Amazon’s Acquisition Strategy

• Amazon: Traditionally a conservative buyer

• Started acquiring companies only after
2008
• Amazon has been pursuing buyouts in
diverse areas.
• Whole Foods, a grocery chain, for $13.7
billion in 2017—the company’s biggest
acquisition to date and points to expanding
ambition in the grocery and brick & mortar
space
• Zappos, a shoe retailer, for $1.2 billion in
2009
• Twitch, an e-sports streaming site, for $970
million in 2014
• Ring, a smart home system, for $1.8 billion
• Amazon (AMZN) had roughly $31 billion in
cash, cash equivalents, and marketable
securities on March 31,218
• Amazon’s ample cash reserves indicate that
its acquisition spree is likely to continue
Amazon’s Flywheel Strategy
• Concept: Low prices would enable a better customer experience.
This would drive more traffic which in turn would result in lower
costs. And this would allow for even lower prices, and on and on
and on in a virtuous cycle

• Affecting any of these factors further accelerates the flywheel

• Implemented by Amazon in every product, service or capability

they add to their portfolio.

• Amazon continues to get bigger, stronger, faster, and continues to

create highly differentiated value.

• All of this makes it ever more difficult to compete in the same space
against Amazon
Amazon’s Blue Ocean Strategy
• Red Ocean V/s Blue Ocean: Fundamental premise of the Blue Ocean
strategy is that as opposed to continuing to compete in the red ocean,
you should try to find new space in which to sell your goods and
services.

• Amazon’s Mantra: Achieving success through innovation & making

competition irrelevant

• Blue Ocean strategy must result in unique products or assortment

which a customer can not get anywhere else.  And Blue Ocean strategy
must provide unique services and capabilities.

• Amazon continually looks to create and implement Blue Ocean

Strategies

• Kindle E-Reading solution, Drone Delivery, Cloud Based Computing,

Amazon Prime, or One Hour Delivery are all examples of Amazon
creating uncontested space (ie. Blue Oceans) in which to compete far
away from anything their competitors can do