The PESTLE Analysis Of Amazon

Improved Essays
Amazon is currently the largest firm in the online retail market (Greenspan, 2017). Given the dynamic and fast paced nature of the industry, it is essential that Amazon maintain a high level of resilience and innovation as well as take into consideration and address multiple macroenvironmental factors to stay ahead. To assess how well the company is adapting to different conditions we can use a tool called the PESTLE analysis model. The acronym PESTEL stands for “Political, Economic, Social, Technological, Environmental and Legal Factors” (PESTEL, n.d) and is a tool used to identify the factors that shape a company’s environment.
Political
This aspect of the model takes into account whatever government influences may affect the company. Some
…show more content…
Amazon.com Inc. must deal with the pressure to remain on the cutting edge of technology. Rapid technological obsolescence and the creation of destructive technologies creates an environment where Amazon must constantly evolve and improve the technological aspects of the company. Although this can be expensive and does pose some threat to the company it also creates an opportunity as to survive in its environment the business’ operations will be optimised which can help keep them ahead of the competition. Regarding staying ahead of the competition there is also opportunities for Amazon to increase its overall performance by utilising the increase of IT efficiency. More efficient IT systems can lead to reduced costs which will in turn lead to increased revenue for the company. Another negative factor affecting Amazon as an online retail company is the threat of cybercrime. Cybercrime can affect the integrity of the company and, perhaps even more threatening to the company, it can cause customers to have a negative experience which could lead to them abandoning the online retailer all together and this will ultimately lead to a fall in revenue. To avoid this Amazon is forced to make very large investments in its security measures against cybercrime or risk not being able to survive in the

Related Documents

  • Improved Essays

    Aldi Executive Summary

    • 789 Words
    • 4 Pages

    Throughout their existence, Aldi has positioned itself in a way that when properly utilized, has allowed them to continue to develop on an international level and succeed through various external opportunities. Firstly, they have the opportunity to evolve their corporate strategy and adopt a more organic structure. Currently, they are very rigid and mechanistic, stuck in the past and not knowing of how to adapt to the present. To begin, they must change their policies to make Aldi a more outsider friendly corporation. As seen in Exhibit 4 below, Aldi’s operating practices for number 18, 19, and 20 describe just how closed off the company is to outsiders.…

    • 789 Words
    • 4 Pages
    Improved Essays
  • Great Essays

    INTRODUCTION In considering the macro-environment, the importance of analysing the factors that can have an effect or influence the demand and supply of an organisation must be put into application (Kotter and Schlesinger, 1991). According to Dr. Paul (2014) “A PEST/PESTEL analysis is a framework or tool used by marketers to analyse and monitor the macro-environmental factors that have an impact on an organisation”. The PESTEL factors are those components that make up the macro-environment. These factors include political, economic, social, technological, environmental and legal factors.…

    • 1345 Words
    • 6 Pages
    Great Essays
  • Improved Essays

    As a top executive of Endless Imagination Book, Inc., I noticed that internet retailers, such as Amazon, is causing my consumer base to decline drastically. So, I hired a business consultant to present me with ideals to maintain and grow my customer base. I understand that social and technology factors are controlling business success. Some people don’t find value in visiting the bookstore to sit down and read, rent books, or purchase books when there are ways to stay at home and have the same access. So, there are a few changes that I will embrace to become successful.…

    • 358 Words
    • 2 Pages
    Improved Essays
  • Decent Essays

    P3: Explain the potential risks to an organization of committing to an e-commerce system Risks 1. Hacking In computer interacting, hacking is any technical effort to operate the normal performance of network links and connected systems. A hacker is any person engaged in hacking. Today, however, hacking and hackers are most commonly associated with malicious programming attacks on the Internet and other networks.…

    • 1208 Words
    • 5 Pages
    Decent Essays
  • Decent Essays

    Best Buy is a company that has changed majorly with the revolution of the online world. Most standard stores have switched to marketing online shopping as a bigger part of their market than previously. This has drastically changed how the finance function. The past three years of financial data for Best buy show a trend on how the online market has changed its business structure. In 2014, 2015, and 2016 respectively the total revenue has been $40,611,000, $40,339,000, and $39,529,000.…

