Amazon Limited Liability Company is the globe largest online retail company and renowned cloud service provider. The Seattle based company in Washington was founded on July 5, 1994. The company initially began as a book selling organization but has since expanded to deal with a wide variety of consumer products and digital media including various electronic devices such as fire television (Spector, 2009). The company's success has ever been triggered by competitive services and products they offer to their clients across the entire globe. It mainly delivers its services to four main set of customers, that is, consumers, sellers, content developers and creators and various organizations. Moreover, the company also specializes in the provision of promotional and marketing services including on-net advertisement and re-branding credit card agreements. The organization primarily serves its clients across the globe through its well designed retail website which enables it to focus on different selections, price and convenience issues. Till now the company has been competitive and has remained one of the most valuable retail companies among other companies as Walmart (Spector, 2009).
Analysis of Globalization Drivers
It was not a walk in the park for Amazon to become a globally renowned company. The organization management was triggered and is still being triggered by the five drivers of globalization which has enabled the company to compete favorably in the global market (Michaux, Cadiat & Probert, 2015). First is the technology drivers' aspect. Technology is a key modern driver to globalization since it is capable of shaping the foundation of modern globalization. Amazon has heavily invested in the use of technology by creating a lot of convenience to its customers since it products and services are being negotiated and bought online by its customers. Moreover, the company has encouraged its employees to be creative and innovate enabling it to produce world-class, unique electronic products. This move has ever since revolutionized the company.
Moreover, Amazon has enabled its employees to operate in a technological environment. This has enabled the improvement of its processes and has enabled the entire organization to carry out its daily operations smoothly. The massive technology hub that has ever kept the company on course is Linux -based (Michaux, Cadiat & Probert, 2015).
The second driver is a political driver. The liberalization of different trading rules and the deregulation of the market have lowered the tariffs imposed on companies. This has enabled Amazon Company to initiate direct investments in different countries across the entire globe. The implementation of the General Agreement on Tariffs and Trade (GATT) and world trade organization (WTO) are some of the latest development that has enabled Amazon to penetrate the globes market (Michaux, Cadiat & Probert, 2015). Thirdly, the market driver. As Amazon domestic market becomes more and more exhausted, the company has been deprived from expanding for more market opportunities for its products that can enable growth and expansion. To overcome the saturation of the domestic market, the company has ever since used global marketing channels for its online products (Michaux, Cadiat & Probert, 2015).
Cost diver. The efficiency of operation and cost vary in different countries and global companies such as Amazon has taken advantage of this fact. The company has ever enjoyed economies of scale which has enabled it to have a high product and service developments. Lastly are the competitive drivers. Amazon has been pushed to seek for globalization due to the inter-firm competition in the domestic market which was marking the company to undersell its products and services (Michaux, Cadiat & Probert, 2015). With globalization, the company can sell its products internationally and realize maximum sales from its vast online products and services.
Analysis of Basic Need Potential
Amazon has traversed different markets across the entire globe with the most basic needs of its customers in the international and domestic market are reduced cost of products and services, efficiency in payment gateway and unique and quality products. (Michaux, Cadiat & Probert, 2015). Amazon customers have had a lot of conveniences when it comes to the purchasing of the company products. The company has adopted a sales channel that enables its customers to select from a variety of products and services. Moreover, the customers have been able to link their shopping with the existing list of Amazon products. This has enabled them to be notified in case of a new arrival in the market (Michaux, Cadiat & Probert, 2015).
Additionally, the company offers high-quality products at a low cost including clothing and jewelry, art and craft, home and kitchen products, sports and outdoor, electronics and beauty products and services. Moreover, the company has created a remarkable platform designed for large listing and purchase of its products and services. In most circumstances, it is indeed easy for Amazon buyers both domestically and internationally to make an assumption that they get the best prices from the products they buy, and that is exactly what the marketing department in Amazon are actually aiming at so as to maintain customer loyalty and eliminate customer switching to other organizations (Michaux, Cadiat & Probert, 2015).
