Topic > Pest Analysis: Amazon Pest Analysis - 1423

Introduction The dynamic business environment is explained by the ability to respond to changes in the environment. Furthermore, reinforcing success is an important value by showing serious business risk for organizations (Saransri, 2011). When an organization is developing its strategy to achieve a long-term goal, it is important to consider the factors of PEST analysis which are political, economic, socio-cultural and technological. Analyzing these factors is useful because it helps you avoid actions that are likely to fail in the future (content of the Mind tool). PEST analysis also helps identify an opportunity a company can benefit from and the threats it can face in the future. Looking at the PEST factors in this essay An important political factor that challenges Amazon UK faces and is still facing is the impact of Brexit as stability or instability in the UK can affect Amazon. According to Douglas and Gross (2016) if the move takes place where the UK leaves the EU, it could cause political and economic disruption at least in the short term. Amazon is still expanding in the UK despite Brexit bringing its total workforce to 24,000 (Cox, 2017). Although Amazon is expanding into the UK, Taylor (2016) argues that post-Brexit will have an effect on the company as Amazon relies on low-wage employees and often wants migrant workers for its fulfillment centres. There are many Brexit-related challenges that Amazon must adhere to, such as the inflation that has already occurred due to Brexit where the currency has fallen against the dollar and euro. Furthermore, Davies (2017) and Mintel (2016) both argue that the challenges will worsen for Amazon if the UK leaves the EU before 2020 because there is no guarantee that in the future the government will increase the corporation tax rate or it will remain so. Furthermore BBC NEWS (2018) states that the EU union and single market could cost the country half a million jobs and a loss of £50 billion in investment by 2030. This is something Amazon needs to take into account as it can be beneficial or a threat. The second thing Amazon needs to consider is the threat of Brexit in terms of taxation and its effects on sellers. Johnson, (2016) argues that depending on the deal the UK signs with the EU, consumers whose orders are to be sold from fulfillment centers in the UK could lead to increased taxation for Amazon. After the Brexit vote, the British currency fell to its lowest level in 31 years (Baggio, 2017). Furthermore, this is something Amazon needs to be aware of, Taylor (2016) argues that Amazon relies on migrant workers for its fulfillment centers and that such workers may find it more difficult to work in the UK due to the falling pound. Trade regulation between the UK and EU is currently unclear; this means it could impact Amazon's cloud-based web service as this means the efficiency of data transfer between the UK and the EU is currently unknown (Anthony, 2016). UK GDP is also expected to decrease, this means Brexit could cause an increase in goods and services, also this could lead to consumer spending