amazon website case study

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August 2015 (Revised June 2021)
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Amazon.com, 2021

Format: Print
| Language: English
| Pages: 48

Related Work

November 2017
Faculty Research

Amazon.com, 2016

Amazon.com, 2016 By: John R. Wells and Gabriel Ellsworth
Amazon.com, 2021 By: John R. Wells, Benjamin Weinstock, Gabriel Ellsworth and Galen Danskin

Amazon’s User Experience: A Case Study

Most generations rank Amazon’s user experience as the most appealing. Here’s why.

Everyone appreciates an accessible and functional website. A recent survey found that most generations rank Amazon’s user experience (UX) as the most appealing . Of those surveyed, Amazon’s UX ranks highest among baby boomers (29%) and Generation X (21%).

Graph of top website user experiences (UX)

Designing user experience for multiple generations is a challenge. Many older users are only recently familiar with e-commerce and can get flustered by more complicated websites. Meanwhile, younger users tend to favor website UX that is visual and intuitive in nature, which would repel less tech-savvy users.

Amazon succeeds by offering a minimal, search-oriented user interface (UI) that accommodates both digital natives and internet newcomers.

This case study will discuss how Amazon’s UX makes it appealing for disparate generations:

Amazon’s UX is search-driven

How has Amazon’s UX changed?

Amazon’s product pages reassure buyers

Amazon’s UX is Search-Driven

Amazon’s UX is designed to increase the likelihood of visitors making a purchase. To this end, the search bar is prominent on every page. The search bar makes it easy to find products – but also to filter, refine, and view search results in an open and readable fashion.

Amazon’s search function is “state-of-the-art ," according to a recent study by the research group Baymard Institute. The search autocomplete, filtering, and guidance functionality excels at finding what visitors want.

The algorithm also personalizes the homepage content to the user’s search interactions in order to better enable future purchases. As seen below, various visual homepage elements are influenced by the search function, including:

Personalized recommendations

Recent browsing history

New products

Shopping cart

This array of relevant products both greets the user and highlights a likely path to purchase. Personalization at every turn ensures that visitors find more of what they want, and enhances the site experience to drive customer loyalty.

Ultimately, Amazon’s UX succeeds because every generation knows how to perform a text search. According to the B2B publication Business Inder, a whopping 94% of people surveyed have purchased from Amazon in the last year .

Whether or not visitors arrive with a product in mind, the usability of the search function caters to all. The usability is elevated for older users who are unaccustomed to following visual cues on websites and have yet to realize that an image represents a live link.

To this point, the calls to action in the homepage product boxes appear as both blue hyperlink text and as a product image. Offering both text and image-based cues allow the retailer to accommodate and convert all users.

Amazon’s linear and text-oriented approach to UX runs on personalization and usability.

How Has Amazon’s UX Changed?

Since its inception in 1994, Amazon’s UX has changed little. According to a former employee , the company’s approach to UX is: ‘if it ain’t broke, don't fix it’.

Even in the early days of the internet, Amazon’s open and highly navigable UI could be accessed by anyone with a hint of web experience.

Overhauling the site experience could have crippled the business model of enabling repeat purchases and increasing customer lifetime value. It would also have alienated a fledgling customer base that only became profitable after six long years .

In fact, Amazon’s consistency still contributes to its appeal with early adopters, Gen Xers and baby boomers, who rank Amazon’s UX highest of all. Recent research also found that older generations are more averse to website changes than younger generations. Even today, altering an effective UX is a lose-lose for both existing and incoming users of older generations.

While the UX remained constant, the navigation menu has been modified to provide the most linear shopping experience, as seen below.

Despite the outmoded graphics, color changes, and reorganized tabs – the basic structure remains intact. Amazon’s current navigational menu is more streamlined, as we saw in the previous example.

Most notably, the search bar was expanded to give it more prevalence on the page. The clunky product category buttons were assimilated into the header menu, which simplifies the navigation area and improves its readability.

The navigation tabs themselves have also been replaced. Formerly for “books” or “electronics,” the tabs now point to the user’s browsing history and personalized recommendations.

