External Environment Analysis for Overstock.com

by Ophelia Klaus, May 2015

300 words

1 page


This paper discusses threats and opportunities in the remote and operating environments for Overstock.com company, relying on PEST framework and Porter's Five Forces model.

PEST framework provides four dimensions for external analysis, including political, economical, social and technological factors. For Overstock.com, under political factors one should consider taxes, trade restrictions and employment mostly. Taxes and trade restrictions could be identified as threats due to the unstable market situation. This could harm employment, despite current rates in Forbes and Glassdoor. Alternatively, economic growth might be an opportunity for the business since drives drops in interest rates and opens free market sectors. Under social factors the only threat is linked to emphasis on safety and health since goods purchased through the company could not be checked before the actual purchase. Technology is an opportunity since it actually is an initial focus-driven business connected with online distribution.

Porter’s Five Forces model provides additional perspectives. First, the supplier power is mostly an opportunity since company operates for 13 years already and acquired lots of loyal suppliers in various fields of services for that time. Second, the buyer power is also an opportunity as listed under the revenue field in company information. Third, there are no specific threats of new entries or substitutions since the company already covers various services. Particularly, there is a slight thread for new entries with lower prices inbound. Therefore, competitive rivalry is higher due to the market ownership and successful company history.


PEST analysis. (2007). Retrieved on August 15, 2011 from: HYPERLINK "http://www.quickmba.com/strategy/pest/" http://www.quickmba.com/strategy/pest/

Porter’s Five Forces. (2009). Retrieved on August 15, 2011 from: HYPERLINK "http://www.mindtools.com/pages/article/newTMC_08.htm" http://www.mindtools.com/pages/article/newTMC_08.htm

Overstock.com. Retrieved on September 7, 2012 from: HYPERLINK "http://www.overstock.com/?TID=ObizHeader:Shopping" http://www.overstock.com/?TID=ObizHeader:Shopping

Overstock.com. Who we are. Retrieved on September 7, 2012 from: HYPERLINK "http://www.overstock.com/about?TID=FOOT:CI:ABOUT" http://www.overstock.com/about?TID=FOOT:CI:ABOUT



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