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What is amazon’s business strategy?

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Amazon is a household name in online retailing, and almost everyone buys from them. But how did the company grow so large to become number one? Were they always this big, or did they grow gradually? Amazon did not grow overnight at all, but we’re impressed with what they’ve achieved since 1994 to date. As such, we’ll be exploring the Amazon business strategy that helped them to achieve everything we see today.

Amazon started by selling books online.

But today, it has become a globally recognized online store that millions visit every day.

Amazon sells everything that can be sold online.

Apart from products, the company renders lots of services to millions of people all over the world.

This is commendable, but we know that they could attain this great height by combining different strategies and technology to achieve customer satisfaction.

RELATED: 10 BEST FINANCIAL STRATEGIES THAT WORK

So, if you’re interested in learning what made the company such a global wonder, keep reading.

You’ll see how the company became very successful and the strategies they employed to achieve it in 27 years of business operation.

We hope that you can also replicate these strategies to make your own business very successful too.

Let’s do it!

Table of Contents

Amazon business strategy

Here are the strategies that have led the company to success.

The pursuit of long-term goals.

According to Amazon CEO Jeff Bezos, the company pursues more long-term objectives to improve their customers’ experience.

For instance, Amazon Web Services (AWS) started as a platform to offer database storage, compute power, and content delivery for developers and startups.

But gradually, expanded to serve millions of Amazon customers all over the world.

Many companies like Airbnb, Johnson & Johnson, Pinterest, McDonald, etc., are all using AWS.

This is why Jeff stated that the company plants their seeds and patiently nurture them to become large trees.

Building around customer desires that doesn’t change.

Three things won’t ever change when it comes to customers buying behavior.

  • Product varieties
  • Low prices
  • Fast delivery

Every customer wants to have many product options to pick from, no matter the type of product or service.

Having varieties of products makes customers happy and confident that they can find what they want in the store.

Also, finding a product they like and buying the product at an affordable price makes them happier.

Once they decide and purchase the products, they don’t want to wait for donkey years to get their prize.

They want it to reach their destination in the shortest time possible.

These three factors are what Amazon ensures to achieve, and it has helped them a lot to be the customer’s favorite online store.

Their online store makes more sales than anyone can imagine every day.

According to the company, any business that builds around these unchanging customer desires will be successful.

Instead of focusing on transitory things such as technology or competitors, you should focus on things that won’t change regarding customer satisfaction.

Focusing more on the opportunities.

One Amazon business strategy that has made it possible for more expansion is that they focus only on opportunities and not the failures.

The company CEO says that they focus on planting seeds and hoping that they grow into profitable trees.

According to Jeff, any business that frequently invests without minding the possibility of failures will always achieve good results.

The more seeds you plant in your business, the higher the likelihood of getting more trees in the future.

In the early years of Amazon, Jeff Bezos took some risky decisions by investing in warehouses that led to a drop in its stock prices.

In those years, it seemed that such moves he made were not wise.

But with time, those investments contributed to their success in online retailing.

Sometimes, most of your business decisions will not work out.

But it shouldn’t stop you from making bold moves because one or two amongst them will turn out to be the push you need to grow.

Operating with strong leadership principles.

One of the things that have made Amazon very successful is its leadership principles.

According to the company, they use these principles daily no matter what they’re doing.

It doesn’t matter whether they’re discussing new project ideas or trying to find a solution to a problem.

These principles have helped them to achieve the position as the number one online retail shop in this era.

The main Amazon’s leadership principles include:

Customer obsession

All the leaders in the company focus on earning customer trust.

Even while minding the competitors’ activities, they never compromise their focus on making the customers happy.

Ownership

Every leader in Amazon sees the company as their own.

They don’t operate with the carefree attitude that people put up when they see themselves as employees.

Instead, Amazon leaders act and think long-term for the company.

Invent & simplify

Amazon business strategy leaders understand the importance of innovation.

As such, they work with teams that innovate and invent.