In an age when Amazon is known to carry all types of products, this optimization increases the chance of visitors finding, remembering, and buying what they like. Similarly, the “Accounts” area at right uses a bold font to call attention to wishlist items and ongoing orders to increase sales.

Constantly tweaking the site to align with buyer motivations helped Amazon to grow and retain a loyal customer base.

Amazon’s Product Page Reassures Buyers

Amazon’s product pages are constantly split-tested to drive optimal conversions.

Page elements are adjusted to best emphasize convenience, value, and trustworthiness. By reducing the friction around buying, Amazon increases sales.

Seen below, the product page for Braun electric toothbrush heads gives the visitor a clean and clear path to purchase.

Plenty of white space emphasizes both the product and its key selling points. The product rating sits below the product name to guaranteed its visibility and to highlight the social proof which validates the purchase quality. At left, the benefits are stated while the product image reaffirms the value by announcing “Extra” on the packaging.

On the order detail side, the eyes are most drawn to the bold black text that mentions “Free Shipping,” “Free Delivery,” and “Get it.” Amazon knows its customers want their products both cheaper and faster. These power phrases prompt action while reaffirming the savings and speed available with every order.

And if an item is too pricey, signing up for Amazon’s Reward Visa can affords the shopper a $50 discount and the satisfaction of purchase. Every element on the page exists to increase positive sentiment around a purchase.

Amazon uses the product page to spotlight key benefits, reassure shoppers, and thereby optimize conversion rates.

Learn 5 best practices for website UX .

Studying Amazon’s UX

Amazon is a name synonymous with e-commerce. The company’s search technology and user experience have afforded online shoppers of all ages a reliable and rewarding experience for 25 years. This accessibility and usability will attract and retain users for the foreseeable future.

Writer, Clutch

Ian Heinig is a copywriter who loves big ideas, brand strategy, and psychology. Most days he's drafting new ways to share value, but he's also an illustrator, yogi, and freelance burrito analyst. Find him at radicalartsdepartment.com.

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Lessons from Amazon’s Early Growth Strategy

If you’re interested in strategies for scaling start-ups, this episode is for you.

Apple Podcasts

So much has been written about Amazon’s outsized growth. But Harvard Business School professor Sunil Gupta says it’s the company’s unusual approach to strategy that has captured his scholarly attention. Gupta has spent years studying Amazon’s strategy and its founder and former CEO Jeff Bezos.

In this episode, Gupta shares how Amazon upended traditional corporate strategy by diversifying into multiple products serving many end users, instead of having a narrow focus.

He argues that some of Amazon’s simplest business strategies — like their obsession with customers and insistence on long-term thinking — are approaches that companies, big and small, can emulate.

Key episode topics include: strategy, innovation, leadership, scaling, Jeff Bezos, long-term thinking, customer focus.

HBR On Strategy curates the best case studies and conversations with the world’s top business and management experts, to help you unlock new ways of doing business. New episodes every week.

Listen to the full HBR IdeaCast episode: How Jeff Bezos Built One of the World’s Most Valuable Companies (2020)
Find more episodes of HBR IdeaCast
Discover 100 years of Harvard Business Review articles, case studies, podcasts, and more at HBR.org .

HANNAH BATES: Welcome to HBR On Strategy , case studies and conversations with the world’s top business and management experts, hand-selected to help you unlock new ways of doing business.

Gupta has spent years studying Amazon’s strategy and its founder and former CEO, Jeff Bezos.

In this episode, Gupta shares how Amazon upended traditional corporate strategy by diversifying into multiple products serving many end users instead of focusing more narrowly.

And he argues that some of their simplest business strategies – like their obsession with the customer and insistence on long-term thinking – are approaches that companies, big and small, should emulate.

If you’re interested in innovation strategy, this episode is for you. It originally aired on HBR IdeaCast in November 2020. Here it is.

ALISON BEARD: Welcome to the HBR IdeaCast from Harvard Business Review. I’m Alison Beard.

