Amazon Company’s External and Internal Environments


Amazon is the leading company in the world and was founded by Jeff Bezos. It began by selling mainly books, but now it has grown in terms of goods and services over time and has become highly successful. Today, the industry has remained committed to offering the world’s widest variety of products and being a customer-centric company where consumers can access everything they need (Verma et al., 2018).

The company sells goods, including books, home furnishings, and equipment. To keep clients purchasing from their firm, the organization attempts to provide the best quality products at competitive pricing. The organization sells items both directly from the company and through third-party vendors. Its marketing strategy has been proven to bring the corporation to a prosperous future after more than two decades. This essay is going to analyze the company’s external and internal factors influencing the operation.

Two Segments of the General Environment Ranked Highest

The overall ecosystem comprises six (6) sections: political, commercial, ecological, legislative, cultural, and technological. All of the portions impact Amazon, but the economic and technology sectors have the most significant impact. Trade and industry variables have an impact on the economy and market circumstances in every organization. Commercial forces heavily influence the company since when the market is doing well, profit margins are rewarded. If the industry has inadequate funds, profit and states may suffer. Surprisingly, the institution is an e-commerce company that provides various products that consumers will purchase regardless of the economy’s performance.

Because the organization is solely an online retailer, it is primarily dependent on technology. They rely on technology for both customers and business engagement. To perform operations, the corporation must keep up with current technologies. Marketing, social networks, and sales all rely on technology. Since the current generation is increasingly reliant on technology, businesses must keep up with the times. Today, one of the critical success factors is technological innovation.

The two Forces of Competition

The risk of replacement goods and services is the least important of the five sources of competition to Amazon. In every industry, the danger of new entries is a constant concern. A company is exposed to radical shifts and the creation of new business models, as well as the launch of new and well-funded rivals, according to the Amazon financial statement (Tan et al., 2018). As a result, the firm considers new companies to be a significant danger. Rivalry among existing competitors and the bargaining power of customers are the two most prominent factors of competitors in the market for Amazon (Adeleke, 2020). Due to the rapid development of the e-commerce business, the competitive rivalry is quite intense.

The corporation operates in an international economy and deals with a variety of sectors from across the globe. To mention a few, the industry competes with and eBay, both of which supply homogeneous products. These two rivals have a lengthy, or even longer, legacy and may have more clients or brand awareness than Amazon. The firm has traditionally relied on three primary marketable criteria in its wholesale industry: assortment, affordability, and availability. The strength of the organization’s clients is crucial since customers can choose from various online shopping services.

Clients of the institution can order goods from hundreds of other internet sites. To satisfy customer requirements, the company must offer competitive or competitive prices. Otherwise, buyers may check the Internet and purchase from a retailer with reduced costs. Another issue is that, since the industry is an online marketplace, consumers can buy products from other retailers with physical locations without waiting for them to be transported.

How Amazon can advance its Economic and Technological forces

Amazon is defined by four principles, one of which is consumer fixation rather than competitive emphasis. For the organization to gain a sustainable competitive advantage in the foreseeable future, I recommend achieving what they are doing by putting consumers first. Clients want outstanding customer service in addition to high-quality items. Customers will keep shopping with the institution since they feel appreciated. To stay at the forefront of its many rivals, the firm needs to keep its pricing low, maintain sales volume, provide speedy shipment, and provide excellent service to customers.

By sustaining consumer pleasure, Amazon will increase its real purchasing power in the coming days. A company must retain service quality for customers to want to buy with them instead of looking elsewhere. Buyers of Amazon are devoted to the firm because of the corporation’s client satisfaction and low prices. The enterprise has low operational costs because it is an internet store. The money saved on bureaucracy can be used to keep their rates as low as feasible in comparison to their competition.

External Threats Affecting Amazon and the Opportunities Available

Amazon, like every other corporation, confronts a variety of dangers in the e-commerce industry. Credit card theft fraud and stiff competition are two critical concerns that e-commerce enterprises face. Cybercrime is the most severe problem for Amazon out of the two. Because the corporation conducts all online transactions, clients’ credit and debit cards and credentials can be saved and hijacked, exposing their personal information.

