Amazon is my favourite disrupter. This is because they are disrupting in both the digital world and the real things world at the same time. Apple similarly distrupt in both the digital world and in the real things world with their smartphones, laptops and watches. Alphabet (Google), Facebook and Microsoft are focussed upon the digital world but from time to time dip into the real things world.
But Amazon is the one that makes disrupting its prime (forgive the pun) mission. Jeff Bezos the founder thinks a certain way and he has been very successful at implementing his thinking. But it is his decision to segregate his thinking into two distinct innovative pathways that has in my opinion made him so successful. He has a real physical product way of thinking alongside a digital way of thinking. It is the combination of the two that makes Amazon so successful.
The real physical product world is about product design, manufacturing, warehousing and physical distribution. Now Amazon does not currently lead in all these areas since it would be impossible to do so for the millions of physical products that exist in our world. But deciding to focuss upon the warehousing was a very clever starting point. It is a physical storage hub not dissimilar to digital storage hub. With warehousing secured you can build out from them the "to the door" distribution networks. You can build the warehouse to warehousing global interconnecting distribution networks. You can provide warehousing services to manufacturers and other distributors. You can then move out along these distribution channels back into manufacturing and distribution buying up and investing where you see fit. So you can look to own all the sales and distribution of all physical products. Now when you align this with a even more successful digital strategy the two compliment each other making your domination unstoppable.
The digital strategy lead by sales based upon the "one click" customer purchase experience created a defining moment in everybody's living rooms. View the "whole world's product catalogue" of both physical and digital products allowing for instant purchase. Owning the "front end" sales funnel guaranteed success. Then establish ways to bring customers into this funnel like creating an entertainment media streaming channel called Amazon Prime Video (films and documentaries) along with the use of a voice activated channel device (Echo). Then package up and support a total subscription services channel like Amazon Prime covering both real product and digital product distribution. This is only the customer facing parts. Possibly most significantly behind the scenes is a an enormous digital infrastructure. where Amazon has created their own datacentres supporting Amazon cloud services inclusive of all the hardware and software. These are the digital equivalents of the real product warehouses. Both occupying real buildings and having real equipment. Within these data centres Amazon runs AWS (Amazon Web Services) and it not only fully supports Amazon it is sold as a service to many other businesses. AWS is a powerful leading edge digital implementation of Cloud Computing. So Amazon is advancing on both the physical product and digital product distribution channels.
So Amazon has all these strategies for the physical and digital worlds. They have an outstanding vision. But this vision does not just apply to the way they intend to trade it also defines the way they intend to finance these developments. Amazon breaks the usual rules of business. It is at present not interested in making money that is paid out as profits in the form of shareholder dividents.The profits it makes are ploughed back into research and development. At almost $30bn a year with this size of investment being more than any other company in history. The object is to keep growing the share price so if investors want money out they can sell shares often with their remaining holding not depleting in value much because of the ongoing share price growth.
It is easy to see why Amazon that with such a huge growth vision looks to have 10 to 15 year growth plans. It all stems from having a man at the top that has such a visionary capability. Jeff Bezos the ultimate visionary disrupter.
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