THE POLITICAL, LEGAL AND TECHNOLOGICAL

ENVIRONMENT OF AMAZON

1
 Term Paper on
“The Political, Legal and Technological environment of Amazon”
Course Code- “International Management” (MGT3201)

Submitted By:
Sakib Abdullah
ID- 18241047

Submitted to-
Dr. Sumayya Begum
Associate Professor
Department of BBA in Management Studies

BBA (Management) - 2018

Section – A
Department of Business Administration in Management Studies
Faculty of Business Studies
Bangladesh University of Professionals
Mirpur Cantonment, Dhaka-1216
Date of Submission- 30th October’ 2020

2
 Acknowledgement

Towards the starting, I want to pay our unassuming appreciation to the Almighty for giving us
the capacity to complete this assignment paper. This is an awesome joy for us to be allocated
under the direction of Assistant Professor Dr Sumayya Begum, Department of Management
Studies, Bangladesh University of Professionals (BUP). I am exceptionally thankful to her for all
sort of participation and direction in setting up this paper. Her important proposals and rules
helped me a great deal to set up this paper in an appropriate and formal way.

At long last, I might want to thank every one of those individuals who have shared their
perspectives, gave fundamental information, and complimented us moreover. This affirmation is
insufficient to let them know how significant the effect of their conclusion is on this plan, that we
are so obliged to them. I express my heartiest gratefulness to every one of them.

3
 Letter of Transmittal

30th October, 2020

Dr. Sumayya Begum

Associate Professor,

Department of Business Administration in Management Studies

Faculty of Business Studies

Bangladesh University of Professionals

Subject: Submission of Term Paper

Dear Ma’am,
With due respect, I would like to humbly submit the Term Paper on “The Political, Legal and
Technological Environment of Amazon” which is prepared as a partial requirement of the
course named “International Management” (MGT3201) of BBA program under Department of
Management Studies of the Faculty of Business Studies, Bangladesh University of Professionals.
Within the constraints as a student I tried my level best to do this term paper according to your
guidance and with the highest accuracy possible by me.

I feel very joyous to have this opportunity to prepare this paper under your guidance. This has
been an enormous opportunity for me to realize my dreams and learn about preparing a business
plan. I must mention here that I am extremely thankful to you for your valuable guidance,
support, patience, tiresome effort, and constant attention whenever required.

Sincerely,

Sakib Abdullah
ID-18241047
Section-A
BBA in Management 2018

4
Table of Contents

1. Executive Summary 6
2. Introduction 7
2.1 Mission and vision 7
statements
3. Objectives of this study 8
4. Methodology 8
5. Literature review 8-11
5.1 Political Environment 8
5.2 Legal and regulatory 9
environment
5.3 Technological environment 10
6. Chapter 1: Political Environment of 12-13
Amazon
7. Chapter 2: Legal and regulatory 14-15
environment of Amazon
8. Chapter 3: Technological environment 16-18
of Amazon
9. Recommendations 19-20
10. Reference 21

5
1.0 Executive Summary
The following paper has been prepared in order to uphold the political, legal and technological
environment of a business, how it impacts, the problems faced and the respective ways to bypass.
All portrayed with utmost diligence, so that the message stays clear and informative. The
company that is used here is the world’s largest ecommerce site, none other than, Amazon. As
one of the largest players in the global market for information technologies and related online
services, the company enjoys the benefits of extensive market reach, high capitalization, and
high popularity. However, the online market is dynamic and continually presents new challenges
for Amazon. Maintaining resilience and competence in addressing such challenges is essential to
fulfilling Amazon.com Inc.’s corporate mission and vision statements. In the past few years, the
retail industry has seen exponential growth. E-retail has taken the lead and leading the e-retail
saga is Amazon. Jeff Bezos has left no stone unturned to make Amazon the most successful e-
retailer. Currently, he is trying to add fire to Amazon’s game in Asia. Now that the recession is
over, the customers are spending more on retail items and by 2020 the entire retail industry is
expected to have grown to $28 trillion. Apart from economic factors, technology has also
boosted the growth of the e-retail sector. 

