Week Six External and Internal Environment Assignment
Jeremy Taylor
Strayer University
Business 499
Dr. Grizzell
15 August 2022
Week Six External and Internal Environment Assignment
Introduction
The biggest e-commerce site in the world is Amazon. The business was created by Jeff Bezos and initially focused on selling books. Amazon has increased the range of their goods and services over time and has had great success. The firm has succeeded in fulfilling its aim to “provide the Earth’s largest assortment of items and to be the Earth’s most customer focused company where consumers can search and discover everything that they may desire to purchase” and has achieved this today. Amazon.com offers a wide variety of commodities, including books, furniture, electronics, clothing, and about anything else a buyer would be searching for. To retain clients shopping with them, the firm attempts to provide the finest assortment of items at the best pricing. Products are available on Amazon and are sold by both Amazon and independent sellers. On Amazon, customers may also sell products. Amazon’s business approach has proven to be effective throughout the course of the company’s more than 20-year history.
General, Economic and Political Environment
The term “general environment” refers to a larger system that may be broken down into a total of six subsystems: political, economic, environmental, legal, socio-cultural, and technological. Amazon is influenced by all of the sectors, but the economic and technical segments are the ones that would rank the top in terms of their effect on Amazon.com. Economic variables have an impact on the market and the circumstances of the market in every kind of company (Bennett et al., 2018). Amazon.com places a significant emphasis on a variety of economic considerations. When the economy is in healthy shape, businesses are rewarded with higher earnings. If the economy is in poor shape, it might have a negative impact on Amazon’s business, leading to decreased sales and revenues. Amazon is fortunate in that it operates as an online commerce company that offers a variety of products that people are willing to purchase regardless of the state of the economy.
Because Amazon conducts all of its business on the internet, the corporation is very dependent on many forms of technology. They cannot do business or interact with consumers without the assistance of technology. In order for business to continue normally, it is necessary for the organization to be current with developing technologies. Marketing, social media, and sales all benefit from the use of technology. Because members of the millennial age depend so heavily on modern technology, businesses are being forced to keep pace with technological advancements. In today’s world, technological innovation has emerged as one of the most important factors in business success.
Five Forces of Competition
The competitive rivalry, the bargaining power of suppliers, the bargaining power of consumers, the threat of new entrants, and the danger of alternative goods or services are the five forces of competition. The possibility of competitors offering items and services that are identical to Amazon’s is, in my view, the least important of the five competitive factors it faces. Although Amazon does produce and sell its own items (such as the Amazon Echo and the Amazon Fire), the firm does not depend largely on the sales of these products, and they offer hundreds of other products as well. The possibility of new competitors entering any industry is always an important factor to consider. According to Amazon’s annual report, “business is susceptible to fast change and the creation of new business models as well as the entrance to new and well-funded rivals.” [Citation needed] In light of this, I don’t think the corporation places a lot of importance on the possibility of new competitors entering the market. Competitor strength and the influence of customers are, in my opinion, the two aspects of the competitive environment that are most crucial for Amazon’s business.
The quick expansion of the e-commerce sector has resulted in a competitive riverly that is exceedingly intense. This is owing to the rapid growth of the e-commerce industry. The corporation competes in the global market and must deal with competition from a broad variety of sectors originating from all over the globe. The firm faces competition from a number of other businesses, like Walmart.com and EBay, to mention just two examples. Both of these organizations provide items that are similar to those offered by the company in question and have growing e-commerce websites. These two companies are Amazon’s rivals, and they both have a lengthy history, or perhaps a longer history, and they may have more customers or more brand awareness (Dastin, 2018). In the past, Amazon has differentiated itself from other retailers in the retail industry by variety, price, and convenience, which are the three primary key competitive criteria.
