Business Environment Assignment
Introduction
The concept of business environment is a compilation of all external and internal factors, which include consumer needs, employees, demand, supply, government activities, technology innovation, social trends, economic changes, and trends of the market. Most multinational organizations maintain an overview of the business environment in terms of managing the internal and external environment (Adams et al., 2019).
This report is the detailed conceptual framework of the business environment with respect to organizational management. The researcher has chosen a company name like Amazon. In context with the selected company, the researcher has discussed every aspect of the detailed business environment with the identification of several market analyses as well.
This report is the core evaluation of various intellectual marketing strategies with the implementation of several approaches and models respectively.
1. Mission, History, and Objectives of the Company
In this section, the researcher has discussed the entire overview of the chosen company name like Amazon. It generally includes the explanation of the company mission, aim, objectives, future prospective, employee size, and different market tactics respectively (Al-Marzooqi and Nobanee, 2020). The prescribed information of the Amazon Company is being solely taken from the Amazon Company based on the latest data source respectively. The mission and all the required information of the Company is being taken from the company website itself respectively
1.1 Identification of the type and size of the Company
The chosen company is Amazon. The company headquarters is situated in the USA in the states of Washington. The company is an American multinational e-commerce and a technological organization with several forms of products and services variations serving worldwide. Based on the present scenario, Amazon is a top 10 multinational companies in terms of revenue generation prescribed by Fortune 10 respectively. There exist more than one crore different segments of products variants in its online platform and offered designated consumer services like Amazon Fresh, Amazon Web Services, Amazon Prime, Alexa (a very popular services), Fire TV, Kindle, unlimited music, tablets, and many more services (Preuss, 2019). Based on online sources, in the current scenario, more than 1125300 employees are working in company management respectively. In general, the company operates on an online platform, sells its product, and services directly in the form of B2C and B2B versions.
y mission
Based on the Amazon website information, the company’s mission is to maximize the consumer bar by using technology and the internet. The company is also focusing on empowering the customers by discovering the creating valuable business operations contents respectively. In addition to these, based on the Amazon Company website it has been noticed that the company will focus to implement and adopt the CSR policy in a respective manner. The company is driving the terms towards the safety and the security of the environment too. Moreover, the company’s main mission is to defeat all its competitors from the target market segmentation and earns revenue of 10% growth each year (Park, 2020).
Figure 2: Sales representation of Amazon Company
Source: (Amazon, 2020)
1.3 How the Company claims to gain its corporate objectives through its relationships and activities
Amazon is achieving its proposed aim and objectives in terms of dedicating and maintain the core relationships of the potential shareholders and reliable investors in a respective manner. Moreover, as far as the future objectives are concerned, the company is aiming to be the number one revenue generation company in the next two years. In addition to these, the researcher has also poured a reflection on the company’s main corporate objectives and has found that Amazon is attracting many big multinational companies (as a potential client) and issue company equity shares in a target capital market respectively (Pingolia, 2020). This has led to the company’s maximization of shares and dividends in a respective manner. Moreover, the company is also focusing on the implementation of the applications named as CRM; in order to grab the attention and the potential preferences of a reliable customer as well.
2. Competitive Environment and Market Conditions of the Company
In this section, the researcher has discussed and highlighted Amazon’s competitive analysis in terms of illustrating the PESTEL analysis, Ansoff Matrix, and Yips model. Moreover, this section will also reflect Amazon’s competitive position and performance in the target competitive market respectively. The analysis of PESTEL analysis is considered as one of the most important analytics for all company management; as it enables the organization to find the exact loopholes and the prevailing deficiencies in the target market segmentation based on the micro and the macro-environmental determination.
2.1 Identification of External Business Environment
In this section, the researcher has discussed the core identification and the analysis based on the Amazon Company and has highlighted the mentioned analysis provided below.
PESTEL Analysis
The concept of PESTEL analysis implies the discussion of macro-environmental analysis with respect to organization management. It predicts and contrasts the political, technological, social, environmental, and legal analysis irrespective of its target market and country. The PESTEL analysis of the Amazon Company is as mentioned below:
- POLITICAL- The obstacles before e-commerce are have not remained similar to traditional commerce. Yet, there remain the risk possibilities which may affect e-retail sectors. Amazon has been a pioneer in the sector,& it got affected by numerous political issues. Even in an E-commerce such as Amazon as well as E-bay the red tape in these nations of Asia might become a huge problem (Sinha et al., 2020).
- ECONOMIC- Economic issues always remain a crucial influence upon the market condition. If the economic condition of the market stays good, this would come out at broader sales and more profits. Even at recession times, the retail business was going well. This issue to people’s always purchase of the everyday items no matter the economy stays good or not. Now the labor market condition and the worldwide economy got better customers confidence also.