6
2.0 Introduction
Amazon.com based in Washington and found by Jeff Bezos in 1994 is global leader in e-
commerce and it was the first company to introduce the concept of selling goods on the Internet.
Initially Amazon.com started as an online bookstore and its success led Amazon to diversify into
other products such as gifts, music, electronics, groceries, toys and many more. Probably today
there is no product that Amazon.com doesn’t sell. Amazon.com has developed different internet
portal sites for different countries such as Canada, UK, Germany, France, China and Japan.

Amazon.com was named after world’s largest river Amazon and was assigned with a logo of an
arrow starting from A to Z representing the customer satisfaction as the highest priority and fill
their store houses with every product in the alphabet.

Amazon.com was open for trading under NASDAQ with a symbol AMZN for the first time on
15 may, 1997 by issuing initial public offering at a price of US $ 18/share.

Amazon.com in its early stages was not very successful and did not produce any profits, which
made investors rethink about their portfolio, major business and process restructuring was
required; they had to cut down their costs to increase the profits and were tied up from
diversifying into more products, however Amazon.com survived the “dot com bubble” in 2000
which was the core reason for many e- businesses to close down and this was the turning point
for Amazon.com after which they finally in the fourth quarter, 2001 they made their first profit
which generated revenues of more than a billion$ and $ 5million profits in just 1 quarter. This
led Amazon.com to prove to the world that their business model was profitable and also, they
popularized online shopping which was recognized by time magazine and awarded Jeff as the
business person of the year.

2.1 MISSION & VISION STATEMENTS

Amazon.com vision:

“Our vision is to be earth’s most customer centric company; to build a place where people can
come to find and discover anything they might want to buy online.” (Amazon.com, 2010)

Above statement reflects that amazon.com wants to be global leader in e-retailing business by
providing the quality products at affordable price using latest technology to build the customer
database and gain their loyalty towards the brand; thereby catering to the stakeholder’s interests
and generating profits to the company. Expand themselves all over and build a virtual market
place where customers can shop comfortably from at home.

7
3.0 Objectives of this study

The aim of this study is simple. The objective firstly includes finding the current situation in
Amazon’s Political, Legal and Technological environment. The goal is to discuss how these
factors create an impact and how Amazon overcomes all these. Identify what makes them so
unique and put some recommendations to cover the situation.

4.0 Methodology

Due to the ongoing global pandemic, primary data collection was not possible for this study,
which is why resort to collecting secondary data was taken. This study is based on secondary
data, which was collected from various journals, newspaper articles and relevant research papers.
Literature of this paper is enriched with various articles, websites, magazines and journals. One
of the major impediments while conducting this paper was the inability to collect primary data,
which is why also no survey was conducted firsthand for this study. A theoretical approach was
undertaken to conduct research on this topic.

5.0 Literature Review

5.1 Political Environment
The political external factor is defined as how government policy affects a field (“Oxford
College”, 2016). Research on trails and their relationship to policies and government intervention
is sparse. Current research mainly explores the role of government officials in policy making
around the development of trails. Irwin (2002) studied how preservation policies should be
created for designing open space to fully optimize benefits of residential property values. Gnagey
and Grijalva (2016) also researched open space, but specifically looked at how the value of
outdoor recreation should be used to inform zoning, restrictions, and government purchases.
Olafsson and Petersen (2014) studied how local government should utilize various tools when
planning outdoor recreation spaces, including GIS technology. Because current literature mainly
focuses on policies and government planning, additional research needs to be conducted in this
area. The study fields include some noteworthy ideologies. These are,
Ideologies

Individualism

Individualism – adopters of individualism adhere to the philosophy that people should be free
to pursue economic and political endeavors without constraint. This means that government
interest should not solely influence individual behavior.

