An analysis of the macro-environment using PESTEL indicates that there are major threats and opportunities in the environment. However, it is the company’s ability to utilise these opportunities and by using its strengths to minimise the effects of these threats that will be of importance.
In the political environment the company’s sales are subject to both economic and political considerations (AnnualReport.com 2011). There may be restrictions and foreign ownership. In order to meet local ownership and regulatory licensing requirements the company’s Joyo Amazon business is operated by Chinese companies.
The economic environment in which the company operates is affected by fluctuations in exchange rates and changes in interest rates. Approximately 45% of the company’s revenues are associated with its international business (AnnualReport.com 2011). If there is a major interruption in telecommunications the company could losing a significant amount of business. The company faces inventory risk if it over stocks as it may be left with goods that are not returnable. On the other hand if it runs out of stock it will lose business. The company only deals with a few shippers any unforeseen circumstances which affect the shipment of Amazon’s products and will have negative implications for the company’s business. The company’s business is seasonal with between 35% and 39% of its annual sales taking place in the last quarter in 2008, 2009 and 2010 (AnnualReport.com 2011). The company faces competition for qualified employees including computer scientist and software engineers. This means that it has to compete on price with companies like Apple in the digital media device arena.
In terms of the company’s social environment the employees are motivated by being compensated with shares. This means that they are not just employees but also owners of the company (AnnualReport.com 2011). It is therefore likely that they