Table of Contents
Recently, organizations have grown tremendously and accumulated their net-worth in the forms of capital accumulation, market share and much more. There are a lot of issues that make the company seek a better progress in performance. These issues are supposed to be identified and assessed in order to know their effects on the performance of the company. These factors include internal and external aspects of the enterprise that affect or determine the shape and the progress of the company. These two environments are further classified with the help of the SWOT analysis which identifies strength, weaknesses, opportunities, and threats (Farmer, Smith, & Yellowley, 2012). Therefore, strengths and weaknesses emanate from the internal environment, and opportunities and threats originate from the external environment. This paper looks deeply into the internal and external environment of the Amazon Company which is the first company in the sphere of distribution of both Internet and online books worldwide. This company is the largest in terms of the number of employees and revenue.
Scan of the External Environment
Government Rules and Regulations
Opportunities and threats define the concept of the external environment of any organization in the best way. These are the factors and features that are out of reach or control of the company. First, there are the government rules and regulations which aim to control the market. Being an international company, Amazon faces regulations and guidelines from the governments of different states. Sometimes the government introduces laws that are meant to protect the low producers and or the local producers of the services that the foreign company is going to introduce. For example, due to the fear of exploitation by foreign companies, the host country may set a particular limit that the foreign firms take in the form of investment in order to gain a certain percentage of the market. The rest would be exploited by a local firm. This scenario affects Amazon very much as it cannot utilize all its resources in many countries.
Technology and Cloud Computing Services
Second, there is the issue of the rapid technological growth and the way clients adopt it. This growth is an opportunity to the company, especially in the developing countries. With the help of its massive resources, the company has introduced its services to Europe, Asia and many more areas. Everything is being digitalized and the Internet is gaining popularity. Companies are making use of the cloud computing in order to make their daily services effective and efficient. The company has upgraded its elastic compute cloud from 2006 to the current one which is called simple DB and is configured in the Microsoft computers. This sector has boosted the services and undertakings of Amazon and has helped with making huge revenues from this opportunity. For example, the company has produced the fourth-generation Internet kindle meant to match the massive growth on the Internet sector. On the other side, the issue of technology may be a threat to the Amazon Company, since some areas do not have access to proper infrastructure that can accommodate these services. Therefore, it may be willing but unable to exploit these markets. Hence, the market is taken by other firms which are nonInternet based (Cunliffe, 2008). In the end, it limits the maximum utilization of the firm's capability to invest.
In order for a firm to establish itself well and become top in the market, it has to beat all the competition hurdles and emerge as the first choice for the customers against competitors. This factor has to be handled well by the management of the organization in order not to make any mistake that may strengthen the competitors (Farmer et al., 2012). Amazon’s competitors are not as strong as this giant. Additionally, they do not have the capital base that can compete well with Amazon. Considering everything from the revenue earned daily to the number of experienced and more qualified employees, Amazon has the capability to give the best and conquer all.
Scan of the Internal Environment
Internal environment of the organization can also be referred to as its strengths and weaknesses. These are those factors that the company can control - for example, the customers, suppliers, employees, management and others.
Management and Organization Control
The management spearheads all operations of the company and its effectiveness helps the company to progress. Amazon management leads the company with intelligence and professionalism. This aspect evident since the company has undertaken some diversification on investments. These investments include Zappos, Kiva systems and much more. Such management effectively and positively impacts the growth of Amazon and increases its pace of development.
Organization’s Resources and Competitive Position
Resources are a very crucial factor in any organization, as they enable it to undertake its operations smoothly and provide the capability to invest and venture in new fields. These investments help any organization to have a wider capital base that increases the shareholders’ equity and wealth (Cunliffe, 2008). With the help of its resources, Amazon is better off in the industry compared to its counterparts. In order to prove its capabilities and the strength of its resources, the firm took a multibillion investment in Engine Yard Company in 2008. In 2010 the giant invested in the living social company which became an addition to the already established company’s massive investments over the years.
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In the year 2014 an amount of 4,588,888 has been spent on another investment in order to acquire a .buy domain in the form of an auction. With substantial investments and a high number of employees, the company has better chances to be effective in the market and to do well compared to its competitors. Amazon is more likely to maintain its status in the industry and to improve more, given the capital base and the large amount of resources it has.