By searching for ideas, innovating, and inventing even the novel ones, they can achieve great feats.

Are Right a Lot

Amazon works with leaders with strong judgment & good instincts.

These leaders work with different perspectives on issues.

Learn & be curious

Amazon leaders believe that constant learning is necessary for self-improvement.

They’re not tired of learning and are always willing to learn and explore new possibilities.

Accepts only high standards

Amazon works with leaders who would always demand the highest standards on everything.

They don’t mind whether others perceive these standards as unattainable.

Amazon leaders encourage the teams always to deliver the best products and services.

Anything below their high-quality standard is not acceptable.

Hire & Develop the best talents

Another leadership principle of Amazon is to hire & promote exceptional talents.

They’re not biased or afraid of upcoming talents.

Instead, they focus on developing other leaders from their teams.

Think big

Every Amazon leader must always think big and communicate these bold ideas in a way that ensures intended results.

These leaders think outside the box when it comes to achieving customer satisfaction, and it has helped them a lot.

Frugality

Amazon leaders usually focus on how they can achieve more goals with lesser resources.

They don’t believe in increasing budget size, headcount, or fixed expenses.

Instead, they try to be inventive, resourceful, and self-sufficient.

Have backbone

Amazon leaders are strong when it comes to challenging decisions that don’t seem customer-oriented.

They often don’t mind the stress of making their opinions heard, and they don’t accept all to conform to social norms.

But whenever the decision is finalized, they commit to it wholeheartedly.

Earn trust

Every Amazon leader aims at earning the trust of others, and as such, they listen to their subordinates and also improve on areas where they’re lacking.

Deliver results

Leaders in Amazon believe in results no matter the setbacks.

As such, they do everything possible to make the customers happy always.

Focusing on customer satisfaction and not on competitors.

Here is another Amazon business strategy that hasn’t failed yet.

The company doesn’t focus on beating their competitors but on improving their customers’ experience always.

One of the strategies that CEO Bezos depends on to succeed is making sure that they reduce the possibility of producing unsatisfied customers.

The company focuses on customer satisfaction more than beating competitors.

According to Jeff, they work to achieve 100% customer satisfaction and also try hard to maintain it across millions of people.

Many insiders in the company revealed that the CEO would usually keep an empty chair in their meeting room for an imaginary customer.

They said that Jeff always tells the staff that the fictional customer is their VIP in every meeting.

So, since the customer is present, the staff should always think of what the customers would want from the company.

Achieving customer satisfaction through ever-expanding product options.

Here’s another strategy that helped Amazon business become number one in online retailing.

The company focused on satisfying the customers by offering diverse product options for them to choose from.

Apart from that, they also provide personalized products that cater directly to the needs of the customers.

According to the CEO, their strategy of putting the customers first has helped them a lot.

It has proven to be a success driver, and they’ve stuck with it for 18 long years.

Usually, Amazon takes time to study customer purchase behavior.

amazon logo with 5 stars to evaluate their services and understand the customer satisfaction - amazon business strategy

With that, the company takes an individual approach for all their customers.

As a company, Amazon identified that the majority of its customers are upper and middle-class individuals.

These target groups appreciate technology and prefer to save lots of time by shopping online.

The company focuses on them and provides reviews and product options that can serve them based on their purchase behavior.

Delivering speedy service to achieve customer satisfaction.

One other impressive Amazon business strategy is delivering speedy service to their customers.

Amazon doesn’t accept any form of delay when delivering both products and services.

Do you know that the company also ensures that their web pages load as fast as even Google to eliminate customer dissatisfaction?

According to Amazon business strategy metrics, a 0.1 seconds delay in web page loading can mean a 1% drop in their customer’s activity.

This is why the company would give anything to prevent delays in product or service delivery.

To even improve customer satisfaction, Amazon adds value efficiency in operations to fast delivery.

All these efforts to improve the customer experience translates to customer satisfaction.

Offering competitive prices to ensure customer satisfaction.

In Amazon’s leadership principles, we noted that frugality is part of it.

