PoM Digital Assignment - 1
Industry: Amazon Business Company
1. PESTEL Analysis
Amazon
Trend
Political Focuses on political and
government activities and
caompanies and their remit or
its effects big atmosphere.
Economical The impact of economic
trends and changes on
Amazon's remote
environment is
considered.
Socio-Cultural Identifies the impact of
socio-cultural trends on
Amazon's performance as a
leading online retailer and
provider of IT goods and
services.
Technological Results of technologies and
related trends on the
remote environment
include this aspect of the
PESTEL analysis model.
Opportunity Threat
1. Political soundness of created 1. Administrative
nations, particularly the U.S.A. help for online
what's more, European nations. business.
2. Administrative help for online 2. Cybercrime
business. 3. political factor
3. Expanding administrative turns into a risk
endeavors on digital security. when its
backings
different
organizations in
the business.
4. Threat of
military
invasion.
1. Economic and Financial 1. Potential
solidness of created markets, financial
particularly the U.S. and subsidence of
European nations. China.
2. Expanding expendable
livelihoods in creating nations.
3. Arrive at an ever increasing
number of individuals
around the world.
1. Expanding 1. Expanding riches
commercialization in dissimilarity.
creating nations.
2. Expanding internet
purchasing propensities.
1. Quick mechanical out of 1. Quick mechanical
date quality. out of date quality.
2. Expanding efficiencies of IT 2. Expanding paces
assets. of cybercrime.
Environmental This aspect of the PESTEL 1. Rising enthusiasm for natural 1. Relying on
analysis model presents how projects. non-
the company's remote or 2. Rising accentuation on business renewable
macro-environment relates supportability. energy
to ecological changes. 3. Increasing prevalence of sourses.
low-carbon ways of life.
Legal Effect of regulations on 1. Rising item guideline. 1. Difference in
remote or the macro- 2. Changing import and fare Laws from nation
environment is determined guidelines. to nation
in this aspect of PESTEL 3. Rising natural assurance
analysis guidelines on organizations.

Political Factors
There are several international policies that act as a barrier to Amazon's growth. Amazon's expansion
into many countries is difficult because online policies will not coincide with political policies. Many
legal regulations also interfere with e-commerce procurement. It is true that the Internet is advancing
rapidly and becoming more affordable for all consumers. This helps Amazon consume the Internet and
place orders. Amazon allows consumers to contact the Internet and shop directly through an online
website.

Economic Factors
Currency fluctuations cause various issues when selling rich content on the Internet. Since the
company is based out of the US, all deals will be done in US dollars. Amazon's economy sales have
recovered from the recent recession and sales are slightly lower than before, but when the economy
improves, you can expect that Amazon will generate sales and increase revenue.

Socio-cultural Factors
In many areas of the world, the Internet is restricted due to moral factors and religious values. This has
limited sales in several areas for Amazon. The growth rate of any business through the Internet is
great. With innovation in technology, Internet users are increasing every year, and Amazon is
providing ways that will help increase market share. Social networks such as Twitter and Face Book
are seen by hundreds of people every day. This social platform provides direct marketing. Amazon
raises awareness through social network marketing strategies.

Technological Factors
Amazon is an online platform. It helps provide and find new ways that surpass competitors. Amazon
has gone through a huge success, but with the growth of Internet usage, people can now easily access
the Internet anywhere. It helps improve services through mobile devices and shopping worldwide.
Amazon lets the user get a competitive price that will help consumers to shop online with 3G and 4G
accessibility within reach of mobile internet. Amazon easily pulls consumers in while shopping.

Environmental Factors
Amazon provides cloud storage that eliminates the consequences of storage devices or hardware
services for the public. This means that we do not need computer components for mass production
either. Online shopping means eliminating travel time and distance which will reduce pollution.
 Shipping products require additional packaging for shipment. Amazon is looking for a way towards
greener shipping solutions.

