Amazon Company and Environmental Factors

Every firm, including Amazon, is impacted by both micro and macro environmental variables in every business environment, either directly or indirectly. The aforementioned elements may influence the demand for the company’s goods and services in a positive or negative way or may encourage the development of new goods. Additionally, they can push up the price of raw materials, create new target markets, or change the course of existing plans.

Determining these environmental factors that directly impact the company’s business is crucial. These elements have an impact on Amazon’s product demand. The PESTLE analysis is a tool that is useful in identifying micro and macro – environmental conditions affecting the company. In the case of Amazon, the online retail market conditions are considered too. Amazon enjoys the huge revenues that it draws from the online services. However, the online market as posted in the case is dynamic hence creating new challenges for the company.

Therefore, it’s significant for Amazon to be resilience and remain competent in addressing such issues. Through PESTLE model, it’s easier to identify the threats and opportunities facing Amazon based on its micro and macro environment. Amazon PESTLE analysis typically reveals the importance and dangers of expanding online retail store in developing markets to promote the global growth of the business. Therefore, it’s recommended to ensure integrity and security of the Amazon IT assets to maximize customer experience.

The company enjoys political stability as the online stores are not affected by the political temperatures. Therefore, the condition creates an opportunity for Amazon to diversify and expand their business globally. For example, the company could expand its bookstore operations in countries like the United States to boost its e-commerce business. Additionally, the general government support is also an opportunity that promotes e-commerce. Therefore, Amazon can expand its online business through governmental support.

However, this macro environment factor threatens Amazon online retail due to the increased competition from other established businesses. Particularly, from Chinese online retail agencies which are expanding their operations. Nonetheless, governments strive on reducing the cybercrimes as it a strategy of creating a friendly environment for online businesses. Notably, the PESTLE model of Amazon shows opportunities that need to be exploited by the company to increase its resilience in both macro and microenvironment of the online industry.

Therefore, for Amazon Company to increase and remain in the e-commerce for a long time, the company needs to adhere to the legal requirements of the online business regulator. However, the effects of such regulations on micro and macro – environment can be determined by the PESTE analysis. In the case of the Amazon, the following are suitable strategies for dealing with the opportunities at Amazon; increasing product regulations, facilitating both imports and exports regulations, and rising environmental protection regulations.

Increasing product regulations results from the societal demands of the business organizations. This strategy creates opportunities for the company to strengthen its efforts in reducing counterfeit products on its online stores. Amazon also has the opportunity to expand, based on the factors of reducing export and import regulations, particularly; the company can increase its online operations to gain the advantage of the increasing potential of sellers to access overseas products. Additionally, Amazon has the opportunity to strengthen its brand’s image by developing suitable corporate social responsibility policies that articulate on the increasing environmental protection rules.

Therefore, such efforts are necessary for increasing the e-commerce competitiveness in the micro or macro environment. Precisely, management of the Amazon can use PESTLE model in ensuring long-term online business by emphasizing on the regulatory compliance. From the critical analysis above, we can conclude that Amazon remains to be the top player in the e-commerce market. From the case study, it’s also clear that Amazon has shown resilience despite facing stiff competition from Wal-Mart.

The analysis of the macro and microenvironment also identified vital issues that are very critical to the Amazon’s long-term success. Therefore, it’s recommended for Amazon to increase its operations in developing markets, which has the potential of growth in e-commerce and rapid economic development. Additionally, Amazon should also address information in security issues via continuing and improving its current strategies for integrity and IT security. Because when such issues, if not addressed, can affect the stability and confidence of the consumer as presented in the case. Additionally, based on the environmental analysis, it’s recommended for the company to enhance its brand strength through corporate social responsibility strategies that will address current issues by linking natural environment and business.

Works Cited

Gillespie, A.PESTEL analysis of the micro and macro-environment. Foundations of Economics, Oxford University Press, USA. . (2007).