As Part 1 of this assignment, you will choose a “mentor company” that you will refer to throughout this course.
In your paper, Identify a large company to be your mentor company to analyze and formulate its global marketing strategy.
*The company cannot be any of the following: McDonald’s, Coca-Cola, Walmart, Starbucks, or Pepsi*
Select one of the following companies: Budweiser, FedEx, Samsung, H&M, American Express, Taco Bell, Uber, Zappos, Toms, Airbnb, Target, Amazon, KIA, or PayPal.
**The Company that I would like to discuss is AMAZON**
Under an Environmental Analysis heading
Construct an environmental analysis for your chosen company in the global arena and regarding the below factors:
Social and Cultural
Political, Legal, and Regulatory
Under a General Strategy heading
Based on your environmental analysis, identify a country in one of the following regions for your company to expand to. If your company is already in a selected country, you will examine their global marketing strategy in that areas and formulate your own successful strategy:
Explain your rationale for selecting the country in one of those regions. To explain your rationale, consider the following criteria in that selected region and particularly in your selected country and analyze how these criteria impacted your decision to expand to that country.
Global Marketing Plan Part 1: AMAZON
Amazon is the leading e-commerce company with global operations. Jeff Bezos founded the company in 1994, beginning as a bookstore before diversifying its business model to include the marketing of anything customers need. The platform has made the shopping experience for customers more straightforward and more convenient. People log on to the website or app and can purchase anything they want to be delivered at the doorstep. Besides, customers take advantage of reviews when making a buying decision online. As a result of the convenience and excellent customer service, Amazon has grown to become the leading ecommerce retailer worldwide, though it faces intense competition. To overcome the industry’s severe competition, the company is currently investing in physical stores to increase its market share and customer base. While internal decisions affect the firm’s operations, it is also necessary to understand external factors in its macro-environment that impact its operations globally.
Various economic factors affect the operations of Amazon. For example, the current stock uncertainty in the global market and the decision to expand to physical stores are some of the company’s issues. The firm operates during a period when rivals, such as Walmart are experiencing a decline in their shares. Besides, the company faces the uncertain impact of current economic challenges brought about by the current COVID-19 pandemic. However, the company’s operation model, including the capitalist investment in new markets, might underlie its success in the future (Denning, 2017). Research and innovation are other factors that might determine the company’s success in its future investment plans.
Amazon is mainly an online platform, although its operations are expanding to physical stores to increase its market reach and compete effectively. The company relies on technology for its business operations and meets the demands of the highly globalized world (Sindi and Roe, 2017). Research and development are at the core of Amazon’s business success due to the need to innovate and trade in products that customers want. The company trades in consumer goods, electronics, grocery, books, and many other categories of products worldwide. Delivery depends on the source and delivery points but remains one of the most effective globally.
Social and Cultural
Current lifestyles and related issues affect the operations of Amazon in any country in which it operates. For example, with the problem of obesity worldwide, with 711 million people being considered overweight, the company’s operations are affected (Bedard, 2017). Governments around the world are under intense pressure to encourage a healthy lifestyle and physical activity, which impacts on Amazon’s market. For example, it is assumed that delivering customer orders to the doorstep promotes non-active lifestyles, which might increase obesity cases. However, during the ongoing COVID-19 pandemic, convenient shopping plays a critical role in social distancing and curtailing the disease’s spreading.
Political, Legal, and Regulatory
Amazon is an American-based company with operations worldwide, meaning that the political, legal, and regulatory environment of the parent and every host country affects its operations. The management seeks to comply with all regulations to ensure business success. Another challenge for companies operating in the global environment is the need to comply with laws to combat terrorism, such as listing clients on terrorist watch lists or politically sensitive clients. In 2017, the company was exposed to federal investigation for transacting with persons terrorist watchlists and violating sanctions in the US, indicating a disdain to international law (Daily Mail, 2017). Another area of regulation that the firm should comply with its environmental regulation. The organization must adhere to the need to reduce the emission level, which creates a challenge for Amazon, whose operations worldwide are intense (Gunther, 2016). The company must comply with environmental regulation, sustainability, taxation, and other international and local legal and regulatory requirements to compete effectively in the retail market.
