategy successful were the economies of scale that allowed the company to offer the largest range of products to its customers.