Question

consider the following factors: social,economic,technological,legal,and demographics. for amazon company

Answer 1

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.
Economic Factors
Amazon’s performance certainly depends on the situation of the economies where it operates its online and non-online businesses. The effects of economic trends and changes on the remote or macro-environment are considered in Economic factors. In the case of Amazon.com Inc., the following economic external factors are significant:
1. Economic stability of developed markets, especially the U.S. and European countries (opportunity)
2. Increasing disposable incomes in developing countries (opportunity)
3. Potential economic recession of China (threat)
The economic stability of developed countries increases the likelihood of success for Amazon.com Inc. Based on the analysis, this situation minimizes economic issues in the remote or macro-environment, thereby minimizing risks to the company’s online retail business expansion. Amazon also has growth opportunities in developing countries. For example, the increasing disposable incomes in developing markets can boost the company’s financial performance. However, the potential economic recession of China threatens Amazon’s business. China is one of the biggest markets that the company hopes to increasingly penetrate. Based on the external factors in this aspect of analysis of Amazon.com Inc., opportunities for growth in developing countries must be included in the company’s strategy formulation.
Social Factors
Social conditions are a determinant of Amazon.com Inc. This aspect of analysis identifies the impact of sociocultural changes or trends on the company’s performance as a leading online retailer and provider of information technology goods and services. Considering such trends in the remote or macro-environment, Amazon faces the following sociocultural external factors:
1. Increasing wealth disparity (threat)
2. Increasing consumerism in developing countries (opportunity)
3. Increasing online buying habits (opportunity)
The increasing wealth disparity refers to the increasing gap between the rich and the poor in many countries. This analysis considers such a sociocultural trend a threat against Amazon.com Inc. in terms of the potential stagnation of disposable income levels and the corresponding stagnation of the remote or macro-environment of the industry. Higher disposable income levels are more favorable in increasing the e-commerce company’s potential revenues. In addition, an increasing degree of consumerism creates opportunities for growing the e-commerce and IT services business. For example, higher consumerism in developing markets increases the potential success of Amazon.com Inc.’s generic strategy for competitive advantage and intensive strategies for growth, as the company looks to expand its global online retail operations in these locations. In relation, the company stands to benefit from increasing online buying habits, as more people around the world prefer to buy products through the Internet. The external factors in this aspect of the analysis of Amazon indicate the benefits of focusing on market penetration and expansion in developing countries.
Technological Factors
Technological advancement directly affects Amazon, considering the centrality of technology in its business. The consequences of technologies and related trends on the remote or macro-environment are covered in this aspect of the analysis of the e-commerce company. 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. However, in the context of this analysis, such a condition is also an opportunity in optimizing the business. 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. Based on this aspect of the analysis of this factor, Amazon needs to emphasize continuous improvement of its technologies.

Legal Factors
Amazon.com Inc.’s e-commerce operations must adhere to legal requirements. The effects of regulations on the remote or macro-environment are determined in this aspect of the analysis of e-commerce. 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. In this analysis framework, this external factor creates opportunities for Amazon.com Inc. to intensify its efforts in reducing counterfeit sale on its online retail website. 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. Based on this aspect of the analysis, Amazon can ensure long-term e-commerce success through regulatory compliance.
Demograhic Factors
Even though Amazon.com Inc. is mainly an online business, its operations are subject to the influence of the natural environment. This aspect of the analysis presents how the company’s remote or macro-environment relates with ecological changes. Amazon considers the following ecological external factors in its strategic formulation:
1. Rising interest in environmental programs (opportunity)
2. Rising emphasis on business sustainability (opportunity)
3. Increasing popularity of low-carbon lifestyles (opportunity)
Amazon has opportunities to improve its environmental impact in response to the rising interest in environmental programs. Such interest is a direct consequence of ecological challenges, such as waste management and energy consumption. Based on this external factor, an improvement in Amazon.com Inc.’s corporate social responsibility strategy could enhance the company’s environmental impact. In relation, this analysis notes major opportunities in the area of business sustainability. For example, higher sustainability standards can further improve environmental impact and strengthen the brand image of the e-commerce organization, based on the business strengths identified in the SWOT Analysis of Amazon.com Inc. Furthermore, the increasing popularity of low-carbon lifestyles provides opportunities for the company to boost its corporate image as a leader in the e-commerce industry. The company could implement extensive energy-saving policies in its operations for this purpose. This aspect of the analysis of Amazon shows the significance of a comprehensive corporate social responsibility strategy to increase the company’s competence in addressing the ecological concerns its remote or macro-environment.