Sept 2022 Week Four

2

Environmental Scanning

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Institution

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Discussion: Societal Environmental Scanning

Societal environmental scanning for Amazon is a crucial assessment given the organization operates in the online setting where changes and intense competition are inevitable. The most important variables for this analysis will therefore include the following: Sociological, technological, and economic factors. Sociological factors are forces within the social aspect of life that affect a business. Amazon has continuously invented new ways of selling its products and reaching its target customers. However, concerns from critics of online marketing reveal that such advancements are recipes for obesity increase in the society. Amazon became aware of such critics and responded positively by being part of the anti-obesity campaign through a program known as Amazon simile. Sociological factors also influence the type of customers that buy organization’s products or services (Chen, 2022). The online business model adopted by Amazon implies that the organization is always targeting young people who are technologically savvy. This category of buyers is continuously expanding around the world.

Amazon without the influence of technological factors cannot exist. However, it is important to note that there are technological factors that are advantageous to the organization while others are known source of threats. Amazon’s continuous investment in technology is a key factor that contributes to its success. The organization that started as a book seller has diversified into technological ventures. Amazon offers cloud services, data management, and storage. These are perfect examples of technology being put into good use. On the flip side, the ever-changing technological advancements come with increasing rates of obsolesce (Alshmrani, 2021). The other disadvantage is that technological advancement come with increased rates of cybercrime.

Economic factors affect businesses regardless of their business model. Online businesses like Amazon and physical stores like Walmart all depend on the economic conditions. Amazon is headquartered and mainly operates in the United State of America. The country has enjoyed relative economic stability over the previous years. However, there has been an increase in the rate of inflation in many states. High inflation implies that Amazon must increase the prices of its products. Other economic factor such as recession in China can lower the demand of the company’s products in that country. Amazon should consider expanding into developing markets which have been projected to have increasing levels of disposable income (Chen, 2022).

Discussion Two

Amazon is a law-abiding corporate citizen and this is shown by its ability to file it returns and provide information on its financial report as required by the security exchange. In part 1 of the report the organization explains that it operates under a business model that is highly evolving and very much unpredictable. Nonetheless, it seeks to remain a customer centered organization guided by the elements of customer obsession and not competition. It provides unique product and wide product range to is customers. The report highlights the responsibility of Amazon for the various categories of its business partners that include sellers, content creators, and developers. The business organization operates under a model that attracts a myriad range of organizations that offer similar and alternative products. Other than the information on the business model, the report provides the information on the structure of governance of the company. It gives the information about the executive officers in the organization, and information about the board of the directors (United States Securities and Exchange Commission, nd).

The report gives the information about the company’s risk factors. Some the of the highlighted risk factors emanate from the fact that the organization operates in an industry with stiff competition. The other risk stems from the organization’s initiative to venture into new products. Risks associated with inventory management is another critical factor that the company has addressed in its report. Issues such as product returns, product damages, and late deliveries are some of the problems that affect customer satisfaction. The report gives information about the company’s properties, and their respective valuations. It gives consolidated financial data from the year 2016 to 2020. The important factor to note in the report is how the organization explains the effects of C0VID-19 on its business (United States Securities and Exchange Commission, nd).

References

Alshmrani, H. M. (2021). An analytical view of amazon success in the worldwide. Life Science Journal, 18(6).

Chen, B. (2022). Investment Value Analysis of Amazon. In Proceedings of the 5th International Conference on Economic Management and Green Development (pp. 301-308). Springer, Singapore.

United States Securities and Exchange Commission. (nd). Form10-k. Retrieved from https://www.sec.gov/Archives/edgar/data/1018724/000101872421000004/amzn-20201231.htm