    • 369 Words
    • 2 Pages
    Decent Essays
  • Improved Essays

    The framework studies and analyzes six different factors, including political, economic, sociocultural, ecological and legal forces. It helps businesses in identifying and analyzing external factors that influence the…

    • 1120 Words
    • 5 Pages
    Improved Essays
  • Superior Essays

    Macroecinomic Changes in economy and technology influence retail business just as they do other industries. Some of these changes have transformed the future of the retail industry. Current economic growth means a good retail environment. However, recent economic downfall had a very negative impact on the retail industry, as a result it will take a long time to return to the rapid growth the industry had before recession. On the other hand, recovering economy will stimulate consumer spending.…

    • 1442 Words
    • 6 Pages
    Superior Essays
  • Decent Essays

    The example of an internet retailer such as Bikes.com is a good example of the type of firm that must pay close attention to executional cost drivers. The reason is that its success depends on customer service – prompt response to customer requests, and prompt and accurate filling of customer orders. Customer loyalty is a key success factor for a firm such as this, and loyalty comes from superior customer service in all its dimensions. Amazon.com introduced the successful internet retailing business model, and has built a successful business on the basis of customer loyalty. This is the approach Bikes.com needs to follow – and this means execution, execution, execution.…

    • 305 Words
    • 2 Pages
    Decent Essays
  • Great Essays

    Mirov, M. (2005). Seminar paper on strategies to achieve market leadership: The example of Amazon [PDF file]. (Unpublished paper). Technical University, Berlin.…

    • 1443 Words
    • 6 Pages
    • 5 Works Cited
    Great Essays
  • Improved Essays

    A situational analysis is used to identify a company strength and weakness. This process help a company understand the business and their customers. It identifies the internal and external threats the may prohibit a business performance. La-Natural is developing company and situational analysis will be essential to company success. La-Natural is a new company establishing its brand in the skin cares industry.…

    • 1785 Words
    • 7 Pages
    Improved Essays
  • Great Essays

    • Amazon uses Low-cost leadership strategy by providing lower price than other online retailer. • Amazon also uses supplier intimacy strategy and strengthen customer, to attract new customers and keep existing customer happy. • Its shipping price is less than Walmart which is around…

    • 927 Words
    • 4 Pages
    Great Essays
  • Great Essays

    With its own fleet of cargo jets, delivery trucks and others, Amazon can offer its prime members same-day delivery. However, by insourcing its fulfilment and distribution, it is actually incurring a very high expense which directly contribute towards its low profitability. Besides, Amazon also have another competitive advantage over its rivals in that it is practically a company which has everything linked up together. In other words, Amazon produces and sell a wide range of products ranging from e-books to fashion and apparel, Amazon (Echo) Alexa, music, video-on-demand and most importantly, the Kindle.…

    • 1187 Words
    • 5 Pages
    Great Essays
  • Superior Essays

    Ebay Case Analysis

    • 1652 Words
    • 7 Pages

    Before we analyse eBay’s source of competitive advantage, it is crucial for us to use Porter’s five-forces model of industry competition to examine eBay’s external environment forces that are affecting its profitability (Dess et al., 2014, chapter 2). These five forces are as follows: 1. The threat of new entrants 2. The bargaining power of buyers 3. The bargaining power of suppliers 4.…

    • 1652 Words
    • 7 Pages
    Superior Essays
  • Improved Essays

    Ever since it was established in the late 1990s, it has grown into such a wide world corporation (Kantor). However, you might wonder about the function of this corporation. Two articles called “Inside Amazon: Wrestling Big Ideas in a Bruising Workplace” and “Entering and Leaving” is able to give readers some information that can relate to Amazon. Both articles also provide useful insights on how an organization is functioning, as it can relate to my personal experience, a specific life event, and to a song.…

    • 970 Words
    • 4 Pages
    Improved Essays
  • Improved Essays

    INTRODUCTION Business Environment includes Micro and Macro Environment. The External factors includes the economic factors; demographics; legal, political, and social conditions; technological changes; and natural forces (Businessdictionary.com, 2017). Micro environment of business includes competitors, customers, suppliers, Public, marketing intermediaries, workers and their union. The micro environment of the organisation consists of those elements which are controllable by the management (Yourarticlelibrary.com, 2016). P4: Identify the positive and negative impacts the macro environment has upon business operations, supported by specific examples.…

    • 1067 Words
    • 5 Pages
    Improved Essays