Amazon’s business strategy is built around a flywheel concept, where growth in one area fuels growth in others. The company’s Prime subscription service is a key driver of this flywheel, with its 100 million subscribers globally spending more than twice as much as non-Prime customers. Amazon’s vast product selection and customer-centric approach, combined with its fast delivery times, create a compelling value proposition for consumers.
Amazon Web Services (AWS) is another significant part of the company’s success, generating $25 billion in annual revenue and serving as a major profit centre. AWS’s profitability allows Amazon to invest heavily in new areas like artificial intelligence and logistics.
The company’s strategy also includes a focus on becoming a dominant player in every market it enters. It does this by creating a platform that other businesses rely on, thereby embedding itself into the fabric of commerce and everyday life. Amazon’s acquisition of Whole Foods and its push into physical retail demonstrate this approach.
However, Amazon’s relentless pursuit of growth has led to criticisms of anti-competitive behaviour. The company’s size and influence raise questions about its impact on competition and the health of the broader retail sector. Despite these concerns, Amazon’s flywheel strategy continues to drive its growth and dominance in various markets.
Go to source article: https://www.cbinsights.com/blog/amazon-strategy-teardown/