Amazon is a multinational corporation and its headquarters is located in Seattle, US. Though the organization has its footmark in multiple commercial fields, they have a main focus on e-commerce business, Artificial Intelligence, cloud computing, and digital streaming of online content. Amazon is considered as one of the big 5 companies in the US along with Facebook, Apple, Google, and Microsoft. Moreover, it is also stated that Amazon is one of the most powerful economic and cultural powers in the world.
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Jeff Bezos in the year of 1994 founded Amazon in Washington. Firstly, the company started as an online marketplace for retailing books and ultimately extended the business to the field of electronic software, video games, apparel, furniture, jewelry, and toys. After that, the organization expanded its business in the field of the retail chain and crossed Walmart company in 2015 in terms of market capitalization in the United States. The online streaming platform organization named Amazon Prime also had huge success in recent times and the online platform had more than 100 million subscribers around the different countries of the world.
Considering the business holdings of Amazon, it can be specified that in spite of the chief focus on The E-Commerce business the organization has a differentiated business model spreading in the business subdivisions like cloud computing, advertising, and streaming. Over the years the organization has grabbed a lot of different firms like AbeBooks.com, IMDb, Audible, ComiXology, PillPack, Fabric.com, Shopbop, Souq.com, Whole Foods Market, Twitch, Woot! and Zappos. Apart from retailing the key business of the corporation is web-based cloud computing named AWS. In 2002 the company started Amazon Web Services AWS which was firstly accountable for internet traffic patterns, offering data on the internet site popularity, and numerous other facilities to the developers and marketers.
In order to fight back in the arena of retail business worldwide, the company had taken a few initiatives such as investing more resources and money in the possible markets of diverse countries so that they can contest with Walmart in terms of general business income. In this context, it can be stated that Amazon CEO Jeff Bezos would like to invest 5 billion US Dollars in Indian cash so that they can acquire the E-Commerce business in India. Before this Walmart had previously invested 16 billion US dollars in the Indian market in the form of investing in the E-Commerce company Flipkart and as a consequence to acquire the Indian market Amazon decided to invest 2700 crore in the two Indian subsidiaries of Amazon. After this venture Amazon had a total asset of 3.6 billion US Dollars in India. From the file of Amazon, it was conveyed that the board of directors of Amazon Sellers Limited decided to assign 270 crore equity stocks of 10 rupees to face price to the Singapore-based Amazon corporate Holdings Limited and along with these 124753 stocks were furthermore allocated to Amazon.com Incs Ltd without any premium. The main reason for investing more in the market of India is associated with the fact that the growing popularity of internet usage and online markets places in India and other subcontinent countries had encouraged the company to invest more in a country like India and hence it can be stated that the before investing more to the country the organization must consider the factors of the SWOT and PESTLE analysis. Case studies require SWOT and PESTLE analysis and justified solutions. The SWOT and PESTLE analysis for the organization is as below-
The SWOT analysis behind this decision can be explained by the factors mentioned below.
Strengths- The population of India is the main strength that might inspire Amazon to invest more amount of money in the business of the E-Commerce segment. In this regard, it can be described that due to the progression of technology, the values of online business and online shopping have been boosted a lot. Furthermore, the enormous marketplace in India in the arena of eCommerce has been mostly unmapped and as a result, it is considered as a possible marketplace for e-commerce trades. It was described that India is second in terms of internet users after China and there are roughly 462 million internet users in India. This situation had improved E-Commerce activities by counting selling and obtaining merchandise through digital stages.
Weakness- While conferring about the weakness it can be stated that the existence of Walmart along with the previously reputable Indian company Flipkart in the business field of e-commerce and retail can hamper the progress of Amazon in India. It is also reported that the weakness of Amazon in India is due to the presence of Flipkart. The Indian body’s partnership with the retail giant Walmart had given a competitive advantage to Flipkart in India.
Opportunities- As a part of the opportunity for Amazon in India it can be specified that the sellers of the emerging states of India are not capable to reach a wide range of clients across the country. The amalgamation of those small and medium retailers into the stage Amazon will benefit the corporation to raise its business in India and this chance will give modest advantages to Amazon.
Threats- In the case of the threats to Amazon in India, it can be specified that the existence of multiple retailers such as Flipkart, Myntra, and Indiamart, can be a possible threat to Amazon’s business in India. Furthermore, in the case of Amazon’s online video streaming facilities that is Amazon Prime services, the progress of Netflix can be a danger to the company as well.
PESTLE Analysis of Amazon
P- Political stability can affect Amazon's e-commerce business. For example, the political stability of developed countries like Australia gave Amazon.com an opportunity to expand its business in the region. Even a stable political government can generate pressure on a company. The European Union is inspecting Amazon.com regarding the use of retailers’ data who sell on Amazon Marketplace. Another political factor that is worth indicating is the government laws for e-commerce businesses. For example, a few months back the Indian government stopped Flipkart and Amazon from selling goods of those companies they have equity stocks. The government provides support the companies like Amazon due to their huge funds but it still has to fulfill government laws and rules which is occasionally very problematic.
E- Amazon will nurture fast if the financial circumstances are positive in the parts where it is operating. Retailing is an average of how producers offer their goods and facilities to consumers. Consumer buys from vendors in any financial condition and occasionally the trade survives even in the nastiest financial circumstances. Economic recession is an additional important macro environment indicator that can affect Amazon. For example, the Chinese economy is reducing these days and this Chinese recession has measured a danger to the business expansion of Amazon. The booming retail industry generates chances but not only for Amazon. It means more rivalry for Amazon. Like the retail industry, sellers are also booming their businesses and generating more competition in the market. For example, Walmart is growing its online existence to not only contest Amazon but also to progress its tinny profit limits.
S- The young group is enthusiastic and they are foolish about online shopping. The easy accessibility internet and mobile strategies amplified this ratio. Senior people who don’t walk or don’t like to go outdoors can also use Amazon's online shopping platform. Online shopping has become a relaxing job in this day. Amazon can grab this chance to influence more and more people around the globe.
T- Technology is the spine of Amazon. Technology completed amazon as one of the most profitable companies in the globe. Amazon is concentrating on technology in terms of cloud computing (amazon web service) a scheme to satisfy its customers. Cybercrime is a danger to Amazon. The complete business model is on the masses. Amazon consumers and third-party vendors have worries about their delicate data like debit cards, credit cards, and any private or confidential information kept on Amazon's website.
E- Amazon Inc. has struggled with pressure from stockholders and other investors to reveal data relevant to environmental effects. Recently Amazon.com stated that it will reveal all such data later. Another challenge for Amazon is dropping organizational discharges. It is quite difficult to evaluate the release from e-commerce trading. Ordering online needs less energy than going to physical shops and buying or picking up foodstuffs. Amazon is also trying for halving its shipment emission-free by 2030.
L- There are diverse Consumer Privacy Acts that could generate a danger in the macro environment of Amazon. California Consumer Privacy Act 2018 is one of them and will take effect in 2020. Giant Tech Companies like Amazon, Apple, and Facebook will be required to inform users what type of data they collect and how they share or use this data. Another legal issue is EU GDPR (General Data Protection Regulations) disturbs Amazon and all those businesses that collect customer data like emails, names,s and bank information. All consumer data must be threatened. The European Union launched an inquiry and fined Facebook and Google. This is considered a huge threat to Amazon.