Strategy Formulation, Implementation and Evaluation (Essay Sample)

Global Strategy Analysis. The External and Internal Environments
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Global Strategy Analysis. The External and Internal Environments
PESTEL Analysis for Amazon.com
In this paper, the focus will be on Amazon.com, which is an American based electronic store with headquarters in Seattle, Washington. Along with its vast investment into electronics, Amazon.com has also grown into a reputable cloud computing company, whose success of Amazon can be attributed to its own internal and external operations, policies, and management. To adequately analyze the company’s macro external environment, the PESTEL technique will be used (Martin, 2014).
Over a couple of years, Amazon has been growing exponentially and even expanded its services beyond the United States of America. The company’s CEO, Boaz, has also been a contributory factor with his focus to explore new markets, such as Asia. Amazon is an e-commerce investment and similar to other investments; operating in a politically diverse environment is a challenge. As the company plans to open up its operations to the Asian markets, political challenges are inevitable. Red Tape and regulatory trends in the Asian market pose a challenge to the company, and the company’s operations will most probably be affected.
Furthermore, the economic factors are likely to affect its operations and market share. In some of the countries where Amazon wants to invest in, there exists the challenge of weak economies, meaning a lower product demand and, thus, little sales made by the company. There is a worrying trend in the Asian countries - investments are low - something that is likely to affect e-commerce ventures. Along with the Asian markets, other countries seem to have thriving economies with the target groups in these countries providing a potential customer base for Amazon. All in all, stable economies have a positive contribution to e-commerce ventures and have given Amazon.com a competitive advantage over its competitors.
Amazon’s Industry Analysis: New Entrants and Related Threats
There have been an increasing number of e-commerce platforms all over the world. Organizations and businesses are opening up to the new business opportunity, and customers are also shifting their preferences towards online shopping. The new e-commerce ventures, as well as the previously existing ones, are a threat to Amazon. New entrants into the market, such as Forever 21, Home Depot, Barnes, and Noble among others, are growing fast, taking up a substantial market share and proving to be a threat to Amazon.
The same competitors and new entrants into the e-commerce market are venturing in substitute and products similar to what Amazon is offering. Some of these stores have even reduced the prices of their substitute goods, all in a bid to attract more shoppers. For instance, E-Bay offers electronics, similar and rebranded, at a lower price as compared to those offered by Amazon.
Current Competition
In the E-commerce business, E-Bay is a major competitor of Amazon. They are a large online store; and it is within their goals and objectives to overthrow Amazon. The CEO of E-Bay says that they are aiming at changing their tactics in a move to fight the giant (Rao, 2016). There is the move to rebrand E-Bay as a retailer store instead of an investment into technology. Thus, there is the need for Amazon to move up with speed, establish its market, and try to stay relevant to the current competition.
The Buyers and Suppliers for Amazon
Buyers are the target group for Amazon, and suppliers provide the products and services. In any market share, the customers are the fundamental priority, as they hold the purchasing power because the reputation of the company is based on the feedbacks of the buyers. With the current statistics, Amazon enjoys a diversified customer base with a ridiculously high purchasing power. Thus, due to their base, the company has gained a competitive edge and starts expanding to new markets with the hope that it will mean more expansion and profit. The power that they possess, their purchasing capacities, and control over the decisions made by the company are expected to increase even further. With new markets, there is the need for new suppliers since they help determine supply patterns in the organization, and the latter are going to increase a notch higher.
Key Success Factors of Amazon
The success story of Amazon is based on both internal and external factors (Uzair, n.d.). It all starts with the management, all the way to the customer base, technology infrastructure, and operational policies. One of the factors that have indeed contributed to the success story of Amazon is the emergent of new markets, such as those in Asia. They have provided a new investment platform for Amazon (Pratap, 2017) and enabled the globalization dream for the company to become a reality. Thus, the organization has tapped into the opportunity and expanded beyond its borders.
The Opportunities and Threats
Currently, Amazon has the opportunity to grow on a global scale, but it is not without a myriad of threats. In a mixed-up list, the following are some of...