So I'm curious, how is Amazon able to execute so effectively in so many different spaces? It would seem to me that any company endlessly extending itself into new markets is doomed to lose sight of its core competencies and eventually collapse under it's own weight.
And yet Amazon still grows, and keeps executing. How is this possible? Is the 6 page memo the magic sauce of sprawling corporate empire governance? Am I just not understanding some fundamental tenet of business?
They appear to have a strong focus on what customers actually want, hire bright people to figure out how to build it, are willing to gamble on some of it even if boss disagrees, make sure they keep whatever they build lean + scalable, use that to be profitable at scale on low margins, and tie stuff together as much as they can for higher satisfaction of customers and cross-selling them.
I'm not an Amazon guy or customer. Just guessing from what I read. I am pretty sure that lots of big businesses going cheap on or ignoring workers' advice, investing in expensive or inflexible systems, and pretending to listen to their customers contributes to their loss of market share to both startups with high customer focus + flexibility and pivoting behemoths like Amazon that emulate that.
Our experience of mega-companies over extending themselves and crumbling are from a different period. Maybe.
And not all of them crumbled. Walmart did great.
But today we have A/B testing, Platform reuse for other business line(Cloud, site, Warehouses, trucks, etc), more predictable supply chains(ML), scary marketing techniques, small flat teams augmented by powerful tools, generous funding from the stock market, etc.
Now Amazon has it all. Their competitors ? not so much.
Like other sprawling corporations of the past- GE, Sony, Panasonic, IBM, etc- they can sustain losses in a space for years, maybe even decades if they think it will pay off eventually, on the strength of their other businesses. Not needing to make a profit is a powerful position to be in.
I'm actually cautiously optomistic for some stores. For example, I still go to Target since I want to see clothes before I buy them. And their store card gives you free 2 day shipping with no BS "membership fee".
I could see AMZN taking a huge dive if the economy slows down. Think about it - a lot of people will be looking for things to cut and that Prime membership may be the first to go.
I use a lot of in store pickup and free shipping offers from Walmart, Target, and Best Buy. Usually the prices are better too, until someone gets Amazon to price match. But I don't know why anyone would pay for Prime.
Eh, it's getting much easier to order online, try it on, and ship returns. After getting frustrated with stores not having the size of the item I wanted in stock, I started ordering online from specialty sites and haven't looked back.
The only problem is time though - it can take a couple weeks to do this.
https://twitter.com/gselevator/status/887023115288576000