PESTLE ANALYSIS-AMAZON

Political


With the government encouraging make in India campaigns and promoting atmanirbhar Bharat.
The budget for the year is incorporative of several schemes and initiatives that will help businesses and ecommerce websites operate more easily. schemes such as “Ease of Doing Business 2.0” and “One nation, one registration” programs and “Digital Ecosystem for Skilling and Livelihood” (DESH-Stack) portal which will aid business operations with measures such as:
• Digitization for improved transparency and ease of use
• Interlinking of the ASEEM (Atmanirbhar Skilled Employee-Employer Mapping) Udyam, e-Shram and National Career Service (NCS) portals to create connected databases and improve efficiency

Economic

The amazon effect


The Amazon effect refers to the impact created by the online, eCommerce, or digital marketplace on the traditional brick and mortar business model that is the result of the change in shopping patterns, customer expectations, and the industry’s competitive landscape. As online shopping and eCommerce grow in popularity, it has hurt many traditional businesses that are forced to compete with the online marketplace with only a physical location.
Counter
Amazon has enabled small businesses to reach millions of customers across India by providing an ecosystem for them to use. They have been empowered to offer a superlative customer experience while helping these local sellers increase their product exposure, expert endorsements along with product reviews. It has also created a space that can foster these sellers’ unique products and services. .he world.”

Technological


Amazon is virtually in every industry from food delivery, content streaming, e commerce. It is truly an unrivalled monopoly. Amazon has had several fantastic technological innovations in the last decade.
Fire tv
Fire TV is Amazon’s response to similar products from competitors, such as Apple TV and Roku. The product is gobbling up market share quickly. By mid-2019 it had more than 34 million active users.4 The streaming industry measures market share separately for the box and the stick. In the U.S., Amazon’s Fire TV box had a 28.5% share of the market but 57% of the market for sticks.4Its versatility has garnered rave reviews from industry analysts: A Fire TV box streams live TV and allows users to watch hundreds of queued shows and movies. It is also a popular and well-received gaming device.
Amazon Alexa
While the voice-assisted technology isn’t entirely there yet, Amazon’s voice-responding virtual assistant is helping to propel it forward. With the Amazon Echo, Tap, and Dot, Amazon is getting people accustomed to using this technology—and trying to grab their share of the market (versus competitors like Google and Apple). Amazon’s voice assistant, Alexa, is amazing at doing Amazon things (placing orders, finding music, etc.). And she can hear and respond to voice commands at a normal volume from across a noisy room, which is pretty impressive.

Social


the social impact of e-commerce can be measured by satisfaction and trust.
Social media playing a key role in the dynamic in the website consumer relationship. Eith the nuber of people using the internet increasing day by day. the effect social media has particularly on the millennial and gen z is astonishing. Various social media platforms have a strong impact on lifestyles of people today. Facebook, Quicker, Snapdeal, Amazon, Pinterest, and Instagram greatly affect consumers in their online shopping habits with SEO and SMO, and strategies like pay per click advertising whereby they reach the target audience effectively.
Compared to 39.1% of Millennials, 64.2 percent of Gen Z said they draw purchasing inspiration from Instagram. Ethics, sustainability, and equality are equally important to these younger generations. For example, 41% of Gen Z indicated they’d pay more for sustainable apparel, while 73.9 percent of Millennials believe it’s extremely or somewhat essential for firms to demonstrate their support for diversity and equality.

  • Over 75% of people are shopping at least once a month online.
  • 45% of millennials admitted they prefer buying online because they can run comparisons on products and prices
  • Eight out of 10 millennials never buy anything without first reading a review
  • 95.1% of millennials admit to impulse shopping
  • 83% of Millennials are not concerned about security while online shopping
  • 40% of millennials have used voice search before making a purchase online
  • More than 53% of millennials prefer to seek out details online rather than talk to store staff when they are in a shop

Social media is also a big influence on their purchase decisions. In particular, 64.2% of Gen Z noted that they get shopping inspiration from Instagram, compared to 39.1% of Millennials. These younger generations also care a great deal about ethics, sustainability, and equality. For example, 41% of Gen Z said they’d pay more for sustainable fashion, while 73.9% of Millennials think it’s very or fairly important that brands show that they are pro-diversity and pro-equality

Environmental

Recycling

Amazon is committed to reducing our environmental footprint through recycling initiatives in our own operations and partnerships that support the development of recycling infrastructure across the industry.
Carbon footprint
Amazon’s corporate carbon footprint quantifies the total greenhouse gas emissions attributed to our direct and indirect operational activities. We measure our total impact on the climate, map the largest activities contributing to this impact, and develop meaningful carbon reduction strategies to reach net-zero carbon emissions across our business by 2040.
Renewable Energy
As part of our goal to reach net-zero carbon by 2040, Amazon is on a path to powering our operations with 100% renewable energy by 2025—five years ahead of our original target of 2030. In 2020, we became the world’s largest corporate purchaser of renewable energy, reaching 65% renewable energy across our business.
The Climate Pledge
Amazon is committed to building a sustainable business for our customers and the planet. In 2019, Amazon co-founded The Climate Pledge—a commitment to be net-zero carbon across our business by 2040, 10 years ahead of the Paris Agreement.