Collectivism

Collectivism – the political philosophy that views the needs or goals of society as a whole as

8
more important than individual desires.

Socialism

Socialism –a moderate form of collectivism in which there is government ownership of

institutions, and profit is not the ultimate goal.

 Communism is an extreme form of socialist thought which was realized through violent
revolution and committed to the idea of a worldwide communist state.
 Social democracy is a social movement that achieved its goals through nonviolent
revolution.

The domestic and international political environment has a major impact on MNCs. As
government policies change, MNCs must adjust their strategies and practices to
accommodate the new perspectives and actual requirements. Moreover, in a growing number
of geographic regions and countries, governments appear to be less stable; therefore, these
areas carry more risk than they have in the past.
Political Systems
1) Democracy –a political system in which the government is controlled by the citizens
either directly or through elections. A democratic society cannot exist without at least a
two-party system.
2) Totalitarianism –a political system in which there is only one representative party which
exhibits control over every facet of political and human life. Power is often maintained
by suppression and opposition.

5.2 Legal and regulatory Environment

The legal factors are identified as any topic relating to health and safety, as well as any
restrictions, and regulations put in place by an organization (“Oxford College”, 2016). Safety
was a topic of concern noted by local home owners in current studies. Research shows that
property owners living adjacent to public trails are concerned with decreased privacy, increased
noise, and also a decrease in perceived safety, which are all considered legal factors (Corning,
Mowing, & Chancellor, 2012; Crompton, 2001). However, most homeowners stated that the
benefits of living next to trails outweighed any negative aspects or concerns they were having
(Corning, Mowing, & Chancellor, 2012; Crompton, 2001). Further research should be conducted
to determine what other legal issues or concerns exist when managing trails.
There are four foundations on which laws are based around the world.

1. Islamic Law - This law is derived from interpretation of the Qur'an and the teachings of
the Prophet Mohammed. It is found in most Islamic countries in the Middle East and
Central Asia.
2. Socialist Law - This law comes from the Marxist socialist system and continues to

9
 influence regulations in former communist countries.
3. Common Law - This law comes from English law, and is the foundation of the legal
system in the United States, Canada, England, Australia, New Zealand, and other nations.
4. Civil or Code Law - This law is derived from Roman law and is found in the non-Islamic
and nonsocialist countries such as France, some countries in Latin America, and even
Louisiana in the United States.

Basic Principles of International Law

1) Sovereignty and Sovereign Immunity - The principle of sovereignty holds that

governments have the right to rule themselves as they see fit.
2) International Jurisdiction - International law provides for three types of jurisdictional
principles:
i) Nationality Principle
ii) Territoriality Principle
iii) Protective Principle
3) Doctrine of Comity – The doctrine of comity holds that there must be mutual respect for
the laws, institutions, and government of other countries in the matter of jurisdiction over
their own citizens.
4) Act of State Doctrine - Under the act of state doctrine, all acts of other governments are
considered to be valid by U.S. courts, even though such acts are illegal or inappropriate
under U.S. law.
5) Treatment and Rights of Aliens - Countries have the legal right to refuse admission of
foreign citizens and to impose special restrictions on their conduct, right of travel, where
they can stay, and what business they may conduct.
6) Forum for Hearing and Settling Disputes - This is a principle of U.S. justice as it
applies to international law.

