BPP Business School Coursework Cover Sheet
BPP Business School Coursework Cover Sheet
BPP Business School Coursework Cover Sheet
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GLOBAL STRATEGY AND SUSTAINABILITY: A CASE
STUDY OF AMAZON.COM
Table of Contents
Introduction 3
Conclusion 16
References 17
Introduction
Amazon started as an e-commerce business that initially used to deliver books. In 1995, the
e-commerce giant came to the market as an online book provider. The business service and
products are highly appreciated by the customers and hence, the business quickly attained a
high consumer base. The business also focused on developing the business models for which
it expanded from a traditional online book store to an ecommerce site from where it delivers
every type of consumer goods. Then, the business expanded dramatically ranging its products
from books to all consumer goods. The business also focused on elevating units technological
performance for which the business developed multiple technological services like AWS and
many more. In this context, Amazon at present time is leading the list of top e-commerce
businesses throughout the globe. The present report examines the business environment of
Amazon. The external business environment is analysed through Porter's 5 forces model and
PESTLE model while the internal business environment is examined through VRIO and
Value chain analysis. In addition, the CSR activities practised by the concerned business is
also examined. Lastly, multiple recommendations are drawn for the betterment of business
sustainability and development.
Critical analysis and evaluation of the External Environment
As per Shtal et al. (2018), businesses get highly influenced by external factors like market
trends, competitors and others. In this aspect, the external factors affecting the business
operation of Amazon have been examined through two business models which are Porter's 5
forces and PESTLE models.
PESTLE model
The PESTLE model is traditionally used for analysing the impacts of the external factors
affecting the businesses as shown in the below figure.
Figure 1: Application of PESTLE analysis model
(Source: Antamoshkina and Zinina, 2019)
Economic Factors ● The GDP in 2020 was degraded due to the Covid
pandemic which drastically changed the
consumer buying behaviour for Amazon (Statista,
2021)
● GDP has recovered in 2021 which changed
survival methods for the customers and has
increased the sales of the businesses
● The market share of Amazon in the global e-
commerce industry as recorded in 2019 was
52.4% (Statista, 2019)
● The recorded FDI of the US in 2019 was 246
billion US dollars which implies that the business
attains a high revenue margin as the import cost is
lowered while attaining high exporting sales.
Presence of ✔
brick and mortar
model
Developing ✔
diversity in the
e-commerce
industry
Developing ✔
portfolio for the
private label
services
Extensive ✔ ✔
distribution
channels with
high efficiency
involving the
regional,
international
and domestic
partnerships
Presence of high ✔ ✔
expertise and
specialist
High ✔ ✔
distribution
hubs and
strategic
warehouse
High brand ✔ ✔ ✔ ✔
equity
Huge market ✔ ✔ ✔ ✔
capitalization
International ✔ ✔ ✔ ✔
market reach
AI capabilities ✔ ✔ ✔ ✔
Table 3: VRIO analysis of Amazon.com
(Source: Created by the author)
Non-Core Competencies of Amazon.com: The non-core competencies of the concerned
business as observed in the above table is the presence of the brick and mortar business
model. It has been observed that this capability for Amazon is not rare, imitable. As per the
report of Bass et al. (2019), the Walmart business comprises a strong brick and mortar,
business model. In addition, Amazon strategy was observed in the provided case study of
diversifying the online services throughout the globe. The strategy of diversifying the online
services of Amazon adds high revenue sources making this capability inimitable and not rare.
It has been observed from the case study that developing a portfolio of private label services
helps the business in diversifying its offerings. For instance, a private label used by the
concerned business is known as AmazonBasics which assists the business in competing with
other online and offline businesses throughout the globe. As per Nyiendo and Omamo
(2019), developing the supply chain of a business and developing the capabilities of the
business helps in developing the business performance. In this aspect, the concerned business
comprises vast distribution channels as well as third party suppliers like delivery firms and
courier partners.
Core Competencies of Amazon.com: From the above VRIO analysis table, it can be clearly
stated that Amazon has long term capabilities that allow the business in increasing its
performance exponentially with increasing time. In addition, it has been observed from the
above table that the presence of high brand awareness and high brand equity allows the
business in attaining a huge customer base. This enables the business in increasing the
trustworthiness of its customers. High brand equity enables the business in attracting the
customers and the audience towards the emerging products and services of Amazon. Brand
equity is an imitable factor for Amazon as the business presence throughout the globe is high
and the customer satisfaction factor for the concerned business is relatively high which
enables the business in attaining a high competitive advantage. As observed in the study of
Vecchio et al. (2018), high market capitalization enriches the capabilities of a business. In
this context, Amazon comprises high market capitalization which allows the concerned
business to accumulate enough funds and also to invest in business development and
expansion. The affiliation network of the concerned business is huge and hence, the programs
of the concerned enterprise are high sharing links that support its consumers. This allows the
business in retaining the customers in the long run.
