Amazon PESTEL Analysis

  • 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).