Discuss about the Business Foundation for Organizational Environment
Organizational environment in any business firm contains both internal and external factors. Environment should be scan for determining the development as well as forecasting the factors that can encourage the success and achievements of organization. Environmental scanning or observation means the ownership and usage of data and information regarding patterns, occasions, trend as well as relationship in the internal and external environment of organization (Bhatt et al., 2015). The analysis of internal and external environment helps the managers for deciding the ways of future of the company. Scanning of internal and external environments helps in identifying the opportunities and threats which exists in the environment.
Here, the researcher will show the scanning of internal and external environment of Amazon India. Amazon should take the advantages of the opportunities and reduce the threats. The report will mainly focus on the SWOT analysis, which helps the company to know its strength and weakness, opportunities and threats (Axelrod, 2015). The report will also show the business concept which is related to a new product that will be relevant to the company. The researcher will even analyze the external and internal environment along with identification of a relevant strategy and also develop a new product for Amazon to introduce it in the target market.
Amazon Company is one of the largest online retailers in the world as it provides a wide range of products and goods like electronics, books, and fashion product from man to woman and baby to old persons. Amazon was promoted in the year 1994 by Jeff Bezos. The company also has its own website i.e. www.amazon.com, which was launched in the year 1995 from where the customers can buy the merchandise (BELEW, 2011). The company even operates internally through its websites. Apart from India, now the firm has operations and functioning in Asia, Europe and North America. In the year 1999, the company expanded with the acquisition of stakes in Exchange.com, Drugstore.com, Home Grocer.com and Pets.com. The company offers varieties of predicts and services with the help of its trademark amazon.com, e- commerce site. The goods provided by the firm consists merchandise purchased for reselling from vendors and then goods provided by the third party sellers (Malaga, 2012).
Amazon is mainly operates through three segments of business that are North America, Amazon Web Services (AWS) and International. The AWS business segment earns revenues from the storage, sales of compute and another AWS service for enterprise, academic institutions and government agencies (McNally, Akdeniz and Calantone, 2011). Amazon entered into a partnership with Triggit, which is San Francisco Company for the purpose of strengthening its focus and target on online display advertisement business. Besides this, the company even entered into a non- exclusive licensing agreement that allows the customers of Amazon for streaming TV shows from CBS’s library (Malaga, 2012). The company also launched anew customers’ education center that is Amazon 3D 101 which is anon- stop information and at the same time shopping center for the entire merchandise that is related to 3D (Radford, 2014). In the year 2010, the firm had launched a new Sports and Outdoor Store and shop that offers various products related to sports activities.
Amazon is one of the top online retailer companies across the world, but though it has a lot of competitors the firm has a strong base of loyal customers who constantly buy the products provided by Amazon through online retailing site of the company (Farooqi, 2013). Here, in the following SWOT analysis has been shown in a table format.
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Strength · Strong background and deep pockets · Customer centric · Cost Leadership · Efficient and Effective delivery network · GLOCAL strategy · Acquisition |
Weakness · Shrinking margins · Tax Avoidance Issue · Product flops |
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Opportunities · Backward Integration · Global Expansion · Acquisition of E- Commerce · Opening of physical shops outside India |
Threats · Low entry barriers and obstacles of the company · Government Control and Regulation · Local Competition( Snapdeal and Flipkart in India) |
Amazon has launched its site in India in June 2013, Amazon India and had made rapid advances from then. The company is now ahead from its competitors in e-commerce market of India such as Snapdeal and Flipkart (What next for ‘Amazon of India’?, 2015). The company has crossed its rivals in the country e-commerce market in terms of gross sales. The company has generated revenue more than $2billion and has invested more than it for spreading its market in the e-commerce market commerce of India.
E-commerce sales in India in year 2016 were around $ 14-15 billion as estimated by e-commerce executives, investors and research institutes. Market leaders of e-commerce sector are now largely focused on how the sluggishness of the e-commerce has exacerbated. As the current online retail market is low, Amazon could take a more time to examine and realize its stated objective of making India as the second-biggest market in the world after US over the next some years (What next for ‘Amazon of India’?, 2015). The company has made clear intention to dominate the country’s market and pose a massive challenge for the India’s domestic e-commerce market. The main reason that Amazon wants to dominate the India’s e-commerce market is the fact that the specified country poses a very high young population which is more than 65%. These percentages of people are under the age of 35 and that provides a huge marketplace for Amazon (Zogjani and Raçi, 2015). But the major concern for the company is the fact that 60% of the country’s population still lives in rural areas of the country and is not connected to the internet. The country could face some serious concern by this fact but the literacy rate of India is increasing and company could develop an innovative business model, starting with finding the products to sell.
Amazon established on its early achievements with books, the company now has products categories which consists electronics, games, kitchen, toys and home and kitchen with brown goods as well as white goods. Amazon has developed as a world E-commerce giant in almost last 2 decades (Ho, 2008). Also, the industry’s robust CRM has formed consumer centric methods for the purpose of recoding data and information on consumer’s purchasing nature carefully and relevantly. The company also claims that 55% of their consumers are repeat purchases that results in lower cost of acquiring a new purchaser. For the purpose of differentiating itself, Amazon also created various different strategic support and alliances with various other industries in order to provide superior customers service (Monitoring as a Means of External and Internal Environment Control, 2017).
Due to extensive delivery network and cost wars the company’s margins are shrinking that result in losses. In India, Amazon had losses of about $359 crs in the year 2013-14. The company has attracted negative advertisement on account of Tax Avoidance in the UK and US and large of its revenues from these entire well established market strategies (Insley and Nunan, 2014). In various developing countries the company is struggling for marketing the business profitable that affects the entire profits of the group and turns it into High Debt.