Amazon leaders try to achieve lots of things with minimal resources.

This is why Jeff could offer low prices to their customers.

Frugality helps Amazon to operate at a lower cost to enable them to keep their services affordable to customers.

By reducing or even eliminating unnecessary expenses, it becomes possible to offer competitive prices.

If the operational costs are always high, there’s no way to protect the customers from high costs.

We already noted one of the things that won’t change consumer buying behaviors is the need for low prices.

So, Jeff Bezos ensures that they build around these factors by running at a lower cost.

For instance, insiders reveal that the CEO uses low-cost equipment, maintain a salary standard for himself and the management team.

Instead, he offers the workers part ownership of the company through the company’s stock.

With all these steps, it’s possible to operate at lower costs, thereby protecting the customers from price exploitation.

Training employees to understand their customers.

Jeff Bezos constantly trains the employees and managers on customer experience so they can understand what their customers pass through.

One of the ways he achieves this is by organizing a two-day training at the Amazon call center.

When the staff has seen what their customers are passing through, it makes them humble and willing to serve the customers better and patiently.

Apart from making the managers and staffs undergo this training, Jeff also lives by example.

He also walks the talk when the company makes mistakes that’ll hurt their customers.

On one occasion, the CEO sent out an apology for an error which the company made.

With that, he aimed at winning the customer who would have left the company.

Adopting an encompassing marketing strategy.

Amazon doesn’t play with its marketing strategy.

It utilizes word of mouth, Search Engine Optimization (SEO), and even PPC.

The great service they render to their customers encourages them to spread the word about Amazon to their family and friends.

When customers are happy, they willingly become advertisers.

This strategy is part of Amazon’s vision, as they described in a 2008 SEC filing.

According to the company, its vision is to improve customer experience by providing a wide selection of products and services at low prices and customer convenience.

Amazon business has been focused on this vision, and it is clear in their marketing strategy.

They try hard to communicate their value proposition through on-site and offline communications.

According to the information available on Amazon, they don’t depend more on advertising.

Instead, they focus on making their customers happy, who’ll, in turn, tell other people about the company.

Amazon first wins their customers over with excellent services, and these customers will become loyal and make repeat purchases all the time.

To ensure that they win the hearts of their customers, Amazon tries very hard to offer a user-friendly website interface.

Amazon designed the website to provide everything a customer needs to make a purchase decision easily.

For instance

Customers can find every piece of information about a product on the product page.

They’ll find the manufacturer’s product information, editorial & customer reviews, recommendations & notifications, questions and answers, image uploads, 1-Click tech, secure payment getaway, etc.

Another thing the company does to win their customers’ hearts includes free shipping on a certain level of purchases.

Yes!

There’s an amount of money you’ll spend on Amazon to receive the free shipping offer.

Also, the company ensures that its customers get the necessary information about their products while in transit.

They’ll get the estimated delivery date, shipment notification, expedited delivery options, and continuous updates on the movement of their products.

Apart from using the word-of-mouth marketing strategy, Amazon also spends money on digital marketing.

They employ workable SEO strategies, and it also contributed to the spike in their sales and overall success.

According to data, Amazon spent 90% of its marketing budget on PPC and SEO.

Many other companies online also understand the importance of these two digital marketing tools and don’t hesitate to employ them as Amazon does.

Investing in different technologies to improve customer experience:

Amazon adopts technology to improve customer experience.

As a business serving millions of people online and offline, Amazon focuses on everything that can ensure efficient operations and service delivery.

Here are some technologies that aid Amazon’s operation.

Robotics

Amazon started investing in robotics & drone technologies more than 10 years ago.

Presently, the company has above 45,000 robots working in its warehouse, and Amazon has acquired patents for these technologies.

Amazon started by acquiring Kiva Systems for $775 million in 2012.

This company designs robots that pick and pack items in the warehouse.

orange amazon robotics with a serial number as one of the way amazon investing business strategy

By this acquisition, Amazon got 14,000 robots working in its 10 warehouses 2 years later.

