Is Amazon Fear The Fittest

766 Words4 Pages
Surviving as the fittest

Amazon, a tech giant and the biggest web shop in the world, is feared widely by retail companies. The company started out as an online bookstore and quickly expanded their product range with music, clothes, and numerous retail products and is becoming an “Everything Store”. Apart from their retail products, Amazon is known for their technological products. Amazon is a tech giant which exploits internet as their central business, which is contrary to their retail industry competitors. Amazon does not own physical stores but sells their products on their online store and delivers them at home. One of the reasons why retail companies fear the “Everything Store” is because Amazon disrupts retail industries through their
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Products are offered for low prices because of the price wars. While Amazon attracts more customers, they generate more cash for new services and more client data. Amazon knows what their customers buy, which music they listen to, which videos they watch and how they react to price changes. The more data Amazon obtains, the better they can improve their services such as recommendations, advertisements, new services, products and more. Because of these developments, Amazon creates a competitive advantage. In the end, both customers and Amazon benefit because of Amazon’s strategy creating “survival of the fittest” price wars in retail…show more content…
The stock value effects will be elaborated on the basis of a couple examples. The first example concerns the clothing industry. When Amazon announced they are going to sell Nike shoes, stock value of competitor Foot Locker decreased heavily. The stock value of Nike on the other hand got a positive boost (Soper, 2017). The second example concerns the food delivery industry. Amazon recently registered a new slogan; “We do the prep. You be the chef.”, which indicates they are going to be active in the food industry. They also filed a patent for a product, which is comparable to competitor Blue Apron. These developments led to a 10% decrease in stock value of Blue Apron (Kaplan & Boyle, 2017). The third and best example of Amazon’s power in retail industries, concerns the supermarket industry. Very recently, Amazon acquired Whole Foods for $13.7 billion (Kaplan & Boyle, 2017). The previous mentioned deal announced that the e-commerce giant entered the brick-and-mortar world, because Whole Foods sells their products in physical stores. When the deal was announced by Amazon, the supermarket industry value decreased. One of Amazon’s competitors, Ahold Delhaize’s, value decreased 9,5% which is equivalent to $2 billion. These examples clearly show the power of
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