5.3 Technological Environment

Technological factors are outlined as any technological invention or development that impacts
the organization (“Oxford College”, 2016). Various authors discuss how a variety of
technological marketing tools greatly affect trail users. Mitchell, 6 Purcell, Rainie, and
Rosenstiel (2011), and Clark, Bungum, Meacham, and Coker (2015) suggest that using multiple
sources of information such as providing print and electronic materials is more effective than
using single sources of information. In addition, demographics affect how people learn about
trails. Age is one of the most influential demographics when it comes to how people find out
about information in their community. If someone is under forty years old, they will find out
information from the Internet first, whereas older age cohorts tend to learn through print sources
first (Mitchell, Purcell, Rainie, & Rosenstiel, 2011; Clark, Bungum, Meacham, & Coker, 2015).
This study will seek to further understand how technology is used to manage trails, and what
implications or impacts it creates.
Technology trends affect businesses on many levels. When an employee is efficient, he turns out
to be productive. Additionally, when a business is more in touch with its present and potential

10
customers, the more chance it has to build a strong customer loyalty base. Advancement of
technology can make this possible. Strategic leaders are constantly looking for development and
updates within the technological environment. In this way, they not only improve their
operations but, they will also be well aware of business transformational phase. They will derive
groundbreaking strategies to grow exponentially.

Trends in Technology, Communication, and Innovation

 The innovation of the microprocessor is the foundation for most technological and
computing advances in the world today.
 One Laptop Per Child (OLPC) is a U.S. nonprofit organization aimed at putting an
affordable educational device in the hands of the world’s poorest children.
 World connectivity is threatened by possible disruptions to the underground and
underwater cables that powers the network.

Biotechnology

1) Biotechnology is the integration of science and technology to create agricultural or

medical products through industrial use and manipulation of living organisms.
E-Business

1) As the Internet becomes increasingly common, it is having a dramatic effect on

international commerce. Internet penetration rates for major world regions are shown in
Table 2-2 in the text.

Telecommunications

1) One of the most obvious dimensions of the technological environment facing international
management today is telecommunications. Developing countries are especially interested
in attracting telecommunications firms.

Technological Advancements, Outsourcing, and Offshoring

As MNCs use advanced technology to help them communicate, produce, and deliver them
goods and services internationally, they face a new challenge: how technology will affect
the nature and number of their employees. In the future technology has the potential to displace
employees in all industries, from low-skill jobs to knowledge work. The new technological
environment has both positive and negatives for MNSs and
societies as a whole

11
6.0 Chapter 1: Political Environment of Amazon

The political environment of business refers to the political or government actions that impact
business operations. The political factors usually go hand in hand with the legal ones and are
generally viewed as the non-market forces that impact businesses. Political decisions ultimately
affect the economic, social and cultural environments as a whole.

This subject can be studied in terms of the central government, the citizens of a country, rules,
and regulations or international relations. Examples of political factors related to the central
government of a country are levels of bureaucracy, corruption, and government stability. A
culture of corruption in a country stifles business operation by creating an unlevel playing field
where corrupt individuals are more empowered to advance their business goals than their non-
corrupt counterparts. A highly unstable government is unable to offer businessmen the security
they need to trade peacefully, hence a highly volatile trading environment. Examples of political
factors tied to international relations are policies on trade tariffs, policies on importation and
exportation of goods and services and international trade agreements.
The hurdles before e-businesses are not the same as the traditional businesses. Still, there are risk
factors that affect the e-retail sector. Amazon is the leader in this sector and it is affected by
several political factors. Even for the E-businesses like Amazon and E-bay red tape in the Asian
countries can be a big problem. A news report published by Hindustan times highlighted that for
any foreign firm trying to do business in India, Red tape and regulatory issues could be a major
headache.  Taxes and other political issues too are a costly affair. The EU has started targeting
the American technological firms and for disputable reasons. While Google was targeted by the
EU on anti-trust related issues, Amazon is also being targeted over its e-book deals with EU
publishers. These political issues are not limited because there are other problems too that have a
political origin. Political stability also leads to economic stability. On the other hand, political
disruption can disrupt the supply chain and result in reduced sales.

