What are the key success factors and risks associated with the firm’s chosen competitive strategy?
Key success based on four principles: “Customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking.” By building on these principles, Amazon has developed a range of sustainable competitive advantages and became one of the most disruptive forces in the retailing industry. In fact, Amazon played a major role in the structural shift away from traditional brick-and-mortar retailing, especially in commoditized categories with low switching costs for consumers and intense price competition. While well-known companies like Borders, Linens ‘N Things, or Circuit City already left the industry, names like Barnes & Noble, RadioShack, or Office Depot struggle to match up with Amazon. This trend is further intensified by consolidation among mass merchants like Wal-Mart and direct-to- consumer sales by companies like Apple, for example. However, Amazon still faces intense competition from a variety of players in its rapidly evolving industries. Among them are not only physical retailers and other online retailers, but also companies that manufacture consumer electronics, companies 5 that provide cloud computing and data storage, companies that provide e-commerce services like website development, fulfillment, and payment processing, as well as web search engines, comparison shopping websites, publishers, and other media companies.
Amazon’s original focus was on selling books, and needless to say, they’ve adapted quite a bit. You can purchase anything—anything—through Amazon with the blink of an eye and have it delivered to your doorstep the next day. If that’s not convenience then I don’t know what is. Quite honestly, I don’t even know where to begin with Amazon because there’s pretty much nothing they don’t do. The point is, they’ve evolved this far because they value change and they value adaptability. That’s why the merger between Amazon and Whole Foods makes sense. Here you have two completely different companies fuzing together to forge not only a new alliance, but a new opportunity that, as a result, offers a new competitive advantage: options–a one-stop-shop for everything you need, now including organic produce.