Question

Regarding Amazon Go: physical store with sensor and AI technology located in Seattle:

1. Could Amazon replicate the competitive advantage that contributed to its online success in the offline retail markets?

2. Could the company leverage its existing online assets and capabilities in the offline segments?

3. Given this diversification, how could Amazon manage the efficiency of its operations and the quality of its products in the long term?

4. Did the company have capabilities to do so?

5. Would Amazon Go change the way people bought and consumed as Amazon.com had done so successfully before?

6. Would the company be able to go against the trend of grocery shopping, which was increasingly moving toward online markets?

7. Could the company develop these offline retail offers globally?

8. Could competitors easily imitate this innovative shopping technology?

9. Finally, given potential job cuts, would Amazon face resistance from store employees and unions?  

10. Were Amazon’s diversifications through Amazon Go and Amazon Elements appropriate, given the company’s resources and capabilities? Were such diversifications risky strategic moves?

11. Can Amazon reproduce its online retail success in offline retail segments? Will it be able to become one of the biggest offline retail players?

12. As the first mover in its shopping technology, will Amazon Go be able to succeed in the long term?

13. Being the first mover in “checkout-free” convenience store, how can Amazon Go maintain its competitive advantages in the long term? How can Amazon avoid failures such as the diaper brand it introduced in 2014 and make Amazon Elements successful? How should Amazon differentiate the products it offers via Amazon Elements from the products of the suppliers on its platform?

14. Could Amazon’s offline retail marketing concept be developed globally?

15. Was Jeff Bezos the right person to lead the company in facing the challenges of new offline retail ventures?

Answer 1

1. Could Amazon replicate the competitive advantage that contributed to its online success in the offline retail markets? Replicating the competitive advantage in offline segments is difficult as a lot of infrastructure investment and technology would be required, but when Amazon changed the face of online shopping and make it door to door services, no body even thought it would have become The Amazon. The company the edge of innovation and has the money to do it.

2. Could the company leverage its existing online assets and capabilities in the offline segments? The company can leverage the assets, but the should not. the new vertical's failure/success should not impact the existing successful business. If the company has the investments to start it up as new segments with individual funding, it would be safer.

3. Given this diversification, how could Amazon manage the efficiency of its operations and the quality of its products in the long term? It would be a rough road at the start. Technology is the weapon for amazon and if used in the right direction and with correct supervision, can make this a success. Operationally it will be challenge to put a face to amazon and strong background/experience would be needed to chalk out this segment.

4. Did the company have capabilities to do so? Yes

5. Would Amazon Go change the way people bought and consumed as Amazon.com had done so successfully before? When they did it earlier, they can do it now as well, as they well experienced and way well established in the industry. Innovation is key to keep the system going, thats what Amazon is doing.

6. Would the company be able to go against the trend of grocery shopping, which was increasingly moving toward online markets? They do not want to leave the offline market untapped and hence it is a way of portfolio expansion with technology

7. Could the company develop these offline retail offers globally? They should not step in global markets. Developed countries should be targeted and experimented upon.

8. Could competitors easily imitate this innovative shopping technology? They can, but Amazon will always be the pioneer and will be a step ahead of competition.

9. Finally, given potential job cuts, would Amazon face resistance from store employees and unions? Potential job cuts is unlikely as a new leg of the business would create jobs instead. AI is the future and keeping the existing segment live, there will only be job creation.

10. Were Amazon’s diversifications through Amazon Go and Amazon Elements appropriate, given the company’s resources and capabilities? Were such diversifications risky strategic moves? It is was a risky move. But a giant like Amazon has to keep innovating and keep looking for a better and developed future. Diversification is way of expansion, the results can be like flipping a coin.

11. Can Amazon reproduce its online retail success in offline retail segments? Will it be able to become one of the biggest offline retail players? The competition in the market is huge and players are well established since decades. Success in this segment can only define by a USP which can be AI.

12. As the first mover in its shopping technology, will Amazon Go be able to succeed in the long term? When you see long term, technology will keep evolving, AI is a new and better future and shopping is a hobby which can never be given up. Hence a hobby with technology can never be obsolete.

13. Being the first mover in “checkout-free” convenience store, how can Amazon Go maintain its competitive advantages in the long term? How can Amazon avoid failures such as the diaper brand it introduced in 2014 and make Amazon Elements successful? How should Amazon differentiate the products it offers via Amazon Elements from the products of the suppliers on its platform? This segment should deal in basic day to day requirements in households, instead of heavy appliances. Things that people buy almost everyday should be the target so that buying in this store becomes a necessity or a habit everyday.

14. Could Amazon’s offline retail marketing concept be developed globally? They should not step in global markets. Developed countries should be targeted and experimented upon.

15. Was Jeff Bezos the right person to lead the company in facing the challenges of new offline retail ventures? He could be right person though, we should have someone who is experienced enough with highs and lows of the industry.