Political Factors

Political factors play a significant role in determining the factors that can impact Amazon.com,
Inc.'s long term profitability in a certain country or market. Amazon.com, Inc. is operating in
Catalog & Mail Order Houses in more than dozen countries and expose itself to different types
of political environment and political system risks. The achieve success in such a dynamic
Catalog & Mail Order Houses industry across various countries is to diversify the systematic
risks of political environment. Amazon.com, Inc. can closely analyze the following factors
before entering or investing in a certain market-

12
  Political stability and importance of Catalog & Mail Order Houses sector in the country's
economy.
 Risk of military invasion
 Level of corruption - especially levels of regulation in Services sector.
 Bureaucracy and interference in Catalog & Mail Order Houses industry by government.
 Legal framework for contract enforcement
 Intellectual property protection
 Trade regulations & tariffs related to Services
 Favored trading partners
 Anti-trust laws related to Catalog & Mail Order Houses
 Pricing regulations – Are there any pricing regulatory mechanism for Services
 Taxation - tax rates and incentives
 Wage legislation - minimum wage and overtime
 Work week regulations in Catalog & Mail Order Houses
 Mandatory employee benefits
 Industrial safety regulations in the Services sector.
 Product labeling and other requirements in Catalog & Mail Order Houses

Political Stability

Political stability can affect Amazon e-commerce business. For example, the political stability of
developed countries like Australia gave Amazon.com an opportunity to expand its business in
the region. Even a stable political government can create threats for a company. The European
Union is investigating Amazon.com regarding the use of retailers’ data who sell on Amazon
Marketplace. If the regulators found Amazon guilty it can face severe consequences. Such
political issues are affected Amazon brand image and profitability at the same time.
Another political factor that is worth mention is the government laws for e-commerce businesses.
For example, few months back the Indian government stopped Amazon and Flipkart for
selling products of those companies they have equity stakes. Government supports companies
like Amazon due to their huge investments but it still has to comply with government laws and
regulations which is sometimes very difficult. However, this political factor becomes a threat
when its supports other companies in the industry. For example, in China government support
Chinese e-commerce companies to flourish their businesses.
Other external environment factors that can affect Amazon Inc. is cybercrime. If any government
what to improve the e-tailing business environment it must fight against cybercrime. This can
create an opportunity for the businesses.

Reports relating to how the political environment on different countries or international that
affect amazon:

13
  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.
 Distributing and expanding into Asian countries can also be “off limits”, even to a
company as expansive and influential as Amazon. Chinese companies rise to compete
against Amazon, expanding their services to the public, making it easier for them to
prosper while Amazon’s services are shoved to the wayside.
 France has a specific government plan named “plan très haut débit” in which the French
government wants to accelerate the 4G and optical fiber network deployment. This kind
of political decision facilitates the access to the Internet, so to all services based on the
Internet (e-business included).

7.0 Chapter 2: Legal Environment of Amazon

The Legal Environment of Business introduces us to the role of legal agendas in managerial
decisions. It helps managers in the operation of their business and allows them to know the
limits and boundaries of there being in the name of their respective firms.

It makes their decisions apt to the legal system. These regulations assist the business enterprise
to be under the scope of Law and government's regulations. Companies, firms, managers,
owners, and their share or debenture holders endeavor the operation to help and protect the
rights.

They also get bind into several legal tenures that cope up to legal liability and legal
consequences from their decisions and actions. One might think that the business environment
consists of just the legal system and its processes. Nut the fact of the matter is that these also
cover up several sources of law of our society.

It requires comparison and an in-depth study of various aspects related to the legal rules of
business. The legal terms that relate to it are tort law, contract law, and criminal Law and
government regulatory mechanisms. 

At last, the legal environment helps to make the business decisions that are ethical and are in
hand with the welfare of society. To put in simple terms, everything that is related to the welfare

14
of any registered parties which can be among, owner, the business itself, equity shareholders,
creditors, debtors, debenture holders or any third-party that is bound in a legal contract with the
company itself, come under the term of the legal environment.
Legal compliance is also just as important for businesses globally. In any aspect of business, it is
important for big brands like Amazon to remain compliant with law. Amazon has a separate
legal team to oversee the legal issues and challenges. Apart from labor laws, there are other
several areas where legal compliance is essential. Any tussle with law can be very costly for big
companies like Amazon. Any mistake can result in big fines and a loss of image. As a result,
from labor to sustainability, there are several areas where Amazon has to deal with significant
legal challenges. Laws can differ from nation to nation and companies have to remain compliant
without any excuse. So, law can be a major pressure for any company that is operating
internationally. Amazon too has to remain cautious.