Amazon Company has been able to charge low prices but which is relative to the quality of the products they offer. This has enabled them to realized boosted sales. They have initiated fair pricing of its quality products through pricing a few popular products slightly lower than their immediate competitor Walmart. This has enabled the company to build on its customer's basic potentials by creating a perception to the customers as being a low price leader organization. Moreover, the company has provided customers with different and convenient gateways like credit cards, mobile payments. In addition, the company has made it easy for its millions of customers across the globe to check in and checkout using the available information already in the custody of the company account (Marmol & Probert, 2015).
Analysis of Financial and Economic Forces
Amazon performance has depended on its financial and economic situations of different economies in which it operates its online retail business. First, the consequences of an economic trend of different economies and the alteration in the macro environment are integral to the success of Amazon Company (Marmol & Probert, 2015). The company has been able to achieve its success due to the economic stability of the international markets in which its operations. Moreover, the company has a strong financial base that has enabled it to cheaply seek for long-term loans with grace repayment periods from international organizations like the World Bank and the international monetary fund because of its reputation. This has enabled the company to expand in whatever economy it deems suitable to conduct its retail business.
The economic stability of most developed countries has greatly contributed to the successes of Amazon Company since in such markets the company has experienced minimum problems associated with the macro environment hence minimizing the risk exposure of the company online retail expansion. Moreover, Amazon is experiencing many growth opportunities in many developing nations (Marmol & Probert, 2015). For instance, the frequent increase in disposable income in the developing markets is capable of boosting the company's financial performance. The Chinese market is one of the targeted and largest markets that the company is aiming to penetrate and this requires a strong financial base accompanied by suitable strategy formulation.
Analysis of Political and Legal Forces
Amazon Company operates globally under different political and legal influence. The political and legal forces focus on governmental operations and its effect on the retail business on Amazon Company and its consequences to the macro environment. The political stability of different developed countries and governmental support for e-commerce and increased governmental initiatives on cyber security are important to Amazon success. Amazon has benefited from the political stability of different nations which has enabled it to exploit opportunities for the company to expand and massively diversify its business in the developed countries. For instance, Amazon can expand its brick -and -mortar bookstore operations in the United States to boost electronic commerce (Marmol & Probert, 2015).
On the other side general governmental support in different nations for electronic commerce has proved as a base for Amazon success in different nations. The company has continued to expand in the developing countries markets with appropriate governmental support put in place. However, these political and legal factors have also posed a great threat to the Amazon Company because of rising competition from similar companies. On the other side of the legal aspect, Amazon online retail operation must adhere to the legal requirements in the countries in which it holds markets. The important aspect of the legal requirement is rising product regulation, creating ease in import and export regulation and increased environmental protection.
Increased product regulation is as a result of societal demand on companies. These legal factors have boosted the growth of Amazon in initiating different measure of reducing the production of counterfeit products in its online retail website. Moreover, the company has found a gateway for growth through legal factors by having ease in carrying out import and export operations. (Marmol & Probert, 2015).For example, Amazon is capable of expanding its global operations to take advantage of the increasing ability of different sellers to access overseas suppliers. Moreover, the legal factor has enabled the company to strengthen and build its brand image through proper corporate social responsibility regulations that address rising environmental protection regulations.
Analysis of Socio-Cultural Forces
Social condition across the globe has determined the success and growth of Amazon Company. The management of the company must take into account socio-cultural aspects such as increased wealth disparity, increased online buying patterns and increased consumerism in less developed nations (Spector, 2009). The increasing wealth disparity indicates a difference in the gap between the poor and the wealthy in the society. This disparity has dragged the company in terms of the potential stagnation of its real disposable income levels as well as stagnation of the macro environment of online retail business. A high level of disposable income has proved to be the source of the success of Amazon and is more favorable in boosting the potential revenue of the Company.
Nonetheless, an increasing level of consumerism in less developed countries market has created more opportunities for Amazon Company for expansion. For instance, a high level of consumerism in less developed countries has increased Amazon growth since the company has been able to expand its online retail operations in these countries. In general, the company has been in a pole position of benefiting from increasing online habits as many customers around the globe gain access to the internet hence enabling the company to expand and penetrate easily in developing countries (Marmol & Probert, 2015).
Analysis of Competitive Forces
Amazon Company has consistently led the online retail business as a result of the adequate integration of the competitive forces affecting its operations. To maintain and keep its leading pos...
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