Although Amazon does not have direct business operations in Kenya, it ships its products directly to the country. Customers in the country orders from Amazon and receive their goods via air or sea since it lacks local operations. Thus, understanding the factors that affect operations in the country is critical through a PESTEL analysis.
Kenya has a ready market for many international companies due to its appealing demographics, such as a well-educated workforce and consumers, high domestic demand, and receptiveness to innovation (Murphyopere, 2017). Although Amazon does not have direct operations in the country, Kenya has proven to be one of its most important markets through shipping to the consumers. Kenyan consumers are aware of their needs and prefer products that address them and support their interests, which Amazon has managed to meet over the years.
Regardless of challenges facing the global economy due to the COVID-10 pandemic, Kenya’s economy is anticipated to continue performing well to support business operations for multinationals. The Kenyan government has implemented strategies, such as modernizing the agriculture sector, strengthening SMEs, and investing in ICT, which will boost the economy and support business operations for companies, such as Amazon (Murphyopere, 2017). Besides, compared to most African countries, Kenya has a strong financial position.
Kenya has developed many trade partnerships with foreign countries and is receptive to foreign investors, who have always played a key role in its economic development. The current environment supports foreign investment due to reduced trade barriers. However, the government should address some challenges to make the environment better for multinationals, such as current account deficit and low R & D (Murphyopere, 2017). Trade in the country, including for multinationals, remains effective due to the supportive regulatory environment.
Various social factors affect the operations of multinationals in Kenya. The country is receptive to foreign investment and global products that meet their needs. Kenyans are aware of new consumer goods developing around the world and are always ready to try (Murphyopere, 2017). However, issues such as ethnicity and social conflicts could affect the business negatively. Regardless, many educated Kenyans create an effective social environment for multinationals worldwide to succeed in the local market.
Cultural diversity is one of the factors that could have an impact on businesses operating in Kenya. The country has embraced local and international cultures and practices that are beneficial to global companies (Murphyopere, 2017). However, multinationals should understand cultural practices that hinder operations, such as ethnicity and tribalism. Regardless of the negative factors, multinational companies continue to succeed in the Kenyan market due to its people’s welcoming culture.
The country’s legal environment remains uncertain due to issues, such as lack of regular reforms in the constitution and lack of capacity at the Kenya Law (Murphyopere, 2017). However, the country has a legal system supporting foreign investment, which is a significant contributor to its economic development.
Various political factors affect Amazon’s operations in Kenya. For example, regardless of considerable peace in the country, it has a transitional political environment, which causes political uncertainties and jostling for political space among political leaders (Murphyopere, 2017). The country has a high level of impurity that an international company should understand before commencing operations. Regardless of the issues, the Kenyan government is supportive of multinational operations.
Amazon ships products directly to Kenya, but it could become more effective by directly running the country. For example, the company could partner with an online platform in the state or acquire a brick and mortar store to increase its operations in the target market. Kenya has the potential for Amazon as it strives to become more competitive in the retail market. Besides, its competitors in the ecommerce and physical stores are always innovating, creating the need to follow suit or risk losing the global market share to rivals.
Amazon is a leading ecommerce business in the retail market with operations around the world. However, while it operates in most of the countries in America and Europe, its operations in Africa remain limited. Therefore, to succeed in the market, the company should embrace a new model, such as direct operations in a country, such as Kenya. However, the management should understand the external factors that could support hinder its success in the foreign market. The management should consider the most effective model to enter the Kenyan market and take advantage of its potential to improve operations, increase market share, and become more competitive.
Bedard, P. (2017) ‘Obesity becomes worldwide epidemic, US is the fattest.’ Washington Examiner.
Daily Mail. (2017) ‘REVEALED: Amazon is under federal investigation for selling goods to someone on the terrorism list and possible US sanctions violations.’ Daily Mail.
Denning, S. (2017) ‘Apple, Google And Amazon: How to Understand Capitalism’s Future.’ Forbes.
Gunther, M. (2016) ‘Can Amazon’s new ‘dream team’ fix the company’s sustainability reputation?’ The Guardian.
Murphyopere, B. (2017). Strategic management tools, techniques and structure of large scale manufacturing companies in Kenya (doctoral dissertation, School of Business, University of Nairobi).
Sindi, S. and Roe, M. (2017) ‘The Evolution of Supply Chains and Logistics.’ In: Strategic Supply Chain Management (pp. 7-25). Springer International Publishing