There are certain legal factors that Amazon needs to measure and has counter measures against
those, so that the overall business progresses seamlessly. these are, stated below:

 Many Countries around the world has strict rules and regulations for business. It is
always difficult to follow these rules especially for companies like amazon that are used
to open markets like USA and EU.
 Furthermore, Amazon will have to keep on product they offer because customers in USA
and EU are increasingly becoming concerned with products that were made by workers
in China and Bangladesh who are offered vey low wage for their work.
 Counterfeit product regulations are necessary and demand of the consumers. This can be
considered as an opportunity for amazon to increase its efforts to minimize the
counterfeit sales on e-commerce platform. Amazon has already an Anti-counterfeit policy
in placed. Every product offered by sellers on amazon platform must be authentic. The
sale of such type of products is strictly prohibited.
 There are different Consumer Privacy Acts that could create a threat in the macro
environment of Amazon. California Consumer Privacy Act 2018 is one of them and will
take effect from 2020. Giant Tech Companies like Amazon, Apple and Facebook will be
required to inform users what type of data they collect and how they share or use this
data.
 Another legal factor is EU GDPR (General Data Protection Regulations) affects Amazon
and all those companies who collect customer data like name, emails and bank
information. All the consumer data must be protected. The European Union launched an
investigation and fined Google and Facebook. This is considered a huge threat to
Amazon.

A firm should carefully evaluate before entering such markets as it can lead to theft of
organization’s secret sauce thus the overall competitive edge. Some of the legal factors that
Amazon.com, Inc. leadership should consider while entering a new market are -

 Anti-trust law in Catalog & Mail Order Houses industry and overall, in the country.
 Discrimination law

15
  Copyright, patents / Intellectual property law
 Consumer protection and e-commerce
 Employment law
 Health and safety law
 Data Protection

Some reports showing how Super Giants like Amazon faces legal and regulatory issues, which
are somewhat inevitable. These are,

 That, put simply, is the explanation for Amazon’s announcement of seriously big
increases in minimum wages for its workers in the US and Britain. On the other side of
the Atlantic, no worker will be earning less than $15 (£11.50) an hour – double the
federal minimum. Here, the minimum has been raised by 28% for workers in London and
18% for those in the rest of the UK.
 Philip Hammond’s threat to impose a unilateral digital sales tax on companies such as
Amazon in the absence of a global deal to force them to pay more.
 Amazon is struggling to fill vacancies as the labor market tightens. In Britain and the US,
unemployment is about 4%, meaning workers – even deionized workers – have more
freedom to change job if they are unhappy. And, to say the least, Amazon is not a model
employer.
 Workers will be getting higher wages because of strong campaigning, skillful PR and the
channeling of populist anger.
 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).

8.0 Chapter 3: Technological Environment of Amazon

Technology trends affect businesses on many levels. When an employee is efficient, he turns out
to be productive. Additionally, when a business is more in touch with its present and potential
customers, the more chance it has to build a strong customer loyalty base. Advancement of
technology can make this possible. Strategic leaders are constantly looking for development and
updates within the technological environment. In this way, they not only improve their
operations but, they will also be well aware of business transformational phase. They will derive
groundbreaking strategies to grow exponentially. Technology hugely dictates the way many
things are done, in business or otherwise.
Examples
General examples of Technological Factors affecting business include:

16
  The existence of 3D technology
 Computer calculation speed/power
 The ability of computers to create truly ‘random’ numbers
 Engine efficiency
 Internet connectivity
 Wireless charging
 Automation
 Security in cryptography
Over the past 20 years, Amazon has developed from a small seller working from a garage in
Seattle, to a global company with 300 million worldwide active customer accounts. In Europe
alone, we have a thriving network of 40 fulfilment centers in seven countries. In 2015, we
shipped over one billion units to our many customers across Europe.