By 2015, the number of robots got to 30,000, and in 2017, Amazon got 45,000 robots working in its 20 warehouses.

Amazon didn’t just acquire Kiva Systems but also organize challenges for universities & institutions to invent the next-generation robot for a prize.

The prize for winning such a competition varies, but the 2017 prize amount was $250,000.

Drones

Amazon invests in drone technology to improve its service rendition.

The company is delivering products to customers with drones under their Amazon Prime Air.

A drone from prime air brand

This service enables a customer to get their products in under 30 seconds for an extra fee.

Amazon started the system in Britain, and in 2017, the United States government approved the system.

Some of the countries where Amazon has begun the drone delivery tests include the United Kingdom, the United States, France, Israel, and Austria.

Amazon has filed different drone patents that’ll facilitate package parachute, package delivery, plus an intended floating airship warehouse.

It presently has patents to design drones that’ll perform better in terms of long flights, maneuvering, and secure landing.

Alexa

Amazon is also investing hugely in artificial intelligence, a branch of computer science that creates intelligent machines.

Amazon business strategy is to aim at improving its customer experience by employing artificial intelligence and machine learning in its operations.

Some examples of such investments include the Amazon Web Service and Alexa.

One of the Alexa models showing the way of the amazon investing business strategy

Amazon established a research headquarter in Germany to develop AI.

This was in the last quarter of 2017, and the same October, Amazon entered a partnership with Microsoft to create a tool that’ll facilitate the use of open-source AI software by developers.

In January 2021, Amazon introduced another service called “Alexa Custom Assistant” to aid the creation of custom-branded voice assistants.

Alexa Custom Assistant is a service that helps automakers, service providers, and device makers to create custom-branded voice assistants.

The target is to build Alexa into consumer electronics, like fitness devices, smart displays, set-top boxes, speakers, etc.

Amazon Web Services (AWS)

Amazon entered the cloud computing arena by acquiring many companies that operate in that space.

Afterward, they started investing in cloud-based businesses.

Some of the companies that Amazon acquired in 2017 include:

  • Thinkbox Software
  • GameSparks
  • Harvest.ai

Amazon also went further to invest in Grail, a possible user of its cloud services.

It has also taken some steps to increase the adoption of Amazon Web Services (AWS).

For instance, they’re currently channeling some investing funds toward some open-data centers in France and Britain.

Amazon Web Services (AWS) has also become a huge success as it provided up to 58.9% of Amazon’s operating income in 2020.

Amazon Go

This is an Amazon physical store where people can buy groceries without waiting in queues.

The company opened Amazon Go officially in 2018 as evidence of its advancement in ML.

screen of the "Amazon go" website

In Amazon Go Grocery, you can buy everything you need and get them fast without delay.

They also offer ready-to-eat snacks, lunch, breakfast in Amazon Go.

The exciting part is that you can “Walk Out” with everything you need, and Amazon will send you a receipt and charge your account.

Autonomous Vehicles

Amazon is not only concentrating on providing a marketplace for products of all kinds.

It’s now branching into automobiles.

It started the journey by acquiring Zoox for $1.3 billion, which shocked the tech & automobile industry.

Zoox develops autonomous driving tech, and its operation is based in California.

According to Amazon, their aim of the investment is to actualize their “autonomous ride-hailing” vision.

But before now, rumor had it that Amazon business strategy was aiming to join the race for driverless vehicles.

So, the recent acquisition is a step in the same direction.

Apart from Zoox, Amazon had also invested in Aurora and Embark.

While the former develops autonomous driving automobiles, the latter develop self-driving freight.

With all these investments, it’s clear that Amazon will soon incorporate automated delivery systems in its business strategy.

