Amazon’s dominance in the market is attributed to its successful transition from a product-based model to a platform-based one. Initially starting as an online bookstore, Amazon gradually expanded its product range, leading to the creation of an online marketplace. This marketplace, or platform, allows third-party sellers to trade, which has significantly boosted Amazon’s revenue.
Amazon’s platform strategy is designed to create an ecosystem that encourages customer engagement, thus driving sales. The company employs a data-driven approach to understand customer behaviour and preferences, enabling it to offer personalised recommendations. Furthermore, Amazon’s introduction of Prime membership has created a loyal customer base, providing a steady stream of income.
Another key factor in Amazon’s success is its diversification into different sectors. Amazon Web Services (AWS), the company’s cloud computing arm, has become a major revenue generator. The company has also ventured into the entertainment industry with Amazon Prime Video and into the grocery sector with Amazon Fresh and the acquisition of Whole Foods.
Amazon’s dominance is not without controversy. Critics argue that the company’s platform strategy has led to anti-competitive practices, as Amazon can use data from third-party sellers to its advantage. Nevertheless, Amazon’s platform model has proven successful, cementing its position as a dominant force in the global market.
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