Technology
Technology is the most important factor which affects an E-Commerce business. According to Mintel (2013), in 2012, 86% of all UK households had a broadband connection, up from 80% in 2011. In April 2013, 67% of internet users personally owned a Smartphone and 35% had a tablet in their household, whereas some 29% of tablet owners and 20% of Smartphone owners had shopped via the respective devices in the three months to April 2013. These statistics play in E-commerce’s favor as more users are capable to access the Internet or through other means, hence helping the E-commerce industry to grow accordingly.
In 2012, 86% of UK households enjoyed a broadband connection, up from 80% in 2011. Among the big five West European economies, the UK leads in broadband penetration: in 2012, the comparable rates were 82% in Germany, 77% in France, 67% in Spain and 55% in Italy (Mintel, 2013). This can be directly proportional to E-Commerce businesses, especially Amazon who have subsidiaries set up in most of these countries. This can help Amazon form a good customer base within the Western Europe.
Environment
In a marketing context, Environment concerns the relationship between people and the physical environment. Environmentalists effort to defend the physical environment with the help of cost of production and marketing products. Five environmental issues that should be taken into consideration by the e-commerce business are:
1. Global Warming
2. Pollution Control
3. Conservation of energy and other scarce resources
4. Use of environmentally friendly ingredients and components
5. Use of recyclable and non-wasteful packaging
6. Corporate Social Responsibility
Out of the above six, only points 3, 4,5 and 6 can be controlled by the businesses whereas points 1 and 2 cannot be applied to the E-Commerce businesses, but their distributors can be directly linked to them as they are burning fossil fuels via travel, causing pollution, thus contributing towards global warming.
Legal
Different E-commerce laws apply in China and India compared to UK and even USA which means trading can be difficult between these countries. But, due to E-Commerce laws within the new booming economies, it has become easier to regulate online businesses. For example, China passed a new legislation in 2004 which helps to regulate economic commerce and security of electronic transactions. In the wake of increased use of new electronic and IT in commerce, the adoption of a modern legal structure to control electronic commerce is most significant for China’s economic reforms (Yan, Benson, & Faegre, 2004). Therefore, legislations such as these blur the trading boundaries between mainly the western countries and thriving economies such as India, Brazil and China. Due to these laws in the upcoming economies, it has become much easier for Amazon to set-up their websites in these countries.
SWOT Analysis
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STRENGTHS Low - Cost leadership strategy Superior quality services and products Related/Non-Related Acquisitions Efficient Supply Chain Economies of scope Economies of scale Globally recognized brand Customer-Centric Approach Strategic locations (e.g. closer to airports) Diverse products Adept and skilled employees |
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THERATS Patent infringement Dependent of suppliers Strategic Alliances between competitors Regional retailers Rules and Regulations against tax avoidance Online security (hacking) |
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WEAKNESS No physical presence Low profit margins & cash flows Unclear/time-consuming returns policy |
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OPPERTUNITIES Production of brands similar to Kindle Economies of Scope Open more online stores in Africa Physical presence Sponsoring sports events Further acquisitioned expansion M-Commerce growth |
Stakeholders Expectations
Customer-Driven, customer-centric and customer-focused are only a few of the many terms used when describing Amazon’s objectives. Jeff Bezos, from the start has made it very clear their main priority is the customer and anything that detracts or hinders their progress towards satiating their customers will not be considered or won’t be given as much importance. Hence, the Stakeholders that matter the most to Amazon and Jeff Bezos are its customers – ‘Customers are the folks who have the money. Our competitors will never generate money for us!’ – Jeff Bezos (Stockport, 2010, p. 576).
Therefore, to meet the stakeholder’s expectations, Amazon ‘may make less per item, but by constantly gaining trust, they will sell many more items. Therefore, Amazon offers low prices across their entire product range’ (Amazon.com, 2010). It is because of this policy, Amazon has become the leader within the E-commerce business and has been able to expand into ventures that are either within their capabilities or value network of the organization or sometimes, poles apart...............................
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