Amazon.com PESTEL Anaysis
- Trade protectionism in the USA from the trump administration currently threatens the existence of foreign firms in the country (Diamond, 2017). While Amazon is an American firm, a considerable amount of its goods come from overseas, and thus its operations may be threatened by a possible reduction in the number of foreign imports or tariffs to foreign imports.
- In light of Brexit negotiations, the British and American government are currently holding discussions about potential trade deals between the two countries (Gilchrist, 2017). This could serve to ease Amazon’s operations in the UK as an American firm, potentially reducing import taxes and resulting in less regulations.
- Although critics of Amazon have stated that the firm is serving to reduce jobs with the implementation and use of technology to do jobs traditionally done by human resources, reports show that the firm is actually creating more jobs than it is cutting, with recent reports indicating the creation of additional jobs in both the USA and UK at new Amazon facilities (Vandevelde, 2017).
- Stock market uncertainty is an increasing characteristic of the globalised world and its levels of uncertainty, and Amazon’s expansion into the grocery sector further served to heighten this uncertainty, with competitors such as Walmart all facing drops in their share prices (Samson and Badkar, 2017).
- Economies such as that of the U.K. have traditionally been revered for their capitalist structures, however increasing research indicates that the traditional model capitalism no longer fits the purpose of the present business context (Bowman et al., 2014). Analysts have recently revered the Amazon way of capitalism as being the key to future productivity in growth, given that this is based on reinvesting gains back into new, market creating innovation and research (Denning, 2017).
- Increasing levels of obesity affect individuals across the globe, with 711 million people across the globe being classed as overweight and increasing pressure resting on Governments to encourage physical activity and a healthy lifestyle (Bedard, 2017). It could be argued that by extending its delivery services to the extent that customers can even have their groceries delivered to their doorstep, Amazon are encouraging the non-active lifestyles that are resulting in the obesity pandemic.
- In terms of logistics, increasing levels of technology are now a necessary requirement to efficiently and effectively deal with the demands of highly globalised, complicated and interconnected supply chains (Sindi and Roe, 2017). Amazon continue to develop high levels of technology to aid their logistics services, with 2017 seeing a new service called ‘Hub’ rolled out, which is a locker system that allows amazon deliveries to be dropped off even when the customer isn’t home; the first technology of this kind to be used for non-business customers in the online omnichannel retail field (London, 2017).
- Research and Development is of increasing importance for businesses wishing to remain innovative and retain their competitive advantage in terms of the highest levels of technology (Foss and Saebi, 2017). In a drive to expand their UK workforce to 24,000 by 2018, Amazon have recently announced that they will be doubling the amount of staff that they employ in their Research and Development centre in London, signifying that the company is focusing on increasing their technological proposition (Ruddick, 2017).
- With increasing pressure from governments being placed on large organisations to reduce organisational emissions, the question can be asked as to how Amazon can comply to regulations about the levels of emissions, given that a large part of their business relies on logistics and delivering products on a same-day basis (Gunther, 2016).
- Until 2016, Amazon had never published a sustainability report, leading to questions about the environmental impact that the organisation’s extensive global operations place on the wider environment (Gunther, 2016).
- At present, increasing pressure is placed on multinational corporations to risk assess their clients, and any politically sensitive clients or clients on terrorist watch lists should be sanctioned (Gov, 2016). Amazon is currently under federal investigation for selling goods to individuals on terrorist watchlists and violating US sanctions, showing a disregard to international law and safety (Daily Mail, 2017).
- Amazon has further come under fire from the Federal trade commission in the U.S. for producing misleading claims about pricing discounts on around 1000 products (Bartz, 2017).
- Bartz, D. (2017) ‘Deceptive Amazon discounts under investigation by Federal Trade Commission.’Independent. [Online] [Accessed on 30 July 2017] http://www.independent.co.uk/news/business/news/amazon-discounts-deceptive-federal-trade-commission-whole-foods-buy-out-prices-online-a7852516.html
- BBC. (2017a) ‘Amazon Prime makes first foray into South East Asia.’ [Online] [Accessed on 30 July 2017] http://www.bbc.co.uk/news/business-40736830
- BBC. (2017b) ‘Amazon profits fall sharply as it invests overseas.‘ [Online] [Accessed on 30 July 2017] http://www.bbc.co.uk/news/business-40748097
- Bedard, P. (2017) ‘Obesity becomes worldwide epidemic, US is the fattest.’ Washington Examiner. [Online] [Accessed on 26 July 2017] http://www.washingtonexaminer.com/obesity-becomes-worldwide-epidemic-us-is-the-fattest/article/2629712
- Boland, H. (2017) ‘Amazon shares shrink as profits fall 77pc.’ The Telegraph. [Online] [Accessed on 28 July 2017] http://www.telegraph.co.uk/technology/2017/07/27/amazon-boss-jeff-bezos-overtakes-bill-gates-worlds-richest-person/
- Bowman, A., Erturk, I., Froud, J., Johal, S., Law, J., Leaver, A., Moran, M. and Williams, K. (2014) The end of the experiment? From competition to the foundational economy. Manchester, UK: Manchester University Press.