If you had to name the most successful business leader alive today, who would you say? I can’t hear you from my basement podcasting room, but I would bet that for many of you, the answer is Jeff Bezos, CEO of Amazon. This is a man who over the past 25 years turned his online bookstore startup into a diversified company currently valued at $1.6 trillion.

Amazon is a digital retailing juggernaut, it’s also a web services provider, media producer, and manufacturer of personal technology devices like Kindle and Echo. Oh, and Bezos also owns the Washington Post and Blue Origin, a space exploration company. Forbes tells us he is the richest person in the world.

How did he accomplish so much? How did he change the business landscape? What mistakes has he made along the way? A new collection of Bezos’s own writing, which full disclosure, my colleagues at Harvard Business Review Press have published, offer some insights. Here’s a clip from one speech that’s included. The book is called Invent and Wander.

And our guest today, who has spent years studying both Amazon and Bezos, is here to talk with me about some of the key themes in it, including the broad drivers of both the company and the CEO’s success. Sunil Gupta is a professor of business administration at Harvard Business School and cochair of its executive program, and cochair of its executive program on driving digital strategy, which is also the title of his book. Sunil, thanks so much for being on the show.

SUNIL GUPTA: Thank you for having me, Alison.

ALISON BEARD: So Invent and Wander. I get that Bezos is inventive. You know, he created a new way for us to buy things – everything. How is he also a wonderer?

SUNIL GUPTA: So he’s full of experiments. His company and his whole style is known for experimentation, and he says that in so many words that if you want big winners, then you have to be willing to have many failures. And the argument is, one big winner will take care of a thousand failed experiments. So I think that’s the wandering part. But also his experiments are not aimless. There is a certain thought and process behind what experiments to do and why they will connect to the old, old picture of what Amazon is today.

ALISON BEARD: And your expertise is in digital strategy. How does he break the traditional rules of strategy?

SUNIL GUPTA: So for the longest time the way, at least I was taught in my MBA program and the way we teach to our MBA students and executives, is strategy is about focus. But if you look at Amazon, Amazon certainly doesn’t look like it’s focusing on anything, so obviously Jeff Bezos missed that class, otherwise it’s a very, very different thing.

And then you’d say, why is it that so called lack of focus strategy seems to be working for Amazon? And I think the fundamental underlying principle that he’s guiding his whole discussion of strategy is, he’s changed the rules of strategy. So the old rules of strategy were, the way you gained competitive advantage is by being better or cheaper. So if I am selling you a car, my car is better of cheaper. But the inherent assumption in that strategy statement is, I’m selling one product to one customer. And what Amazon is basically arguing is, the digital economy is all about connection. We have got to connect products and connect customers. Let me explain why that is so powerful.

So connecting products, here the idea is, I can sell you, this is a classic razor and blade strategy. I can sell you a razor cheap in order to make money on the blade. So I can sell you Kindle cheap in order to make money on the ebooks. Now, at some level you might say, hey, razor and blade have been around forever. What’s so unique today? I think unique today is razor could be in one industry and blades could be in completely different industrys.

So for example, if you look at Amazon’s portfolio of businesses, you sort of say, not only Amazon is an e-commerce player, but also is making movies and TV shows, its own studio. Well, why does it make sense for an e-commerce player, an online retailer to compete with Hollywood. Well, Walmart doesn’t make movies. Macy’s doesn’t make movies? So why does it make sense for Amazon to make movies?

And I think once you dig into it, the answer becomes clear that the purpose of the movies is to keep and gain the Prime customers. Two day free shipping is fine, but if you ask me to pay $99 or $119 for two day free shipping, I might start doing the math in my head, and say, OK, how many packages do I expect to get next year? And is the Prime membership worth it or not?

But once you throw in, in addition to the two-day free shipping, you throw in some TV shows and movies that are uniquely found only on Amazon, I can’t do this math. And why is Prime customers important to Amazon? Because Prime customers are more loyal. They buy three or four times more than the non-Prime customers, and they’re also less price sensitive.

And in fact, Jeff Bezos has said publicly that every time we win a Golden Globe Award for one of our shows, we sell more shoes. So this is, and he said it in your book, Invent and Wander, also, that we might be the only company in the world which has figured out how winning Golden Globe Awards can actually translate into selling more products on the online commerce.

