Amazon doesn’t just compete – it disrupts
When Amazon wanted to enter the online shopping market, Amazon had the 3 ingredients it already needed:
1. The internet to connect consumers to their servers
2. A transportation system – Fedex/Postal services to deliver the goods
3. A payment system – Visa and Mastercard to facilitate payments
None of these Amazon had to pay for – they took advantage of these 3 ingredients being built and paid for by someone else.
They then set about perfecting ordering, warehousing and logistics – the undisputed leader.
Then they saw they had excess server capacity, so rented some of this to end users, disrupting the data centre model where you bought a server and rented space in a secure building.
With AWS you could dial up whatever you needed – with scale.
Amazon Prime – disrupting the model by locking in valuable customers with a $50+ membership fee in exchange for free delivery. Then giving them free movies via their own device .. disrupting again
Wholefoods – a genius move to start to compete head on with Walmart and other retailers.
Amazon Go – remove the friction in shopping in a store
Amazon Key – “in-home” delivery just launched. Amazon does not simply compete, it disrupts by developing a new category or market.
Who can catch them?