Unit 1 – Exploring business
The effects of the environment on a business.
Selected business: Amazon
Introduction
This report will be focusing on the external and internal environment of Amazon. To
fully achieve analysis of it, there will be used PESTEL and SWOT analysis as well as the
5C’s and Porter’s 5 forces. The way supply and demand affect pricing and output
decisions of Amazon will also be discussed.
P4 – Discuss internal, external and competitive environment of Amazon.
PESTEL Analysis
Political Economic Social
Amazon is influenced by a A very common A positive effect on
range of political factors economic factor that has Amazon has the obesity
as the company ships direct impact on Amazon problem that the globe is
products to multiple is unemployment rates in facing. The convenient
countries around the the countries they ship delivery they provide and
world. In 2018 the US to. The countries that the range on fruits and
government blocked have low unemployment vegetables leads the
Amazon’s expansion as rate will impact Amazon governments to supporting
they were concerned that positively because the business in order to
they monopolise the people will be able to help reduce the obesity
market. Another political buy more. However, problem.
factor that affected countries with high After the Covid-19
Amazon and their online unemployment will pandemic, the e-
sellers was Brexit. negatively affect the commerce businesses
Because of it is now more company as less people increased, and it has now
difficult to sell UK stock in will be buying. A positive become normal to order
Europe. A positive economic effect for shopping online rather
political factor that affects Amazon was the Covid- than going in-store which
Amazon is the efforts of 19 2020 recession in the benefits Amazon as it will
different governments to UK. The fact that many have positive impact on
increase cyber-security. businesses couldn’t their future sales.
This is positive for the operate online combined
company as the with the lockdowns
customers will feel safer caused the recession but
when shopping online as Amazon was
and this will potentially operating online and it
increase sales. was safer for everyone,
, sales increased.
Technological Legal Environmental
Technology is improving As Amazon is an Environmental factors
very fast which is a international company, have been seriously
technological factor that they should be aware influenced by other social
directly affects Amazon. and obey the different factors. Through, social
The company must always laws of other countries. media the public has
be updated with the For example, if there are managed to spread
newest technology in updates on the data awareness about global
order to keep their protection act and warming. Today people
customers. By improving Amazon is not aware of may be encouraged not to
technology customer’s them then, they will be purchase from companies
expectations increase too. facing charges. that are not eco-friendly.
Also, new technology like The laws of different Therefore, pressured by
robotics is another factor countries can directly the public, different
that can completely impact the company. If companies including
change the way Amazon some of the Amazon have been forced
delivers their products. By governments decide to to find new ways to make
switching to robotic change laws this might their business more
technology, costs like restrict Amazon from environmentally friendly.
salaries for their drivers distributing their One of the results this
would be cut. products around the factor had on Amazon is
Another technological world. creating more sustainable
factor that has massively packaging for the
improved customer products. In order to
service for Amazon as improve even more, in the
well as other businesses is future Amazon may decide
the 24-hour live chat to use robotics to decrease
where customers can get the damage that is done
support at any time. on the environment by the
vehicles used for package
transportation.
SWOT Analysis
Strengths Weaknesses
Powerful brand: Amazon has Public opinion: there have been a
managed to become an few negative public opinions
international company and they about Amazon that affect
have massively increased brand company’s reputation. These are
awareness. tax avoidance, employee unfair
Latest technology: the business is treatment, environmental
using the latest technology and damage.
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