Amazon Entertainment business

Amazon has made some notable investments in the entertainment industry. The results of these investments are clear in some of the following services:

  • Amazon Prime Video; It has been competing head-on with streaming giants such as Hulu, Netflix, Disney, and HBO. Amazon made the streaming service free for its Prime Members, but non-members can use it for $8.99 every month. To facilitate the customer experience with its Prime video, Amazon acquired lots of movies and TV shows. They even acquired Runaways and Marvel’s Inhuman to rub shoulders with Netflix because they have bought Marvel shows.
  • Amazon also tries to improve the Prime Video by adding small-budget movies to its collection. Presently, Amazon has grabbed more market share in the US than Netflix. While the latter only has 73.94 million US subscribers, Amazon has 126 million subscribers.
  • Amazon Studios; Amazon was not satisfied with only the video-streaming services. So, it expanded to creating its film & TV series distributor, which they call “Amazon Studio” This studio helps the company to produce a large number of contents to compete with other entertainment giants. They have been so successful in Amazon Studio that many of its original contents have bagged major awards.
  • Prime Music; Video streaming is not all that Amazon is exploring in entertainment. Amazon ventured into music streaming as well. Now, Amazon has a music streaming platform that competes with giants like Apple Music, Spotify, SoundCloud, YouTube Music, etc. If you’re interested in music streaming, you can find millions of amazing songs in Amazon’s library. These songs are for the Prime members to enjoy as an incentive for subscribing to their services.
  • One awesome move that Amazon made is to integrate Alexa into the music app. With that voice assistant, you can find every song you want without stress.

Adopting different strategies to improve its logistics.

Amazon is working hard to ensure that its logistics goes smoothly and efficiently.

The company is opening many warehouses in different locations to support Amazon Fresh and Prime Now.

These two services center on grocery delivery, and even now, Amazon is aiming at the German market, where experts predict growth in online grocery delivery.

Some of the steps that Amazon is taking to ensure efficient logistics systems include:

  • Opening many fulfillment centers; as of January 2020, Amazon had 185 global fulfillment centers, and 110 out of them is in the USA. According to Amazon, they’re planning to open more fulfillment centers to ensure rapid growth in their FBA (Fulfilled by Amazon)
  • Logistics App; apart from the fulfillment centers, Amazon also planned and developed an application that’ll help its truck drivers. The app, which Amazon calls “Relay,” joined its operations in 2017 and presently helping truck drivers in their work. With the Relay, Amazon drivers can pick and drop off packages at the company’s warehouses without issues. There’s also a plan underway to launch another app that can connect its truck driver with the cargo they’re carrying.
  • Prime Air; here’s another logistics-related investment by Amazon. The aim of creating Prime Air is to deliver packages faster and safely. Amazon business strategy aims to use this service to facilitate its logistics so that people can receive their products within two days of purchase. Also, Prime Air aims at reducing the overcrowding that characterizes Amazon warehouses. The first demo of Prime Air took place in the United States in 2016. However, there’re still some regulatory milestones to meet before a wider operation.
  • Logistics Partnerships; Amazon partnered with E.Leclerc grocery retailer hypermarket in 2018 to install its lockers in their Spain network. They also partnered with another company DIA in 2017 for the same reasons. These partnerships and other Amazon investments in logistics indicate that it is also interested in running supermarket outfits to facilitate its product deliveries.

Pursuing an aggressive Mergers & Acquisition Strategy.

Another Amazon business strategy worth mentioning is its mergers & acquisition strategy.

According to reports, Amazon closes more than 30 deals in 5 years, of which 11 of those deals were completed in 2017.

Amazon closed its highest deals in 2017. But in 2020, it made a shocking acquisition, which was Zoox, worth over $1 billion.

Amazon took the step into the self-driving industry through Zoox.

It also channeled some investment funds into tech companies like Do.com and Harvest.ai, a company in the cybersecurity space.

Amazon also acquired Whole Foods with $13.7 billion and Souq.com, an international firm in the middle-east.

In 2018, Amazon also purchased Ring for $1billion plus.

The ring is a company that designs and makes video doorbells.

Amazon acquired it to enhance its Amazon Key service.

The main reason behind these acquisitions is to strengthen its e-commerce operations.

