Question

PEST Analysis for Amazon

Answer 1

Answer

Amazon.com performance relates to the issues shown in this PESTEL/PESTLE analysis of the business and its remote or macro-environment. The PESTEL/PESTLE analysis model is a strategic management tool for identifying the external factors (political, economic, social/sociocultural, technological, ecological/environmental, and legal) that shape the conditions of the remote or macro-environment, which in this case is that of the e-commerce enterprise.

Political Factors

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)

Economic Factors Important to Amazon.com Inc.

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)

Social/Sociocultural Factors Influencing Amazon

1. Increasing wealth disparity (threat)
2. Increasing consumerism in developing countries (opportunity)
3. Increasing online buying habits (opportunity)

Technological Factors in Amazon’s Business

1. Rapid technological obsolescence (threat & opportunity)
2. Increasing efficiencies of IT resources (opportunity)
3. Increasing rates of cybercrime (threat)