Amazon’s Micro and Macro Environment Harvard Case Solution & Analysis


Amazon, founded as an online bookstore in 1994, is one of the largest retailer and online shopping site in the world. The company is selling millions of products in numerous categories globally with the U.S as its biggest market in terms of number of products.The company is selling nearly 232 million products in the U.S market, which are categorized into 35 different categories(Export-x, n.d). Besides e-commerce business, the company is also manufacturing and selling tablets, TVs and Phones under the brand name of Fire(Reuters, n.d).

Macro Environment


The society of Amazon consists of its customers, suppliers, employees, competitors and other people, who may not be directly linked with the company, but are included in the company’s society. The company designs and implements its policies keeping in view the impact on the members of its society.Amazon not only focuses on growth, but also benefits its stakeholders in every possible way. The company is constantly upgrading its business by adding more products to its business, which will allow its customers to buy almost anything they want, under one roof(hub, n.d).

Demographics and Psychographics

The demographic variables like age, gender, ethnicity, religion and nationality of the company’s customers constitute the company’s demographics. Amazon’s sales comprise of contribution from every variable, which signifies the company’s objectives of selling the products without any discrimination and most importantly customer satisfaction.

The customer psychology is an important aspect to consider, in order to increase the sales and growth of the company. Amazon provides a reduction in prices on its products in the form of discounts and free shipping offers. This not only attracts the new customers, but makes them loyal as well. Moreover, Amazon Prime has created a distinctive class of customers, which has attracted the higher income class of the society as well(Charts, n.d).


Amazon is operating through 15 independent sites while selling its products in more than 200 countries. In this regard, the purchasing power of the customer plays an important role in the revenues and profitability of the company. Moreover, the overall economic stability and economic circumstances also play a significant role in the smooth operations of company’s business.Amazon is operating in the industry, which is in the growth phase. Therefore, the company adjusts its operations and policies, considering the overall economic environment of the local as well the global economy.

Natural / Physical

The natural and physical aspect of Amazon consists of different companies, which are operating with the Amazon and the environment in which the company is operating. Amazon, being an online e-commerce company, is operating its business virtually through its website. However, in order to store the products and run the business processes, the company has its offices in different regions. These surroundings and environment constitute the company’s external environment, which affects the company’s business and vice versa.

Amazon has taken the initiative through CSR to maintain and beautify its environment while complying with the regulatory requirements in order to survive in the economy.

Political / Legal

The legal environment of Amazon provides distinctive guidelines and regulations, in which compliance is mandatory for the company. Therefore, the company needs to align its work procedures accordingly. Amazon, being an American based company, needs to follow and abide by the laws and regulations, that are imposed on the industry in which the company is operating. These regulations may include the reporting requirements,which are imposed by the U.S accounting body.

The political environment affects the company’s operations in the form of the policies, which are designed by the Government and are relevant to the company’s industry. The Government’s policies about the retail and online businesses are relevant to the business of Amazon.Amazon’s Micro and Macro Environment Case Solution


Amazon is an online e-commerce company, which is selling its products through its website. The company is surrounded and operating in a technological environment, which is a constantly changing and developing environment. Therefore, Amazon needs to constantly adapt to the new changes that are relevant to its business. Any lag in adopting the new technology will throw the company out of the competition (Marketplace, n.d).

Micro environment


Collaboration is an important aspect to survive in the competition and in the market. Amazon has collaborated with the companies like SAP in order to develop Amazon Cloud. This has made Amazon to enter into a totally new business while providing it a way to diversify and expand its business(Bloomberg, 2007).........................

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