Each of these companies has something to contribute to empowering Amazon’s operations.

Amazon only invests in those companies that they need to improve their products and services.

This aggressive acquisition strategy has helped to place Amazon in the frontlines.

They don’t mind how much it’ll take them to acquire another company they need to further their agenda or goals.

Investing in New Businesses & Emerging Markets.

Another business strategy that Amazon has been pursuing is to invest in new businesses & emerging markets.

The first to note is that Amazon has been taking part in the Fintech industry, although at experimental levels.

In 2016, Amazon created small loans of almost $1billion to many people.

In India alone, Amazon extended loan instruments to many e-sellers to help suppliers operate better and handle seasonal spikes faster.

Another step Amazon took in fintech is the launching of Amazon Cash.

This service facilitates the funding of user’s Amazon.com balances through barcodes.

Once a user shows the barcodes at any brick-and-mortar checkout, they’ll automatically fund their balance.

When it comes to investing in emerging markets, Amazon has been targeting India.

This country is a fast-growing e-commerce market, and Amazon is planning on positioning itself to reap the upcoming benefits.

Five years ago, in 2016, Amazon CEO Jeff announced that they were making more investment in India.

According to Bezos, the company is adding $3billion to its first $2billion investment in India.

With all the money Amazon invested in India, it wasn’t surprising when the company opened its Amazon Foodservice in the country.

They launched the service in 2020 when the pandemic was ravaging the world, and everybody was on lockdown.

Another emerging market that Amazon invested in is Brazil.

The company announced this move in 2017 and revealed that it is after Brazil.

Amazon went into the Middle East as well by acquiring Souq operating in the United Arab Emirates.

Through Souq, Amazon acquired Wing. ae a company that facilitates e-commerce deliveries.

Another move by Amazon into emerging markets was in 2020 when it opened Amazon Pharmacy.

This venture is a threat to US healthcare because Amazon delivers prescription medicines to their customer’s doorsteps.

Imagine a service that allows Amazon customers to browse medications on Amazon.com and complete all other processes that’ll facilitate delivery to their doorsteps.

This service is mostly available for Amazon Prime members unlimited.

They can get their medications within two days of placing the orders on Amazon Pharmacy.

amazon pharmacy website screen

All these investments into emerging markets and new business is another strategy that is solidifying the company’s first position in online retailing.

Amazon financial strategy

Every company has laid out goals that it aims to achieve, and to do that; it needs a financial strategy.

As other companies operating in the business environment have their own goals, Amazon does everything to increase revenue and utilize it for goal achievement.

So, what is Amazon’s financial strategy?

  • Acquisitions
  • Investments

– Acquisition

One of the financial strategies of Amazon is to acquire companies that look promising and future-oriented.

Amazon purchases many companies to support or boost the operations of its core services.

Sometimes, they aim to venture into new industries by acquiring companies operating in the space.

In 2017, Amazon made 10 acquisitions, which surpassed its previous records of past years.

Before 2017, Amazon only made below 5 M&A deals, but it became very aggressive in purchasing other companies from then on.

For instance, Amazon spent only $103M in 2016, but it spent a whopping $14 billion in 2017.

A closer analysis of Amazon’s acquisitions clearly shows that the company spends good money when the right opportunity appears.

Also, Amazon focuses on the long-term benefit of a company in bolstering its goal achievement before purchasing it.

Some of the notable acquisitions by Amazon include:

  • Whole foods which Amazon bought in 2017 for $13.7B
  • Zappos, which Amazon acquired in 2009 for $1.2 billion
  • Ring for $1billion in 2018
  • Twitch for $970 million in 2014
  • Kiva Systems in 2012 for $775 million

Amazon has made many other acquisitions since its launch.

But one thing to know is that all these companies it bought are fast-growing businesses that have become very significant in Amazon’s operations.

A company like Kiva systems producing warehouse robots helps Amazon reduce operating expenses in its fulfillment centers.

The truth is that many people reacted negatively to these acquisitions.