So this is a great example of the razor being in a very different industry and blade being in another industry. Take another example. Amazon has a lending business where they give loans to small and medium enterprises. If Amazon decides to compete with banks tomorrow, Amazon can decide to offer loans to the small merchants at such a low price that banks would never be able to compete. And why would Amazon be able to do that? Because Amazon can say, hey, I’m not going to make money on loans, as much money on loans, but I’ll make more money when these businesses, small businesses grow and do more transactions on my marketplace platform. And I get more commissions. So again, loan can become my razor in order to help the merchants grow and make money on the transaction and the commission that I get from that. The moment I make somebody else’s, in this case the banks, core business my razor, they will make a very hard time competing. So I think that’s the key change, the fundamental rules of strategy and competition in that direction.

The second part of connection is connecting customers, and this is the classic network effect. So marketplace is a great example of network effects. The more buyers I have, the more sellers I have. The more sellers I have, the sellers I have, the more buyers I get, because the buyers can find all the items. And that becomes flywheel effect, and it becomes a situation where it’s very hard for a new player to complete with Amazon.

ALISON BEARD: In this diversification that Amazon has done, how have they managed to be good at all of those things? Because they’re not focused. You know, they’re not concentrated on an area of specific expertise. So how have they succeeded when other companies might have failed because they lacked that expertise, or they were spreading themselves too thin?

SUNIL GUPTA: So I think it depends on how you define focus. Most of us, when we define focus, we sort of define focus by traditional industry boundaries, that I’m an online retailer, therefore going into some other business is lack of focus. The way Amazon thinks about is focus on capabilities.

So if you look at it from that point of view, I would argue that Amazon had three fundamental core capabilities. Number one, it’s highly customer focused, not only in its culture, but also in its capability in terms of how it can actually handle data and leverage data to get customer insight. The second core capability of Amazon is logistics. So it’s now a world class logistics player. It uses really frontier technology, whether it’s key word, robotics, computer vision, in its warehouse to make it much more efficient.

And the third part of Amazon’s skill or the capability is its technology. And a good example of that is Amazon Web Services, or AWS. And I think if you look at these three core capabilities, customer focus and the data insight that it gets from that, the logistics capability, and the technology, everything that Amazon is doing is some way or the other connected to it. In that sense, Amazon, and there’s no lack of focus, in my judgment on Amazon.

Now, if he starts doing, starts making cream cheese tomorrow or starts making airplane engines, then I would say, yes, it’s got a lack of focus. But one of the other things that Jeff Bezos has said again and again is this notion of work backwards and scale forward. And what that means is, because you’re customer obsessed, you sort of find ways to satisfy customers, and if that means developing new skills that we don’t have because we are working backwards from what the customer needs are, then we’ll build those skills.

So a good example of that is, when Amazon started building Kindle, Amazon was never in the hardware business. It didn’t know how to build hardware. But Bezos realized that as the industry moved, people are beginning to read more and more online, rather, or at least on their devices, rather than the physical paper copy of a book. So as a result, he says, how do we make it easier for consumers to read it on an electronic version? And they’re spending three years learning about this capability of hardware manufacturing. And by the way, Kindle came out long before iPad came out. And of course, that capability now has helped them launch Echo and many other devices.

ALISON BEARD: Right. So it’s the focus on the customer, plus a willingness to go outside your comfort zone, the wander part.

SUNIL GUPTA: Exactly.

ALISON BEARD: Yeah. How would you describe Bezos’s leadership style?

SUNIL GUPTA: So I think there are at least three parts to it. One is, he said right from day one that he wants to be a long-term focus. The second thing is being customer obsessed. And many times he has said that he can imagine, in the meetings he wants people to imagine an empty chair. That is basically for the customer. And he says, we are not competitor focused. We are not product focused. We are not technology focused. We are customer focused. And the third is, willingness to experiment. And fail, and build that culture in the company that it’s OK to fail.