Amazon places a significant premium on the purchasing power of its customers. Customers may choose from a wide variety of services offered by online retailers. Amazon gives its customers the option of purchasing things (the same products that Amazon sells) from any one of the hundreds of other websites that are available on the internet. Amazon must provide pricing that are either competitive or low in order to keep its consumers happy; otherwise, those customers may go for a business online that offers lower costs and choose to shop there instead (Robischon, 2017). Another issue that has to be addressed is the fact that Amazon is an online retailer, but its consumers may shop at other businesses that are physically located in buildings and avoid having to wait for their purchases to be transported to them.
Future Improvements
Amazon.com, Inc. has said, “Amazon is led by four principles objectives, with one being customer obsession rather than competitive emphasis.” If Amazon wants to stay ahead of the competition in the foreseeable future, I recommend that they maintain prioritizing their customers’ needs above everything else. Customers want more than just high-quality goods; they want amazing service as well. Amazon’s dedication to its clientele ensures its continued patronage since shoppers know they are important to the company. To be competitive in the face of so many rivals, Amazon must maintain rock-bottom pricing, endless product selection, lightning-fast delivery, and first-rate customer service.
If Amazon can keep its customers happy, it will be able to increase its buying power in the not-too-distant future. It is crucial for the company’s survival that its consumers continue to be pleased with its services and products. Amazon has built a loyal customer base thanks to its excellent customer support and competitive pricing policy (Sadq et al., 2018). The low prices may be attributed to the store’s virtual location. The reduced operating costs will allow them to maintain their industry-leading low pricing.
Greatest Opportunity
Amazon has the best chance of succeeding by increasing its foreign presence and opening physical retail locations. Amazon’s e-commerce business may benefit from the addition of physical retail locations. Customers that choose not to purchase online might be attracted to the business by opening a physical location. The firm has great potential for expansion if its brick-and-mortar locations were to match its online rates and provide the same level of customer care that has made it so successful. Increasing the company’s foreign presence may assist it attract clients in underserved regions. Customers in regions where Amazon isn’t yet available will be drawn to the firm as it grows internationally.
Strengths and Weaknesses
Without a doubt, Amazon’s successes have been remarkable. Amazon’s primary competitive advantage is its dominant position in the online retailing market. The corporation has rightfully earned its reputation as the biggest e-commerce company in the world. Amazon’s growth, revenue, and new product introductions are all on the rise. The company’s platform has been shown to be its primary strength.
Amazon’s dependence on shipping instead of having real stores is its greatest flaw. If Amazon had a brick-and-mortar storefront, consumers could save money on shipping and avoid waiting around for their packages by picking them up in person.
Resources Capabilities and Competencies
Amazon’s clients, merchandise, and infrastructure are its most valuable assets. A company’s resources are the things it requires to produce and sell its goods. What creates the capabilities is the sum of these parts. Online retailer can guarantee client pleasure and remain ahead of the competition thanks to Amazon’s resources.
Amazon’s goods, patents (including its one-click payment option), customer database, and technological infrastructure constitute the company’s tangible assets. The company’s unending success is due in large part to their collective athletic ability. Amazon’s ability to sell its wares online has completely disrupted the industry. This company was an early pioneer in the realm of selling goods through the Internet. As part of its cost-leadership strategy, the corporation consistently offers its wares at prices lower than those of its rivals. Even Amazon’s services are top-notch. In addition to being low-cost and easy for clients, they also provide a variety of delivery methods.
References
Dastin, J. (2018). Amazon scraps secret AI recruiting tool that showed bias against women. In Ethics of Data and Analytics (pp. 296-299). Auerbach Publications.
Robischon, N. (2017). Why Amazon is the world’s most innovative company of 2017. Fast Company Magazine, 2.
Sadq, Z. M., Sabir, H. N., & Saeed, V. S. H. (2018). Analyzing the Amazon success strategies. Journal of process management and new technologies, 6(4).
Bennett, A., Ravikumar, A., & Paltán, H. (2018). The Political Ecology of Oil Palm Company-Community partnerships in the Peruvian Amazon: Deforestation consequences of the privatization of rural development. World Development, 109, 29-41.