To avoid cybercrime and safeguard consumer security and privacy, the company must maintain strict information security. The organization will constantly be threatened by competitive pressure from rival firms. Most establishments now sell their items online, and these businesses also benefit from having a physical site. The firm’s best chance is to create physical locations and increase its worldwide presence.

Some individuals do not shop online, so it will attract new and returning clients if the firm has a geographical address. The organization can increase even further with physical locations delivering the same rates as the Internet and the brand’s well-known vendor service. Expanding the international market can help the company access new clients and grow in the worldwide market. The firm’s expansion will attract customers in regions where Amazon’s services are not available worldwide.

Competitors broadening in worldwide operations and overseas markets, according to Amazon, are risk issues. Raising operational capabilities will entail vastly increased product offerings, which may burden the organization’s staff, performance specifications, administration, and technologies. Failure to control expansion might harm Amazon’s character, impede economic growth, and negatively affect its financial position.

Amazon Corporation Greatest Strengths and Most Significant Weaknesses

Amazon’s capabilities are impressive because Amazon is the industry leader in e-commerce and is one of the company’s greatest assets. The corporation has achieved the distinction of being the biggest in the world enterprise, which has given it widespread recognition. Amazon’s growth, revenue, and creativity have steadily increased since its platform has been revealed to be its greatest asset.

Consumers continue to do business with Amazon and remain loyal because the company has such high customer satisfaction standards. Because the business is available on the Internet, it can collect information from clients based on their searches and viewing habits. The corporation can use this method to pique customer attention. Amazon can use the data collected to send out emails and send out information to make decisions.

The biggest flaw is the reality that Amazon has no physical locations and strongly depends on the shipment. Buyers must pay an additional shipping fee, but if Amazon had a physical facility, customers would be able to pick up their order, saving on shipping costs and delivery delays. Amazon has done an excellent job of attempting to address this flaw. The e-commerce giant now grants same-day and one-day deliveries, but these programs are only available to online orders and are not widely available. Although the company is progressing correctly, this will always be a flaw until real locations are opened.

Amazon Resources, Capabilities, and Core Competencies

Clients, commodities, and technology are Amazon’s assets. The company’s products and services are what it takes to manufacture or sell its goods. The formation of these resources accompanies the capabilities. The institution’s core skills are what keep them ahead of the competition and in first place in retail. The industry’s physical prowess includes its goods, trademarks, customer information, and technological expertise. The company’s continued success is due to its entire physical prowess.

Amazon’s fundamental competencies include its capacity to offer things online, which has completely transformed the market. It was one of the first companies to offer things for purchase online. The firm employs a cost-leadership approach, which entails offering products at a cheaper cost than its competitors. Additionally, Amazon offers the highest-quality goods and services compared to other companies selling similar products. Their operations are efficient for their consumers, dependable, and offer various reduced delivery services.

Amazon’s Value Chain to Determine Where they Can Create Value

Shopper value can be created when a company uses its assets, capabilities, and core competencies. Price can be determined through marketing a company’s products into the memory of consumers with financial capital. With dynamic capability, the business can build more value, allowing the firm to become more widely acknowledged as the most progressive company on the planet. The industry can build good services for individual buyers due to its competencies. This can improve its operational costs by reviewing its value chain and developing new technologies, which may unfavorably hurt the firm due to its complexity or lack of user-friendliness. Given the state of technology, this is an essential aspect of Amazon’s value production and plays a significant role in Amazon’s business.


The business aims to keep ahead of its client’s expectations through a mix of high internal standards and a contemporary culture, which has several benefits, such as developing better goods and improved customer service. Amazon has created employment for 560,000 workers since December 2017 (Bourzac, 2017). In 2017 Amazon Prime membership surpassed 100 million people around the world. Amazon is now available in 50 cities and nine nations around the globe (Rao, 2018). For the first period in history, Amazon’s global market in 2017 witnessed 50% of its total sales online come from third-party dealers, with a total of 2 million vendors (Ryan Cross, 2018). As can be seen, Amazon has a stranglehold on the e-commerce market. If the firm continues on its current route, it will grow and prosper and retain the biggest and most popular corporation in the universe.


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BusinessEssay. "Amazon Company’s External and Internal Environments." January 23, 2023.