Amazon Business Strategy

Amazon Business Strategy of Blue Ocean and Red Ocean: Eat Them All

Every giant is scared of Amazon, wanna know why?

If you are to comprehend being giant both in terms of size and wildness look for Amazon(not that jungle) but Amazon of the Internet. Who would have thought that the online bookstore started in a Garage would turn out to be the cruelest bone breaker for every single corporate in this world?

You might be thinking Amazon is as normal as other giants like Google, Facebook, Microsoft but Amazon Business Strategy is unique in every way.

Evidently, Amazon has grown into a cannibalising animal looking to eat into every business existing on this planet.

You need some insights to look at this from the broader angle.

Let us take you deep inside the ocean of Amazon Business Strategy

The Blue Ocean Strategy – Amazon

Ocean, when remains blue, seems soothing to businesses but it is the most complicated milestone to achieve.

In a blue ocean mostly Monopolies dominate due to their unmatchable product/service capabilities, value propositions, product differentiation and relatively low pricing achieved after the economy of scale.

amazon business strategy
Amazon is white or black? Go figure.

Amazon created its Blue Ocean with Kindle where competition became irrelevant due to the value offered at the unmatchable price.

For now, AWS(Amazon Web Services) complements the Blue Ocean Strategy of Amazon where competition is catching up but still, Amazon remains the topmost Cloud Services Company.

Certainly, you need capital, R&D, workforce to get a Blue Ocean of your own but the most important aspect “Intent” makes the going easier.

The Red Ocean Strategy – Amazon

There is no bloodshed in the blue ocean but the Red Ocean is all bloody and messy with the cut-throat competition. Here the market decides the price which is irrelevant to the value provided and every player tries to beat the competition with low pricing and push marketing strategies.

amazon business strategy
Can you find amazon?

Blue Ocean was already bad for many as Amazon had the monopoly there but when Amazon entered the Red Ocean as well every other giant started to sharpen their knives.

Now that you know a bit about the Blue Ocean and Red Ocean Strategy let us take you through the never-ending war where a notorious player named Amazon has challenged everyone regardless of their stature.

Google – Not so Formidable

The great eCommerce site of Amazon is second to none and speeding in full throttle. Google tried to come up with Google Shopping in many parts of the world but still is not able to make a mark like expected being GOOGLE.

Google Pay started with a bang in 2017 when launched in India but now that vibrance seems lost somewhere in between. Evidently, Amazon Pay and Google Pay are in cut-throat competition in India so a verdict would be paranoid at this point of time.

amazon business strategy

There is one place where Google is ahead of Amazon i.e. Ad spend. Google being the most popular search engine wins this one but “the winner doesn’t take it all”. Amazon has already eaten up the tremendous Ad business of Google which is increasing drastically.

Facebook – New Shark

You must be thinking Amazon doesn’t have a Social Media Platform then how are these two in the direct competition? Let us help you with some interesting news:

Facebook invested around $25 million in an Indian Startup named Meesho and surprisingly Meesho is an e-commerce platform.

amazon business strategy

So that brings Amazon and Facebook in direct competition at least in India and there are many reports suggesting that Facebook is trying its hands in eCommerce to take down Amazon.

Time will tell who gets the bigger piece of cake.

Walmart – Retail Bloodshed

Walmart is the largest retailer in the world and is still afraid of being threatened. They have the cause of being afraid as Amazon is taking their retail business away with the tough competition in this arena.

Amazon Go, the cashless grocery store is threatening for every retailer as Amazon is offering next-gen technology with the brand identity which won’t be easy to match.

amazon business strategy

When Amazon launched its first physical bookstore in 2015, it was a hint towards something disruptive.

But when they acquired Whole Foods the worst dream of retailers came true as Amazon-owned around 500 stores in a single deal.

Now that Walmart is online and Amazon is offline the battle is getting intense. Grab your seats and don’t forget the popcorn as these two giants will fight mercilessly to take whatever they could.

Microsoft – Cloud and Gaming

We all are aware of what Microsoft brings on the table(not that buggy windows)we are talking about our beloved XBOX.

All thanks to cloud gaming that Microsoft is feeling nauseous, AWS is in its prime and flourishing like anything. This gives Amazon the upper hand for the games stored at data centres. There is no point denying that cloud gaming is here to stay and will make physical storage obsolete forever.

amazon business strategy

Not only that, but Amazon also purchased Twitch, the Online Game Streaming Service for $1 Billion.

Amazon directly looked in the eyes of Nintendo, Sony, and obviously Xbox with these developments.

Amazon Games also came out with popular games like Crucible, League of Legends, Overwatch and abundance of others to take down the competition.

Obviously, it’s a long road for Amazon to beat Microsoft but they have all the required artillery to knock out the competition.

Netflix – A Winner but not for Long

This must be the most obvious one but it doesn’t mean we will let it go without some thought-provoking information.

Amazon Prime Video is a Video on Demand service which is in direct competition with Netflix.

amazon business strategy

Amazon took lead in terms of original Indian content, bundled services that come along with a prime subscription like Prime Music and faster Amazon delivery. Most importantly Prime is far cheaper than any of the Netflix subscriptions.

It would be naive to say that Amazon Prime is better than Netflix but there is no point denying that Prime is catching up and posing the biggest threat to Netflix.

Also see: Amazon Prime Vs Netflix Vs Hotstar in India: The best Video streaming service

It would be best to say that Amazon is everywhere.

A Little Roundabout 

Now that you know, Amazon is going places, let’s point out some industries where Amazon is aiming to disrupt in the coming years.

  • Supply chain and logistics
  • Pharmacy
  • Data-driven small financing
  • Mortgages
  • Insurance

Whenever you hear of Amazon Business Strategy, think of it as the capturing of every territory.