- SOCIAL- Cultural and social trends have always been crucial subjects of e-retail growth. The trend of online shopping has become more powerful in the present years. More usage of mobile technology usage and digital technology growth has given a boost to online sales (Mihailova, 2020). A vast mass of people use smartphones and use the internet and act so much be it online shopping or social media.
Figure 3: PESTEL Analysis of Amazon Company
Source: (Christodoulou and Cullinane, 2019)
- TECHNOLOGICAL-In the 21st century the technological matters grew highly. Be it online commerce or traditional commerce, everything depends on the IT system for delivering better services. Cognitive intelligence and artificial intelligence became crucial also for better services (Szigeti, 2020).
- ENVIRONMENTAL– Continuation is a crucial thing for worldwide businesses. Even the retailers focused on the various sectors as waste reduction, packaging also renewable energy.
- LEGAL– Legal factor is also a crucial factor in businesses worldwide. This is very important for a big brand like Amazon in remaining compliant with the law. It has a legal team to look after the legal challenges and issues. It is considered one of the most important aspects of the analysis tactics respectively.
Ansoff Matrix
The concept of Ansoff Matrix implies a planning strategic tool that initiates a proposed framework to assist the management executives, superiors, and subordinates respectively. Many organizations are generally used for planning the marketing process.
Market penetration– Market penetrations refer to the sale of existing products to the existing market. Amazon makes the use of the strategy of market penetration very aggressively. Sophisticated users experience features normally and recommendation features on the website of e-retailer particularly play a crucial character in the implementation of the strategy of market penetration.
Product development– Product development includes the development of new products for selling in existing markets. This has been one of the major strategies of Amazon. Starting with the selling of physical books in 1997 online by Jeff Bezos, this site now sells everything that is needed in everyday life. It is the biggest online seller globally along with a revenue of 500 million products, which includes the products sold by third parties online.
Market Development– The strategy of market development includes looking for new markets for current products. This site is totally engaged with product development in a totally systematic way. They started from the US, and now have certain sites in a total of 13 nations That includes the United Kingdom, Canada, India, and China (Mon, 2020). And also prime free one day and prime free same-day are active in over 8000 towns and cities currently.
Diversification– Diversification includes making the latest products for selling into the new markets as well as it is marked as being the strategy which is the riskiest one. This site uses the diversifications to a particular extent. As the outcome of this diversification strategy, Amazon is currently operating in hardware, media, advertising as well a lot of other segments of the business.
Yips Module
The concept of the Yips Module refers to the four generalized sets of globalization industry drivers. It states the underlying conditions that initiate and create a potential for global industry respectively. In this section, the researcher has discussed the analysis of the Amazon Company mentioned below:
Market drivers-A prospect of globalization is steady customer convergence needs. As the customers in various parts worldwide demand similar products as well as services increasingly, the opportunity for the scale arises through the marketing of less or more standard offerings. How common tastes, needs, and preference would vary so much by the products and depends on those factors like the significance of the cultural diversion, disposable income, as well as the homogeneity degree of the conditions, which those products are used or consumed (Musotto and Wall, 2020). This may apply to consumer and industrial products as well as services.
Cost Drivers– The globalization of the customer’s needs, as well as the chances for scale as well as standardizations, brings fundamentally post the economy of so many business sectors. The economy of the scale as well as experience effects, scope, and the exploiting difference in the factor values for the product developments, productions, and the sourcing into various parts globally would assume the greater significance as a determinant of the global strategies.
Competitive Industry–The industry features—like the degree to what the total sales of the industry are made-up by the exports or imports volumes, the diversities of the competitors as per the national origins of them, the extent to which the major fielders had globalized the operations as well as created the interdependence within the competitive strategy into various part globally too—also it may affect globalization potentials of the industries (Nandonde, 2019). Competitive diversity, interdependence, and high levels of trade increase the potential of that industry globalization.
The Amazon Company is very proficient based on the above analysis performed by the researcher; hence it can also be said that the topmost online e-commerce retailer is in the name of the Amazon Company only in a respective manner.
Government drivers—Like the absence or presence of the favorable policies of trade, technical standard, policies as well as regulations, also government handled or the subsidized competitor or even customers—may affect the other all components of the global strategies as well as therefore crucial to shape the competitive environments globally in the industry (Tuten, 2020). Multinationals so much relied exclusively upon the governments for negotiating the laws and rules in the global competition in the past.
