SWOT & PESTLE

ANALYSIS

OF
INTRODUCTION :

Jeff Bezos founded AMAZON.COM, INC. is an

American-based Multinational electronic commerce company
in 1994 and launched it online in 1995. It started as an online
bookstore with 2.5 million titles, it became the “Earth’s Biggest
Bookstore”.
Headquartered – Seattle, Washington.

PRODUCTS :

 Books
 Movie, Music & games
 Digital Download
 Computer &Office
 Electronics
 Home & Garden
 Grocery, Health & Beauty
 Toys, Kids & Baby products
 Clothing, Shoes & Jewelry
 Sports & Outdoors
 Tools, Auto & Industrial
SWOT ANALYSIS AMAZON :
Amazon.com Inc.’s position as a leading firm in the online retail
industry indicates success in addressing the issues shown in this
SWOT analysis of the business. The SWOT Analysis model
involves an internal analysis that identifies the strengths and
weaknesses (internal strategic factors), and an external analysis
that identifies the threats and opportunities (external strategic
factors) relevant to the e-commerce business.

Amazon’s Strengths (Internal Factors)

Amazon.com Inc.’s e-commerce success relies on the effective

use of business strengths. In the SWOT Analysis framework, this
aspect enumerates the internal strategic factors that the
company uses to maintain and improve its operations in the
online retail, technology products, and online services markets.
The following strengths support the success and continuous
growth of Amazon:
 Strong brand
 Moderate and expanding business diversification
 High capability for rapid technological innovation,
especially in online services
Amazon’s Weaknesses (Internal Factors)

Amazon’s weaknesses present challenges that limit its business

growth and expansion. This aspect of the SWOT Analysis model
outlines the internal strategic factors that impose difficulties in
growing or improving the business. In this case of Amazon, the
following weaknesses are most significant:
 Imitable business model
 Limited penetration in developing markets
 Limited brick-and-mortar presence

Amazon’s Opportunities (External Factors)

There are various opportunities to improve Amazon’s business

performance and service quality. In the SWOT Analysis model,
this aspect identifies the external factors that the company can
use to enhance its business, such as through growth in the
international e-commerce market. In this case, Amazon has the
following opportunities:
 Expansion in developing markets
 Expansion of brick-and-mortar business operations
 New partnerships with other firms, especially in
developing markets
Amazon’s Threats (External Factors)

Amazon experiences various threats corresponding to its

operations in different industries and markets. External factors
that reduce or limit business development and performance,
such as in e-commerce operations, are considered in this aspect
of the SWOT Analysis model. Amazon.com Inc. must address
the following threats in its industry environment:
 Aggressive competition with online and non-online firms
 Cybercrime
 Imitation of business model and products.

PESTLE ANALYSIS AMAZON :

The Pestle analysis model is a strategic management tool for

identifying the external factors (political, economic,
sociological, technological, legal & Environmental ) that shape
the conditions of the remote or macro-environment, which in
this case is that of the e-commerce enterprise.
Political Factors :

Amazon.com Inc. operates alongside political influence. This

aspect of the Pestle analysis model focuses on governmental
activity and its effects on businesses and their remote or
macro-environment. In Amazon’s case, the following political
external factors are important in the development of the e-
commerce industry:

 Political stability of developed countries, especially the

U.S.A. and European countries.
 Governmental support for e-commerce.
 Increasing governmental efforts on cyber-security.

Economic Factors:

Amazon’s performance depends on the situation of the

economies where it operates its online and non-online
businesses. The effects of economic trends and changes on the
remote or macro-environment are considered in this aspect of
the Pestle analysis model. In the case of Amazon.com Inc., the
following economic external factors are significant:

 Economic stability of developed markets, especially the

U.S. and European countries.
 Increasing disposable incomes in developing countries.
 Potential economic recession of China.

Sociological Factors :

Social conditions are a determinant of Amazon.com Inc. This

aspect of the Pestle analysis model identifies the impact of
sociological changes or trends on the company’s performance
as a leading online retailer and provider of information
technology goods and services. Considering such trends in the
remote or macro-environment, Amazon faces the following
sociological external factors:

 Increasing wealth disparity.

 Increasing consumerism in developing countries.
 Increasing online buying habits.
Technological Factors:

Technological advancement directly affects Amazon,

considering the centrality of technology in its business. The
consequences of technologies and related trends on the
remote or macro-environment are covered in this aspect of the
pestle analysis of the e-commerce company. The technological
external factors important in Amazon.com Inc.’s business are as
follows:

 Rapid technological obsolescence.

 Increasing efficiencies of IT resources.
 Increasing rates of cybercrime.

Legal Factors:

Amazon.com Inc.’s e-commerce operations must adhere

to legal requirements. The effects of regulations on the
remote or macro-environment are determined in this
aspect of the Pestle analysis model. In Amazon’s case, the
following legal external factors are significant:
  Rising product regulation.
 Changing import and export regulations.
 Rising environmental protection regulations on businesses.

Environmental Factors:

Even though Amazon.com Inc. is mainly an online business, its

operations are subject to the influence of the natural
environment. This aspect of the Pestle analysis model presents
how the company’s remote or macro-environment relates with
ecological changes. Amazon considers the following ecological
external factors in its strategic formulation:

 Rising interest in environmental programs.

 Rising emphasis on business sustainability.
 Increasing popularity of low-carbon lifestyles.