But the retail giant often made it clear that they focus on the future.

So, it’s obvious that Amazon is pushing its agenda gradually and successfully through acquisition.

For instance, Souq.com’s acquisition of Souq.com helped Amazon expand into the UAE, Egypt, and Saudi Arabia.

Also, many other acquisitions by Amazon in 2017 were to bolster its AWS services.

It purchased Havest.ai and Goo technologies to strengthen its cloud offerings and encourage game developers to use AWS.

Other acquisitions furthering its AWS (Amazon Web Services) agenda include Body Labs, Do.com, Blink, etc., and right now, Amazon’s AWS is pulling in high revenue for the company.

– Investments

Apart from acquisitions, Amazon has made and is still making a lot of investments.

From 2011 to 2013, it seemed that Amazon concentrated more on investing in internet companies.

From 2014 to 2016, Amazon started investing in other industries such as mobile, Auto and Transport, and media.

They also invested in Yodel Delivery company operating in the United Kingdom to improve its own logistics network in the UK.

Yodel Delivery website screen

Amazon invested in Grail in 2017 as a step towards expanding into life science.

It also fostered a partnership with Twilio to boost its communication system via voice messaging and text.

In 2015, Amazon created an investment venture called Alexa Fund.

Since then till date, Alexa Fund has invested in 102 startups in many industries.

It has invested in Health, AI/ML, Fintech, Hardware, Robotics, Gaming, Smart Home, Voice Dev Tools, Robotics, and Mobility.

Alexa Fund has made at least 10 investments in AI startup, 13 in Healthcare, and 11 in Smart Home startups.

All these investments are part of Amazon’s financial strategy to boost its revenue and achieve more of its goal.

For instance, AWS was the highest arm of Amazon that pulled in the highest revenue in 2020.

The segment is increasing its earnings through global sales of AWS storage, compute, database, and others.

AWS is focused on startups, academic institutions, and Government agencies.

Even though AWS is competing with giants like IBM, Microsoft, Oracle, and Google, Amazon is still very profitable.

Amazon different businesses

Amazon started selling books online and gradually expanded to sell almost everything.

But did the Amazon stop there?

No!

It has expanded further to incorporate other businesses under its umbrella.

The following are other Amazon businesses:

1. Audible

This is a business that produces and retails audiobooks in the US.

The company is known as Audible.Inc is one of Amazon’s popular companies.

Screen of the "audible" with an image, where a woman id listen to something with her headphones

Amazon acquired Audible in 2008 for $300 million and made it one of its subsidiaries.

Audible sells audiobooks and also provides downloadable audio magazines, radio programs, and newspapers.

2. CreateSpace

This is another Amazon business strategy that focuses on content publishing & content distribution.

It was a creation from two acquisitions that Amazon made in 2005.

The company first bought CustomFlix, an on-demand film distribution company, and later bought BookSurge, another on-demand book publishing company.

Four years later, the two companies merged into CreateSpace and now combines Kindle Direct Publishing.

CreateSpace provides a platform where musicians, authors, and filmmakers can publish & distribute their content.

By using CreateSpace, professionals in this space can launch their work without thinking about a massive budget for it.

Apart from creating new content, you can find lots of materials on publishing-related topics.

3. Goodreads

This is another subsidiary of Amazon that has over 90 million active users.

It is an online community of people who love to read books.

The members of this website come from all over the world, and they quickly discover new titles from their past book choices.

Members of Goodreads also give reviews of the books they have read and can also share their reading list on the platform.

some people are looking at the sunset

Also, self-publishing authors use the website to promote their books and facilitate readers’ engagement.

The website started in 2007, but Amazon acquired it in 2013.

4. IMDb

This is a database of movies, television shows, producers, and actors.

This online database has it all if you want to find any information on your favorite actors or movies.

The present CEO of IMDb is Col Needham, and he has been running the movie database for many years now.

the screenshoot of the IMBD, where you can choose a film

Amazon bought the business from Col in 1998 and retained him as the CEO.

