Amazon Web Services’ Expansion to Russia and Mexico
Executive Summary
While globalization has posed numerous potential opportunities and threats in the international business arena, many of these opportunities and threats are specific to individual countries (Zhuplev, 2016). Therefore, a country risk analysis becomes a crucial element to consider for companies doing business on the international scale. In this view, country risk analysis has been the subject of extensive research in recent times with a focus on a range of opportunity and threat factors such as the economic, political, social and technological environments. The type of institutions involved in these analyses is equally broad ranging from debt-rating agencies, research organizations, political agencies, business entities and international entities like the World Economic Forum. Indeed, comparing countries such as Russia and Mexico as will be done in this study will influence the decision that Amazon Web Services will make regarding the market to invest and expand its services.
Introduction
(a) Statement of Purpose
The purpose of this paper is to diagnose the economies of Russia and Mexico and recommend the most suitable market for Amazon Web Services. For this to be achieved, a comparative PEST analysis of the two countries will be conducted with the aim of identifying the opportunities and threats associated with the markets. This will be followed by a recommendation on the most suitable market having many opportunities and few threats.
(b) A Description of the Company and Industry
Amazon is an American-based e-retailer established in 1994. Its Amazon Web Services is commonly known as cloud computing and platform that offers businesses with content delivery, database storage, and other applications that increase the scalability and growth of companies. Nowadays, the company is not only a leading online retailing firm globally but also an icon regarding online business. The company intends to expand its Web Service business into either Mexico or Russia. However, the selection of the appropriate destination can only be made when macroeconomic, social and political situations in the chosen countries are analyzed and compared.
Analyzing the Environments
RUSSIA: Opportunity, Threat Factors, and Future Trends
PEST analysis is a useful model that can be used when identifying the opportunities and threats that a particular market presents to a company. Some of the important factors related to the political, economic, social and technological environment. They will influence the success of Amazon Web Services in the new market.
Political Factors
The Russian economy is based on an open foreign relationship (Berger et al., 2017). Presently, the country has established official relationships with over 200 countries thereby presenting a good opportunity for the economy and various industry players. Russia is playing a very important part in preserving world peace and safety. Therefore, they have adopted the most recent technologies besides having the biggest store of nuclear weapons and the military that comprises the air force, the ground force, and the navy. The serves to strengthen the position of the country in world’s geopolitical space.
After being defeated in Afghanistan, Russia suffered bad economic and political turmoil, which shuttered the economy (Zhuplev, 2016). Since then, the country has been working hard to regain its financial stability, and the political leaders had to make some of the toughest decisions to recover their political stability. Currently, the national government is stable, and the political system is as per the country’s situation and convention. Although it is a federation, the role of the national government in business cannot be downplayed. Moreover, its judicial system is strong although the citizens lack freedom.
The peaceful and strong relationship that a country has with other nations is an important factor because it influences the growth of its economy and attracts more investors both from within and outside its borders (Berger et al., 2017). The political government plays a key role in running the business of the entire country to maintain the social and economic stability. To attract investors, Russia demonstrates an impression of security and safety including growth opportunities within the country. Therefore, Amazon Web Services will benefit from this initiative if it ventures into the Russian market.
Economic Factors
In Russia, energy prices have become stagnant, and capital and labor are fully utilized making its growth to drop below the pre-crisis rates. Therefore, it faces the challenge of ensuring its economy is stronger and less dependent on the oil industry making it a serious weakness...
References
Berger, R., Herstein, R., Silbiger, A. & Barnes, B. R. (2017). Developing International Business Relationships in a Russian Context. Management International Review, 57(3), 441–471
Cavusgil, S. T., Ghauri, P. N., & Akcal, A. A. (2012). Doing business in emerging markets. Thousand Oaks, CA: SAGE
Frynas, J. G. (2015). Global strategic management. Oxford: Oxford University Press.
Hamilton, L., & Webster, P. (2012). The international business environment. Oxford: Oxford University Press.
Jain, S. C. (2007). Emerging Economies and the Transformation of International Business: Brazil, Russia, India, and China (BRIC). Cheltenham: Edward Elgar Pub.
Millett, S. M. (2011). Managing the future: A guide to forecasting and strategic planning in the 21st century. Axminster: Triarchy.
PWC (2014). Doing Business in Mexico: Automotive Industry. PWC. Retrieved September 30, 2017, from www.pwc.de/de/internationale-maerkte/assets/doing-business-Mexico-automotive.pdf
Rovere, R. L. L., Ozo?rio, L. D. M., & Melo, L. D. J. (2015). Entrepreneurship in BRICS: policy and research to support entrepreneurs. New York, NY: Springer
external environment facing TOYOTA, the global car manufacturer. This paper discusses impacts of the company's internal organizational strategy (structures and management). The work is divided into two tasks. Task 1: Critically evaluates key factors (e.g. environmental, global, competition, technology) impact TOYOTA performance. Task 2: Provides strategic recommendations for senior managers of the TOYOTA. Examine the external environment of TOYOTA and how this impacts on the internal organizational strategy (structures and
Italy and USA Analysis COUNTRY A: Italy Introduce country PEST-C Political Environment Legal Environment Economic Environment Business Environment and Activities Analysis of Exports and Imports Balance of Payments and Exchange Rates Social Environment and Demographics Technological Environment Cultural Environment Hofstede's Country Characteristics Power Distance Index Individualism/Collectivism Masculine/Feminine Uncertainty Avoidance Index Long-Term Orientation Realistic Idea Rationale and Support COUNTRY B: United States Introduce Country PEST-C Political Environment Legal Environment Economic environment Business environment and activities Analysis of exports and imports Balance of payments and exchange rates Social environment and demographics Technological Environment Cultural Environment Hofstede's Country Characteristics Power Distance Index Individualism/Collectivism score91 13 Masculine/Feminine 13 Uncertainty Avoidance Index
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now