Amazon is a multinational corporation and the headquarters is located in Seattle, US. Though the organisation has their footmark in multiple commercial fields, they have main focus on e-commerce business, Artificial Intelligence, cloud computing, and digital streaming of online contents. 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. Jeff Bezos in the year of 1994 founded Amazon in Washington. Firstly, the company has started as an online marketplace for retailing books and ultimately extended the business to the field of electronic software, video games, apparels, furniture, jewellery and toys. After that the organization expanded their business in the field of the retail chain and crossed Walmart company in 2015 in terms of the market capitalization in United States. The online streaming platform of the organization named Amazon Prime also had a huge success in recent time and the online platform had more than 100 million subscribers around the different countries of world. Considering the business holdings of Amazon, it can be specified that in spite of chief focusing on The E-Commerce business the organisation has differentiated business model spreading in the business subdivisions like cloud computing, advertising and streaming. Over the years the organisation has grabbed a lot of different firms like AbeBooks.com, IMDb, Audible, CamiXology, PillPack, Fabric.com, Shopbop, Souq.com, Whole Foods Market, Twitch, Woot! and Zappos. Apart from the retailing the key business of the corporation is web-based cloud computing named as AWS. In 2002 the company had started the Amazon Web Services or AWS that 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 in the 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 Dollar in India to cash so that they can acquire the E-Commerce business in India. Before this Walmart had previously invested 16 billion US dollar 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 on the two Indian subsidiaries of Amazon. After this venture Amazon had a total asset of 3.6 billion US Dollar 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 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 of investing more in the market of India is associated with the fact that the growing popularity of the internet usages and the online market places in India and other subcontinent countries had encouraged the company to invest more in the 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 ana 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 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 has been boosted a lot. Furthermore, the enormous market place in India in the arena of ecommerce has been mostly unmapped and as a result it is considered as a possible marketplace of the ecommerce 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 the E-Commerce activities counting selling and obtaining a merchandise through digital stages.
Weakness- While conferring about the weakness it can be stated that the existence of Walmart along with 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 the 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. Amalgamation of those small and medium retailers into the stage of Amazon will benefit the corporation to raise their business in India and this chance will give modest advantages to Amazon.
Threats- In case of the threats of Amazon in India, it can be specified that existence of multiple retailers such as Flipkart, Myntra, Indiamart, can be a possible threat for 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 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 pressures for 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 indication is the government laws for e-commerce businesses. For example, few months back the Indian government stopped Flipkart and Amazon for selling goods of those companies they have equity stocks. Government provides support the companies like Amazon due to their huge funds but it still has to fulfil with 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 how producers offer their goods and facilities to consumers. Consumer buy from vendors in any financial condition and occasionally the trade survive even in the nastiest financial circumstances. Economic recession is additional important macro environment indicator that can affect Amazon. For example, Chinese economy is reducing these days and this Chinese recession is measured a danger to business expansion of Amazon. Booming retail industry generates chances but not only for Amazon. It means more rivalry for Amazon. Like retailer industry sellers are also booming their business and generate more competition in the market. For example, Walmart is growing its online existence to not only contest with Amazon but also to progress their tinny profit limits.
S- Young group is enthusiast and they are foolish for online shopping. The easy accessibility internet and mobile strategies amplified this ratio. The senior people who don’t walk or don’t like to go outdoor can also use Amazon online shopping platform. Online shopping has become a relaxation 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 masses. Amazon consumers and third-party vendors have worries about their delicate data like debit card, credit card and any private or confidential information kept on Amazon website.
E- Amazon Inc. has struggled pressure from stockholders and other investors to reveal data relevant to environmental effect. 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 the e-commerce trading. Ordering online needs fewer energy than going to physical shops and buy or pick up foodstuffs. Amazon is also trying for halving their 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 from 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 who collect customer data like emails, name and bank information. All the consumer data must be threatened. The European Union launched an inquiry and fined Facebook and Google. This is considered a huge threat to Amazon.