Amazon can come up along with its In-House brands in various other product categories and they can even distinct their offerings that will help them make profits in quite high competitive E- commerce markets (Gillies, 2016). In terms of global expansion, in Asian countries and developing economies will also help the company as these are the markets which in low competition in E-n commerce companies and also not drenched like developed economies (Van?k, Mikoláš and Žváková, 2012).
Amazon bears the threat of low entry barriers that affects the recent player’s business as company much means tough competition, shrinking margins, losses and price wars that leads to the question to the sustainability of the players (Szobiová, 2015). The company even does not have clarity on the problems that are related to Foreign Direct Investment in many multi brand retails which has been a large obstacle in the achievements of E- commerce players in various developing nations.
Amazon India, mainly targets its loyal customers and also future customers as the customers across the world nationally and internationally wants and demands for a huge selection at their affordable prices mainly in low costs and along with this, they also want a convenient shopping experience (McNally, Akdeniz and Calantone, 2011). When Amazon started its operation in India, the management of Amazon observes a quite healthy traction as well as identifies that demands are continuously growing in from tier 2 and tier 3 cities. The power of E- commerce has helped a lot in order to take their sellers and brands to every single corner of the country as well as to the foreign countries. Currently, mobile shopping from the Amazon app growing gradually and gradually, so the company targets on a light app, low page loading cost and also payments for increasing customer experience constantly (McNally, Akdeniz and Calantone, 2011). As Amazon is a customer oriented company, so the firm allows their customers for shopping anytime, anywhere and in any possible way. The company also targets the ‘Aur Dikhao Campaign’ that has attracted almost every Indian customer which has increased more and more purchasing behavior of the customers.
It is recommended that Amazon India should start to sell organic food products in India. Farm production is always well-regarded and values in the country with an understanding of bio-network and future generations (Millson, 2013). The food currently available in current market is laden with chemical fertilizers and pesticides creating an abundant produce. The people of India are gaining their attentions towards healthy lifestyle as India is developing world. Amazon must try to capture the organic foods market as soon as possible to create its positive brand image. The organic products must be available 365 days. The place would be the trusted online site of Amazon India. Company could do the promotions by advertising and promotions that must portray the benefits of utilizing organic food items. The pricing strategy must be kept reasonable as people of India don’t like to spend too much on foods.
As India is still an agricultural based country, organic food items could create a credible performance in the upcoming years (Millson, 2013). The expectancy of healthy lifestyle and healthy food has increased in India as the country is heading towards a self-sufficient country. The advertisement of benefit of having organic foods could influence the citizens in buying organic items. There is huge number of potential buyers in the country that got aware on organic products and has already started to buy it.
Selling of organic foods and home delivery of it has become popular in India and growers are having a hard time to meet the demand of the consumers. This would be great product to sell on the online website of Amazon India as the company has strong background and deep pockets in selling organic goods in US (Bhatt et al., 2015). Amazon India has also got customer attention towards its which would help it to create awareness about organic food items.
References
Axelrod, A. (2015). Box: Natural Language Processing Research Using Amazon Web Services. The Prague Bulletin of Mathematical Linguistics, 104(1).
BELEW, S. (2011). Starting an online business all-in-one for dummies. 1st ed. Hoboken: John wiley.
Bhatt, D., Shah, P., Laslett, L., Waits, T. and Anderson, H. (2015). Environmental Scanning Report Update 2015. 1st ed. Maryland Heights, MO: Elsevier.
Farooqi, M. (2013). Conflict Management Styles and Organizational Environment. 1st ed. Saarbru?cken: LAP LAMBERT Academic Publishing.
Gillies, L. (2016). Electronic commerce and international private law. 1st ed. London: Routledge.
Ho, J. (2008). Inter-brand comparison of online auction markets. Electronic Commerce Research, 8(1-2), pp.103-114.
Insley, V. and Nunan, D. (2014). Gamification and the online retail experience. International Journal of Retail & Distribution Management, 42(5), pp.340-351.
Malaga, R. (2012). Responding To State Sales Tax Laws For Online Retailers A Case Study Of Amazon And The States. Journal of Applied Business Research (JABR), 28(6), p.1229.
McNally, R., Akdeniz, M. and Calantone, R. (2011). New Product Development Processes and New Product Profitability: Exploring the Mediating Role of Speed to Market and Product Quality. Journal of Product Innovation Management, 28(s1), pp.63-77.
Millson, M. (2013). Examining the simultaneous impact of market newness and product innovativeness on the organisational integration-new product market success relationship: a moderation study. International Journal of Technology Intelligence and Planning, 9(2), p.126.
Monitoring as a Means of External and Internal Environment Control. (2017). LEX RUSSICA (??????? ?????).
Radford, C. (2014). Challenges and solutions protecting data within Amazon Web Services. Network Security, 2014(6), pp.5-8.
Szobiová, E. (2015). Creativity in Organizational Environment. Acta Technologica Dubnicae, 5(2).
Van?k, M., Mikoláš, M. and Žváková, K. (2012). Evaluation Methods of Swot Analysis / Metody Vyhodnocení Swot Analýzy. GeoScience Engineering, 58(2).
What next for ‘Amazon of India’?. (2015). Strategic Direction, 31(3), pp.7-9.
Zogjani, J. and Raçi, S. (2015). Organizational Change in Business Environment and the Main Barriers during Organizational Changes. Academic Journal of Interdisciplinary Studies.
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