- Daily Mail. (2017) ‘REVEALED: Amazon is under federal investigation for selling goods to someone on the terrorism list and possible US sanctions violations.’ Daily Mail. [Online] [Accessed on 30 July 2017] http://www.dailymail.co.uk/news/article-4743386/Amazon-investigated-selling-possible-terrorist.html#ixzz4oKcpcYnT
- Dastin, J. and Sadam, R. (2017) ‘Amazon profit plunges with breakneck investment in global expansion.’ The Independent. [Online] [Accessed on 30 July 2017] http://www.independent.co.uk/news/business/news/amazon-shares-latest-updates-profits-drop-investment-global-expansion-jeff-bezos-online-shopping-a7864156.html
- Deagon, B. (2017) ‘Amazon Cloud Services Under Growing Threat from Microsoft, Google, IBM.’ Investors. [Online] [Accessed on 30 July 2017] http://www.investors.com/news/technology/amazon-cloud-services-under-growing-threat-from-microsoft-google-ibm/
- Denning, S. (2017) ‘Apple, Google And Amazon: How to Understand Capitalism’s Future.’ Forbes. [Online] [Accessed on 31 July 2017] https://www.forbes.com/sites/stevedenning/2017/07/31/apple-google-amazon-how-to-understand-capitalisms-future/#5e96759a3fa0
- Diamond, J. (2017) ‘Striking protectionist tone, Trump touts US-made products.’ CNN. [Online] [Accessed on 27 July 2017] http://edition.cnn.com/2017/07/17/politics/donald-trump-made-in-america-showcase-protectionist-rhetoric//
- Foss, N. J. and Saebi, T. (2017) ‘Fifteen years of research on business model innovation: How far have we come, and where should we go?’ Journal of Management, 43(1), pp. 200-227.
- Gilchrist, K. (2017) ‘Here’s what could come out of the UK trade secretary’s meeting with Wilbur Ross.’ CNBC. [Online] [Accessed on 24 July 2017] https://www.cnbc.com/2017/07/21/wilbur-ross-liam-fox-trade-us-uk-deal-brexit.html
- Gov. (2016) ‘Sanctions, Embargoes and Restrictions.’ [Online] [Accessed on 30 July 2017] https://www.gov.uk/guidance/sanctions-embargoes-and-restrictions
- Gunther, M. (2016) ‘Can Amazon’s new ‘dream team’ fix the company’s sustainability reputation?’ The Guardian. [Online] [Accessed on 30 June 2017] https://www.theguardian.com/sustainable-business/2016/feb/02/amazon-sustainability-edf-epa-best-buy-walmart-apple-microsoft-csr-child-labor
- Law, J. (2017) ‘Amazon Development Centre Edinburgh devising and growing global innovations.’ City A.M. [Online] [Accessed on 30 July 2017] http://www.cityam.com/269426/amazon-development-centre-edinburgh-devising-and-growing
- London, A. (2017) ‘Amazon has launched ‘Hub’ – storage lockers for deliveries in your home.’ Tech Radar. [Online] [Accessed on 29 July 2017] http://www.techradar.com/news/amazon-has-launched-hub-storage-lockers-for-deliveries-in-your-home
- Ruddick, G. (2017) ‘Amazon to double the number of R&D staff in London.’ The Guardian. [Online] [Accessed on 30 July 2017] https://www.theguardian.com/technology/2017/jul/25/amazon-double-number-research-development-staff-london
- Sindi, S. and Roe, M. (2017) ‘The Evolution of Supply Chains and Logistics.’ In: Strategic Supply Chain Management (pp. 7-25). Springer International Publishing.
- Vandevelde, M. (2017) ‘Amazon is creating more jobs than it enjoys.’ Financial Times. [Online] [Accessed on 30 July 2017] https://www.ft.com/content/cf98680c-738f-11e7-aca6-c6bd07df1a3c