Value Chain Analysis of Amazon.com
Value chain analysis model refers to an analytical model which is primarily used to identify
the business operation which creates value and also provides a highly competitive advantage
to the businesses. In this concern, this analytical model has been used for identifying the key
activities of Amazon which provides a highly competitive advantage to the business as shown
in the4 below figure.
Operations ● Packaging
● Supervising the
supply chain
● Software
development
● Handling AWS
operations
● Devise content
creation
Strengths Weaknesses
● Presence of high brand position ● The business model of Amazon is
throughout the globe (Lorkowski and easily imitable
Grzegorowska, 2020) ● Amazon faced a huge decline in its
● Presence of high brand image revenue margin in multiple areas of
throughout the globe the globe
● Amazon is ranked at 2nd position ● Multiple products and services of
concerning brand value after Apple Amazon went flop and failed. An
and before Google (Silva et al. example of such products was the
2018). advent of Amazon’s Fire phone
● Constitutes a huge consumer base (Akter et al. 2016).
and hence referred to as one of the ● Tax avoidance in some nations like
customer-oriented businesses the UK, US and Japan negated the
throughout the globe publicity of the businesses
● Amazon brings and focuses on ● Amazon is over dependent on its
regular innovations in products and distributors. One of the more
services examples of its distributor is the
● The cost leadership strategy used by German Logistic group.
the business allows the business in
attracting new customers.
● Presence of huge distribution
channels and third-party sellers.
Opportunities Threats
● Amazon has immense business ● Amazon faced multiple controversies
opportunities to expand in various an example of which was faced in
nations. This high brand image 2010 (Singh et al. 2020).
throughout the globe help the ● The advent of modern technologies
business to develop its expansion can disrupt the business reputation
plan by exploiting the sensitive
● Amazon can expand its physical information associated with the
stores which can help the business.
concentrated business in competing
with other offline retail stores
operating throughout the globe
● It has an immense opportunity to
develop the organizational policies
and the technological measures for
securing the organizational data
Table 5: SWOT analysis of Amazon.com
(Source: Created by the author)
Recommendations for Global Development
As discussed in the SWOT model of the concerned business, the business faced multiple
controversies from multiple parties which disrupted the business net sales. In addition, as per
Kusumastuti et al. (2021), controversial business presence decreases the business presence in
the marketplace. In this aspect, few recommendations can be drawn for Amazon.com.
● The competitive advantage, market trends and promotional activities of the concerned
business can be boosted through consolidating the market dominance.
● The global controversies should be deal with a strategy for maintaining high
competitive advantage as well as sustainability and business growth
● The business presence on the aggressive competition faced by the concerned business
can be handled or mitigated through opening physical stores.
● Business plans for business expansion should be developed mainly in developing
countries from where the business can gain high business profits.
Recommendations for Sustainability
It can be identified from the provided case study that Amazon deals with a huge volume of
information related to customers and products in its daily operations. Therefore, the business
stores a huge volume of data which are sensitive to the customers and also for the business.
The sensitive information involved is like customer name, adulteress, their transactional
history and many more. Therefore, any sort of vulnerable data leaks or data theft can
diversity impact the brand value of Amazon. In addition, the business reputation can be
adversely affected by data leaks or data theft. This can lead to attaining unauthorized access
to the attackers or the hackers. These data hacks can be mitigated through implementing
multiple data security approaches like one of the reputed approach of data security is
multiple-factor authentication where the users are required to match their identities before
accessing any sensitive associated with the business. Another CSR dilemma associated with
the concerned business is waste production. Amazon faced a waste controversy in 2018
where it has been reported that the business exploits the environmental factors by increasing
the waste volume. This can be mitigated with the implementation of the lean production
model through which the waste generation issue can easily be mitigated keeping the quality
of the services and products at a superior margin.
Conclusion
Therefore, from the above discussion and after the analysis of the provided case4 study it can
be stated that Amazon holds a strong position throughout the globe. It has been identified that
Amazon focuses on continuous product development which helps the business in attaining a
huge consumer base. It has also been observed that the business operations of Amazon get
highly influenced by its external business environment where it faces high competition due to
the presence of a huge number of competitors. Value chain analysis and VRIO business
model have been used to identify the competitive advantage gained by the concerned
business which allows the business to operate seamlessly. It has been observed that the CSR
activities practised by the business highly benefit the society and also focus on the welfare of
the society people. However, multiple recommendations have drawn like the implementation
of the lean model and multiple-factor authentication can help the business in enriching its
business growth and its sustainability throughout the globe.
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