After acquiring IMDb, Amazon is using the platform to promote its movie products, videotapes, and DVDs.

Apart from serving as the promotional medium for Amazon, IMDb contributes to its revenue through ad revenue and subscription income from IMDbPro.

Now, IMDb has a video service, which they call Freedive, a free streaming video service that supports ads.

It started this service in 2019, but Amazon has rebranded it to be called IMDb TV.

5. Whole Foods

Amazon spent $13.7 billion to acquire this organic food retailer.

The acquisition occurred in 2017, and Amazon used it to access and utilize its brick& mortar presence.

Whole Food is a retail outlet that centers on healthy foods.

But after the acquisition, Amazon introduced some changes to its operations.

Amazon introduced its lockers in the company’s stores to provide a safe place for food deliveries.

Their presence also brought more customers into Whole Foods.

But Amazon also gained a lot from the acquisition.

They found a way to offer fresh foods to their customers, which has proven difficult in the past.

6. Woot

Woot is a discount retailer operating online.

Amazon acquired this company in 2010 to expand its e-commerce business.

Woot is popular for offering its customers enticing discounts on a specific product every day.

They can pick any product from different categories such as clothing, electronics, wine, etc.

7. Zappos

This is an online shoe store that Nick Swinmurn opened in 1999.

According to the story, Nick looked for a particular brand of shoes online and couldn’t find it in any online store.

Due to his disappointment, he decided that opening a shoe store can help him correct the oversight.

Fortunately for Nick, the online shoe store grew without him spending money on ads.

"zappos" screenshot with the section about us

Instead, he relied on word-of-mouth to grow his customer base.

Within a short time, the store very large and popular in retaining shoes online.

Amazon came into the picture in 2009 and bought Zappos for $1.2 billion.

But Amazon allows Zappos to continue its operations independently as a separate entity.

How can Amazon improve their business?

Given the progress that Amazon has made in its business, one could wonder if there is a need for improvement.

However, there’re few things that Amazon can do to climb to greater heights farther than where they are right now.

1. Identify Key strengths and refocusing on them.

Amazon needs to focus on those key competencies and explore them to the fullest.

It has to identify the businesses that are profitable and ignore those that are not working.

That way, Amazon can channel its resources to strengthen those profitable ventures.

Also, by focusing on its core competencies, it can diversify or even integrate other businesses that will supplement their main businesses.

2. Amazon should expand towards cloud-based services.

Cloud-based services will soon become a hot trend in this era.

This is a digital age where companies rely on Big Data for decision making.

Amazon should expand into this market and establish itself amongst the leaders in the space.

Also, investing in cloud-based services will provide supplementary imperatives to its core competencies since it is a platform built on the internet.

We can say that Amazon is already adopting this strategy through its AWS/Amazon Web Services.

But it can still take it a step farther by creating a Big Data Service to complement AWS.

It has expanded one of its core competencies, which is AWS, and provided a buffer for occasions of failures.

3. Global Expansion.

Amazon should expand globally to improve its product offers and service rendition.

By expanding globally, the company will achieve economies of scale and also experience unprecedented growth.

Amazon is indeed serving a global market, but it can do more by setting up local portals in those countries too.

Final Words

Even though Amazon’s market development seems speedy, it is now clear that they have been working towards such results.

From the business strategies we’ve explored so far, we can now believe Jeff Bezos when he said that they plant seeds and nurture them to trees.

Amazon pursues aggressive business strategies to achieve its goals.

They pursue long-term goals, offer various products and services, expand globally, invest in core technologies, and ensures customer satisfaction every step of the way.

The company has also expanded from sales to other industries such as health, entertainment, technology, etc.

Amazon’s CEO always emphasizes customer satisfaction above other things.

He even provides training to the staff to make them understand what their customers are experiencing.

Amazon first wins the loyalty of its customers, who will, in turn, spread the word to their network of friends.

Any business that adopts these Amazon’s business strategies will also record great success.