legal


In June 2021 by the Department of Consumer Affairs came up with the Consumer Protection (E-Commerce) (Amendment) Rules, 2021, placing some stringent rules on ecommerce websites. Amazon as an ecommerce
Some of the rules are
Use of marketplace entity’s name or brand for advertising or sale of products or services: Marketplaces may not use their name or brand to represent that their offers are from the marketplace itself.
Misuse of a dominating market position: An e-commerce business may not abuse its dominant market position in any market. fallback liability: In the event that a seller on a marketplace platform fails to provide goods or services, resulting in a loss to the customer, the marketplace will be held liable.
Advertising that are deceptive: An e-commerce platform should not allow misleading advertisements. Falsely portraying a product or service, (ii) falsely promising or misleading regarding nature are all examples of deceptive advertising under the Act.

Case Discussion: PESTLE ANALYSIS : PEPSICO

PepsiCo is the largest selling beverage the world over, of course after its arch rival Coca Cola. It accounts for a 37% share of the global beverage market, and therefore they need to understand each and every country’s market in order to stay in line with their PESTLE situations. Pepsico is a big brand, currently holds the 23rd place in the Interbrand report of the World’s Leading Brands. Their advertisements feature major celebrities and athletes like David Beckham, Robbie Williams, Britney Spears, Michael Jackson, Kendall Jenner etc.
Their market reach is also very diverse, as they’re present in almost every country from the US to New Zealand. A probable PESTLE analysis for them is given below:

Political:


Major economies like the United States and Canada are politically stable but in many parts of the world civil unrest in certain markets results in sales dip, product seizure, disrupted supply chain, product damage and hence losses. Most importantly, cross border situations are starkly different therefore Pepsi has to stay in line with all those policies and changes so that they can adapt to all those changes accordingly.
Besides, US government initiatives against sweetened carbonated drinks are a threat that could reduce PepsiCo’s revenues in the upcoming future. Due to new introduction of an American tax called the soda tax, the price of soda rose 3 cents per ounce when adopted by Philadelphia. Although this soda tax originated in 2015 but since Philadelphia’s adoption, Oakland, Seattle (Washington), San Francisco, and Boulder Colorado have also integrated this change. The government is trying to make a point- sugar and obesity is the biggest threat to American youth health today and a stop has to be put to it.

Economic:


As the recent economic downturn has plagued the economy, companies had to restructure their sales and marketing campaigns greatly- so they will have to rethink budget. Also, if profits diminish they may have to undergo downsizing internally and re-think upon how to increase the sales. Economic conditions have the highest influence on a business, regardless of what trade it is in.
Social:
Social factors greatly impact Pepsico, as it’s a non-alcoholic beverage it has to remain in line with the strict and stark differences of cultures the world over. Also, Pepsi has to communicate its image as a global brand so that the people can associate it with themselves as something that connects the world together. People are avoiding sweetened aerated beverages (an average can has 40 sachets of sugar) and obesity is becoming a concern- they have to address these concerns.
Pepsico is running various CSR projects globally for food, water and children well-being.


Technological:


With the advent of the new age in technology, companies have completely integrated themselves with all the recent changes that have taken place. To mention a recent trend that has greatly picked up and something that almost every business is turning toward is Social Media for advertising. The social media explosion has allowed for increasingly interactive engagement with the consumers with real time results so Pepsi has to stay ahead of all the developments that take place with keeping in view how the youth of today utilizes technology for their benefit and how can Pepsi reach them in order to keep on increasing brand recall and brand engagement.
E-commerce delivery can also be looked at. Factory automation is another developmental focus area and technology upgradation could help production.

Legal:


There can be many legal implications upon the beverage industry.
Pepsi is a non-alcoholic beverage and is therefore regulated by the FDA. So, they’re supposed to maintain a firm standard of the laws set out by the FDA with consistency. Also, many different markets across the world have different set of regulations that are either relaxed or are either stringent.
In the early decade of this century, Pepsi was accused of using contaminated water in Indian market, given a lab test that was done upon the water flowing into the Pepsi factory that was located nearby an industrial estate. A massive recall was issued for the products from shelves and then the product was tested costing the company many billions of dollars upon the tests as India is a very major market. Pesticide charges were another legal controversy.

Environmental:


Plastic is adding to environmental strain and so bottling /packaging will have to be thought again.
Over utilization of water resources for manufacturing has created a concern today.