Technology is the backbone of Amazon. Technology made amazon one of the most profitable
company in the globe. Amazon is looking to use technology to the fullest for the delivery
systems. Amazon Prime Air is a new future delivery system to deliver packages to consumers
using Unnamed Aerial Vehicles also known as drones. Amazon is working with different
regulatory authorities to comply their requirements and design a sound air traffic management
system.
Cybercrime is a threat to Amazon. The whole business model is on stacks. Amazon consumers
and third-party sellers have concerns about their sensitive data like credit card and debit card and
any personal / confidential information stored on Amazon website. In this amazon pestle analysis
cybercrime is a real threat to Amazon. According to CJ Rosenbaum, A Lawyer who is working
for Amazon sellers, said that his several clients informed him that they were hacked and lost
their monthly sales.

Technology obsoletes with the passage of time and amazon is facing the same issues which
pressurize it to regularly work on technological assets. All the investments in information
technology creates a competitive advantage for amazon.

They rely heavily on varying degrees of technology to distribute their products to customers.
They’re experimenting with new and creative ways for customers to receive their packages. In
2017, Amazon began testing their new initiative: drone deliveries. It’s not as easy as it sounds.
They must comply with government regulations to allow the use of drones in this way. But a
major obstacle is how these drones can actually deliver these packages to the customer.

The idea is there. The implementation is quite far off, if it ever makes it off the ground (pun
intended). But it does show that Amazon is considering new methods of shipping, clearly
displaying their creativity and technological knowledge. That said, if this were to come into play,
it could rip jobs away from even more people, since the drones will be carrying all the hard
work.

In the meantime, Amazon has doubled their staff in their UK-located Research and Development
center. It’s clear the intention is to discover and manage new technological advancements to
keep their customers happy while also improving logistics behind the scenes.

17
They also use digital technology to build relationships. Amazon emails customers with
reminders to buy products they’ve left behind. How this works: Once you sign up for an account,
Amazon may send you information about purchases you looked at but didn’t buy. They’ll also
mention similar products that might hit the mark the other products missed. Basically, they’re
hoping you’ll buy products other people have.
They also offer 24-hour live chat support. Have a problem with your package? Never received it?
The customer representatives are there to keep you, the customer, happy. Whether that means a
refund or a product exchange, there’s always someone to talk to at Amazon. You can even do
this job from home, so long as you have reliable internet.

Some reports portraying the outstanding impact of technology on amazon:

 In terms of logistics, increasing levels of technology are now a necessary requirement to

efficiently and effectively deal with the demands of highly globalized, 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 center in London, signifying that the
company is focusing on increasing their technological proposition (Ruddick, 2017).

Recent Examples of Amazon integrating new technologies in their workplace:

 cutting-edge technology into our fulfilment centers to assist our employees in their roles
and deliver for our customers.
 Introducing the SLAM process (Scan, Label, Apply, Manifest), which was developed by
Amazon and remains a revolutionary innovation for customers because it speeds up the
packing process and helps ensure accurate deliveries.
 introduction of Amazon Robotics in the UK- is the newest example of this commitment
to invention in logistics on behalf of our employees and our customers.
 acquisition of warehouse robotics company Kiva,  Amazon was able to optimize its
warehousing systems to cut costs and increase its capability. In 2014, Amazon installed
more than 15,000 robots in its US warehouses to prepare for the holiday season.
 Automate business processes, from production through to support functions like
performance management and finance.
 Paperless software systems, this will eliminate waste and repetitive processes, meaning
the business can redirect this capital to core functions or new ventures.