2.2 Identification of the Porter Five Forces Model
The concept of Porter’s Five Forces implies a generalized method in which various organizational management analyzes and identifies its competition from the target market respectively. It generally draws from the economics perspective of industry intensity. It includes the analysis of suppliers, new entrants, buyers, and substitutes with respect to the company management respectively (Bonsu, 2019). In this section, the researcher has portrayed Porter’s Five Forces analysis irrespective of the Amazon Company mentioned below:
Bargaining power of suppliers [in a moderate mode]: The bargaining power of suppliers is generally dependent upon three major factors that include fewer suppliers population, forward of moderate integration, and suppliers size moderation. The components of suppliers in Amazon Company generally include components of hardware and software pieces of equipment with a degree of high influential level. Therefore, the supplier’s influence in Amazon Company is low to moderate level. The company has its upper hand over its designated suppliers respectively.
Bargaining power of buyers [in a strong mode]: The Amazon Company is highlight depends upon customer satisfaction and its objectives are generating high priority consumer value. The Amazon Company generally runs a centric of customer approach and duly promises that the product quality is of high-based quality and consumer-oriented. The Amazon Company has high bargaining power; as it has intense competition in the target market of the e-commerce industry.
The threat of new entrants [in a weak mode]: The threats of new entrants in the Amazon Company are excessively low. Setting up a new e-commerce online company duly requires a huge investment, large consumer servicing experience, set-up of logistics, and user-friendly website. Switching cost, scale economy, and customer loyalty are the three major factors of the Amazon Company irrespective of the threats of new entrants respectively.
As the Amazon Company has maintained and managed its strong brand image and loyalty in the target market, the threat of new entrants is quite very tough; as it needs to remove or directly compete with the Amazon Company in the target market segmentation (Cateora et al., 2020).
Threats of substitutes [in a strong mode]: The threats of substitutes with respect to the Amazon Company are very strong. As many consumers know that the company sells the common customer product and can be easily available in the market; the fear of threat appeared to be very high. The company does not sell any of the unique products; hence, this helps other competitors to display its demand based on the market demand and supply respectively.
Rivalry among present firms [in a strong mode]: The percentage of the firm’s rivalry is in a strong mode. From the past several years, there exist a number of players that have participated or entered in the target market segmentation with the small retailers like e-bay, flip kart and many more; this enables the Amazon Company to switch the cost based on the market demand and supply respectively (Christodoulou and Cullinane, 2019). Based on the online appropriate source, the Amazon Company invests a large sum of money in its different product variations; hence the rate can fluctuate from low to high or from high to low respectively.
2.3 Evaluation of the market forces impacting the competitive environment
Based on the above discussion, the researcher has displayed and highlighted the Amazon Company marketing tactics and the prevailing business environment. In this section, the researcher has discussed the identification and evaluation of the strong forces of market segmentation that duly affected the competitive environment. As far as the above explanation is concerned, the Amazon Company is performing in the target market in a very strong manner. The company Porter’s Five Forces analysis reflects that the Amazon Company is at the top-level position in terms of its suppliers and the buyers respectively.
Moreover, the researcher has also highlighted the matrix analysis and PESTEL analysis; based on which the micro and the macro-environmental concerns are being anticipated and measured. The Amazon Company’s main competitors are Flip kart, and concerning these aspects; the entire discussion is being made. Furthermore, the illustrated diagrams and the figures presented above are based on the latest online data source. Dragging to the consumer point of view, this analysis will make the reader properly understand that how the Amazon Company is performing and what are the different tactics that are being used by the company in order to grab and attract potential customers (Deepak and Jeyakumar, 2019).
In addition to these, the researcher has also presented the core reflection of Porter’s Five Forces of the Amazon Company with respect to the latest prescribed data respectively. Hence, it can be said that the company is performing very well and it has invested a lot of money in gaining the attention of its profound customers as well.
As far as the PESTEL analysis of the Amazon Company is concerned; the company is facing a lot of severe issues in the line of adapting the political culture in different country aspects respectively. The Amazon Company is very proficient based on the above analysis performed by the researcher; hence it can also be said that the topmost online e-commerce retailer is in the name of the Amazon Company only in a respective manner.
Conclusion
This is to conclude that the above report ends up with a wide discussion of the Amazon Company with its related marketing tactics and business environment. The researcher has used the detailed source in order to initiate this report more productive and meaningful with view prospects of the reader as well. This report covers the detailed framework of macro-environmental analysis, marketing tactics, strategic management, and used various intellectual models with respect to the company management respectively.
This report is the detailed conceptual framework of the business environment with respect to organizational management. In addition to these, the researcher has also provided an overview of the company description taken from the company website respectively. The reader after by viewing this report will understand the entire wholesome marketing tactics and techniques’ with respect to the mentioned company management.
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