Amazon is currently the largest firm in the online retail market (Greenspan, 2017). Given the dynamic and fast paced nature of the industry, it is essential that Amazon maintain a high level of resilience and innovation as well as take into consideration and address multiple macroenvironmental factors to stay ahead. To assess how well the company is adapting to different conditions we can use a tool called the PESTLE analysis model. The acronym PESTEL stands for “Political, Economic, Social, Technological, Environmental and Legal Factors” (PESTEL, n.d) and is a tool used to identify the factors that shape a company’s environment.
Political
This aspect of the model takes into account whatever government influences may affect the company. Some …show more content…
Amazon.com Inc. must deal with the pressure to remain on the cutting edge of technology. Rapid technological obsolescence and the creation of destructive technologies creates an environment where Amazon must constantly evolve and improve the technological aspects of the company. Although this can be expensive and does pose some threat to the company it also creates an opportunity as to survive in its environment the business’ operations will be optimised which can help keep them ahead of the competition. Regarding staying ahead of the competition there is also opportunities for Amazon to increase its overall performance by utilising the increase of IT efficiency. More efficient IT systems can lead to reduced costs which will in turn lead to increased revenue for the company. Another negative factor affecting Amazon as an online retail company is the threat of cybercrime. Cybercrime can affect the integrity of the company and, perhaps even more threatening to the company, it can cause customers to have a negative experience which could lead to them abandoning the online retailer all together and this will ultimately lead to a fall in revenue. To avoid this Amazon is forced to make very large investments in its security measures against cybercrime or risk not being able to survive in the
Political
This aspect of the model takes into account whatever government influences may affect the company. Some …show more content…
Amazon.com Inc. must deal with the pressure to remain on the cutting edge of technology. Rapid technological obsolescence and the creation of destructive technologies creates an environment where Amazon must constantly evolve and improve the technological aspects of the company. Although this can be expensive and does pose some threat to the company it also creates an opportunity as to survive in its environment the business’ operations will be optimised which can help keep them ahead of the competition. Regarding staying ahead of the competition there is also opportunities for Amazon to increase its overall performance by utilising the increase of IT efficiency. More efficient IT systems can lead to reduced costs which will in turn lead to increased revenue for the company. Another negative factor affecting Amazon as an online retail company is the threat of cybercrime. Cybercrime can affect the integrity of the company and, perhaps even more threatening to the company, it can cause customers to have a negative experience which could lead to them abandoning the online retailer all together and this will ultimately lead to a fall in revenue. To avoid this Amazon is forced to make very large investments in its security measures against cybercrime or risk not being able to survive in the