18
9.0 Recommendations-

For Political Environment

Amazon.com Inc. operates alongside political influence. In Amazon’s case, the following
political external factors are important in the development of the e-commerce industry:

1. Political stability of developed countries, especially the U.S.A. and European countries
(opportunity)
2. Governmental support for e-commerce (opportunity & threat)
3. Increasing governmental efforts on cyber-security (opportunity)

Amazon benefits from political stability. For example, Amazon could expand its brick-and-
mortar operations in the United States to complement its e-commerce business. On the other
hand, the external factor of overall governmental support for e-commerce is also an opportunity.
Such governmental support facilitates Amazon’s continuing expansion in relevant markets.
However, the same external factor threatens the company because of rising competition, such as
that involving Chinese online retail firms that are expanding their operations. Nonetheless,
governments present improved business conditions through efforts in fighting cybercrime.

For Legal and regulatory environment

Amazon.com Inc.’s e-commerce operations must adhere to legal requirements. In Amazon’s

case, the following legal external factors are significant:

1. Rising product regulation (opportunity)

2. Changing import and export regulations (opportunity)
3. Rising environmental protection regulations on businesses (opportunity)

Rising product regulation is seen as a result of societal demands on consumer safety and
customer security. Also, the company has opportunities to grow, based on the external factor of
changing import and export regulations. For example, Amazon can expand its global operations
to exploit the increasing ability of sellers to access overseas suppliers. Moreover, the e-
commerce company has opportunities to strengthen its brand image through appropriate
corporate social responsibility policies that address rising environmental protection regulations.
Such effort can increase business competitiveness in the remote or macro-environment.

 No standard regulations governing e-retailing covering entire globe. Eg. Federal trade
commission in USA and data protection act in UK.
 Should be well aware of both domestic and international legal laws.
 European E-retailing directive
 Could impact the cross-continental growth of e-retailing considering strict regulations
 The invention of electronic signatures Law.

19
  Removes traditional legal methodologies and instate more secure and transparent legal
environment.

For Technological Environment

Technological advancement directly affects Amazon, considering the centrality of technology in

its business. The technological external factors important in Amazon.com Inc.’s business are as
follows:

1. Rapid technological obsolescence (threat & opportunity)

2. Increasing efficiencies of IT resources (opportunity)
3. Increasing rates of cybercrime (threat)

Amazon.com Inc. faces the threat of rapid technological obsolescence, which imposes pressure
on the company to continuously develop its technological assets. For example, the corporation’s
continued heavy investment in information technology can boost its competitive advantage and
protect the business from new entrants in the e-commerce industry. Amazon also has
opportunities to further improve its performance based on the rapid increase of IT resource
efficiencies. For instance, new computing technologies can maximize online retail productivity
and minimize operational costs. However, the company also faces the constant threat of
cybercrime. This external factor threatens the quality of customer experience as well as the
integrity of Amazon’s business. Thus, significant investment in appropriate technological
measures is critical to the company’s long-term survival despite technology-related issues in the
industry’s remote or macro-environment.

20
10.0 Reference-

 UKEssays. (November 2018). A business analysis project for Amazon.com. Retrieved

from https://www.ukessays.com/essays/marketing/a-business-analysis-project-for-
amazon-com-marketing-essay.php?vref=1
 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
 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
 Bernroider, E. (2002). Factors in SWOT Analysis Applied to Micro, Small-to-Medium,
and Large Software Enterprises: An Austrian Study. European Management
Journal, 20(5), 562-573.
 Jackson, S. E., Joshi, A., & Erhardt, N. L. (2003). Recent research on team and
organizational diversity: SWOT analysis and implications. Journal of
Management, 29(6), 801-830.
 Gillespie, A. (2007). PESTEL analysis of the macro-environment. Foundations of
Economics. Oxford University Press, USA.
 Housing Industry Association (2011). An Introduction to PESTLE Analysis.HIA Ltd.

21