Legal Factors
International laws will be required for the company when sold abroad. Most goods require separate laws
that depend on shipping such as alcohol and chemicals. When working with multimedia, the Internet
will give you some rights to media. Hollywood is fighting sales and giving away copies of sales
products. This will make it easier to create duplicates.

2. Analysis using Porter’s Five Forces Model and Rating Attractiveness

Amazon
Power Key Factors Degree Overall
attractiveness
a) Threat of New 1. Low exchanging costs.(High) Weak(a=5) 3= Moderately
Entrants 2. High expense of brand attractive
advancement.(Weak)
3. High economies of scale.(Weak)
b) Rivalry among 1. High forcefulness of firms. (High) High(b=1)
incumbents 2. High accessibility of substitutes. (High)
3. Low exchanging costs.(High)

c) Bargaining Power 1. Small populace of providers.(High)

of Suppliers 2. Moderate forward reconciliation.(Moderate) Moderate
3. Moderate size of providers.(Moderate) (c=3)
d) Bargaining Power 1. High nature of data.(High) High(d=1)
of Buyers 2. Low exchanging costs.(High)
3. High eccessibility of substitutes.(High)

e) Threat of 1. Low exchanging costs.(High) High(e=1)

Substitution 2. High accessibility of substitutes.(High)
3. Low ease of substitutes.(High)

Threat of New Entrants (Weak Force, a=5)

The risk of new entrants to Amazon is low. This is because the spread of digital technology has brought
many changes in the retail industry. Many new brands have entered e-retail. It is now easier to create an e-
retail business model with available technical resources. A number of national and international brands
have emerged from Alibaba to Flipkart and eBay that compete with Amazon. The development of digital
technology has reduced barriers to entry. However, it is very difficult to build a brand like Amazon due to
marketing and other expenses. Not only that, the problem is that there are other strategic factors that would
require dedication to Jeff Bezos to build a brand.

Rivalry Among Incumbents (High Force, b=1)

The level of rivalry in the industry is high as the number of players in e-retail has increased and there is
also considerable competition from traditional retail brands. Walmart and Costco are important competitors
of the e-retail giant. The rivalry in the retail industry is also intensified by many other factors. It is not only
big brands, but also small brands that are fighting for market share and creating competitive pressures.
Some large non-American brands have entered the US market, and some more plan to rapidly expand and
expand their presence. So, how the level of competition for Amazon will continue to grow is not
inconceivable.
Bargaining Power of Suppliers (Moderate Force, c=3)
The bargaining power of Amazon suppliers is negligible. Amazon deals with a wide range of suppliers due
to the diversity of its business and the company exercises a vast bargaining power with respect to most of
its suppliers. For example, authors and independent publishers with Kindle Direct Publishing are contracted
based on a 70 percent royalty option and are not in a position to reduce the amount of their royalties with
Amazon. During 2017, none of the vendors took 10% or more of Amazon's purchase.

Bargaining Power of Buyers (High Force, d=1)

The bargaining power of Amazon buyers is normally great. At the same time, it is important to clarify that
for Amazon, the extent of buyer bargaining power varies in different categories based on customers and
consumption of products and services. Customers who purchase from the Amazon market have the greatest
bargaining power because they are able to move to a competition or substitute products and services and are
sensitive to a significant extent. In addition, the ability of the buyer to visit the option's website can be great
due to extremely intense competition in the market. Likewise, Amazon electronic devices such as the Kindle
e-reader, Fire tablet, Fire TV and Echo have substantial bargaining powers due to the intensity of
competition and the absence of switching costs.

Threat of Substitution (High Force, e=1)

The risk of substitute products for Amazon is high. While many other brands have also entered online retail,
people can also buy from physical retailers. Amazon's only major competitive advantage is its excellent
customer service in addition to its brand name.

Overall Attractiveness = (a+b+c+d+e)/5 = 11/5 =

2.5 ~ 3 Therefore, Amazon is moderately
attractive.