SWOT and PESTEL Analysis of AMAZON
Amazon Company was founded in 1994 and was launched in the year 1995 with an aim of being the world’s most customer centric company. It has a build-up effective customer service, including effective inventory and shipping empire. It is an American multinational technology company that is located in Seattle, Washington. The Company is guide by main four principles which include customer obsession instead of focusing on the competitor, passion for operational excellence along with commitment to the operational excellence. In this context, the SWOT analysis along with the PESTEL analysis of Amazon can be discussed.
SWOT Analysis
SWOT analysis can be correctly defined as a framework that identifies and analyses the major strengths, weakness, opportunities and the threats linked with a company, project, and product or even with a person. SWOT analysis is mostly used to understand the impact of the internal or the external factors on the viability of an undertaken project or an organization. It is an effective business tool that is used for identification and analysis of a particular risk in a company. In the below matrix form, the SWOT analysis of company AMAZON is depicted-
Strength
- Effective leadership, determination and focus to customer betterment
- Competitive advantage in leveraging IT services which are scalable and easy to ramp up
- Global recognition as a customer centric brand
- Use of superior logistics
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Weakness
- The diversification strategy is spreading itself too thin
- All time free shipping can be dangerous
- Under-estimating the competitors
- Operation in near Zero business Margin
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Opportunities
- Online payment provide easier opportunities of scaling up the business
- Productivity under its own brand
- Expansion in global footprint
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Threats
- Identify Theft and hacking increases concern of online shopping
- Aggressive pricing strategy can be a threat
- Has competition from the local market.
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PESTEL Analysis
PESTEL analysis can be best described as a framework that is mainly used by the marketers in analysis and monitoring of the macro environmental factors that are associated with a business. The results obtained from the PESTEL analysis are often used in identification of threats and weakness in SWOT analysis of a company. PESTEL is an acronym for Political, Economic, Social, Technological Environmental and Legal condition. The PESTEL analysis of the Company Amazon is indicated as follows-
Political-
- Political stability in the developed countries, such as in U.S.A and European countries
- The business has complete governmental support
- Increase in the efforts by government to enforce proper cyber security options
Economic-
- The organization has economic stability in the developed markets
- There is an increase in disposable income in the developing countries
- There is a potential of economic recession of China, which is a threat to the Company.
Social-
- There is an increase in wealth disparity, which is a threat
- There is an increase in consumerism in the developing countries, which is an opportunity
- There is an increase in online buying habits which is an opportunity as well.
Technological Factors-
- There is a rapid technological obsolescence
- Increase in efficiencies of IT resources
- Increase in rates of cybercrime
Ecological/Environmental Factors
- There is a rising interest in the environmental programs
- There is a rising emphasis on the sustainability of the business
- Increase in the popularity of a low-carbon lifestyle
Legal Factors-
- There is an opportunity of rising product regulation
- Changing of the import and the export regulations
- There is an increase in rising environmental protection regulation on business