ALISON BEARD: What about personally, though? Is he a hard charger? Is he an active listener? What’s it like to be in a room with him?

SUNIL GUPTA: Oh, he’s certainly a hard charger. I mean, he’s also the kind of guy, when he hires people, he says, you can work long, hard, or smart. But at Amazon, you can choose two out of three. And I think this is similar to many other leaders. If you look at Steve Jobs, he was also a very hard charging guy. And I think some people find it exhilarating to work with these kind of leaders. Some find it very tough.

ALISON BEARD: Do you think that he communicates differently from other successful CEOs?

SUNIL GUPTA: So the communication style that he has built in the company is the very famous now, there’s no PowerPoints. So it’s a very thoughtful discussion. You write six-page memos, which everybody, when their meeting starts, everybody sits down and actually reads the memo.

In fact, this was a very interesting experience that I had. One of my students, who was in the executive program, works at Amazon in Germany. And he is, he was at that point in time thinking of moving to another company and becoming a CEO of that company. So he said, can I talk to you about this change of career path that I’m thinking about? I said, sure. So we set up a time, and five minutes before our call, he sends me an email with a six-page memo. And I said, well, shouldn’t he have sent this to me before, so I could at least look at it? He says, no, that’s the Amazon style. We’ll sit in silence and read it together. And so I read it together, because then you’re completely focused on it. And then we can have a conversation. But this discipline of writing a six-page memo, it’s a very, very unique experience, because you actually have to think through all your arguments.

ALISON BEARD: You also mentioned the long term focus, and that really stood out for me, too, this idea that he is not at all thinking of next year. He’s thinking five years out, and sometimes even further. But as a public company, how has Amazon been able to stick to that? And is it replicable at other companies?

SUNIL GUPTA: I think it is replicable. It requires conviction, and it requires a way to articulate the vision to Wall Street that they can rally behind. And it’s completely replicable. There are other examples of companies who have followed a similar strategy. I mean, Netflix is a good example. Netflix hadn’t made money for a long period of time. But they sold the vision of what the future will look like, and Wall Street bought that vision.

Mastercard is exactly the same thing. Ajay Banga is giving three year guidance to Wall Street saying, this is my three-year plan, because things can change quarter to quarter. I’m still responsible to tell you what we are doing this quarter, but my strategy will not be guided by what happens today. It will be guided by the three-year plan that we have.

ALISON BEARD: There are so many companies now that go public without turning any profit, whereas Amazon now is printing money, and thus able to reinvest and have this grand vision. So at what point was Bezos able to say, right, we’re going to do it my way?

SUNIL GUPTA: I think he said it right from day one, except that people probably didn’t believe it. And in fact, one of the great examples of that was, when he was convinced about AWS, the Amazon Web Services, that was back in the early 2000s, when a majority of the Wall Street was not sure what Jeff Bezos was trying to do, because they say, hey, you are an online retailer. You have no business being in web services. That’s the business of IBM. And that’s a B2B business. You’re in a B2C business. Why are you going in there?

And Bezos said, well, we have plenty of practice of being misunderstood. And we will continue with our passion and vision, because we see the path. And now he’s proven it again and again why his vision is correct, and I think that could give us more faith and conviction to the Wall Street investors.

SUNIL GUPTA: Oh, absolutely. And he’s one of the persons who has his opinion, and you always surround yourself with people better than you.

ALISON BEARD: How has he managed to attract that talent when it is so fiercely competitive between Google, Facebook, all of these U.S. technology leaders?

SUNIL GUPTA: So a couple of things I would say. First of all, it’s always good fun to join a winning team. And all of us want to join a winning team, so this certainly is on a trajectory which is phenomenal. It’s like a rocket ship that is taking off and has been taking off for the last 25 years. So I think that’s certainly attractive to many people, and certainly many hard charging people who want to be on a winning team.

And a second thing is, Amazon’s culture of experimentation and innovation. That is energizing to a lot of people. It’s not a bureaucracy where you get bogged down by the processes. So the two type of decisions that we talked about, he gives you enough leeway to try different things, and is willing to invest hundreds of millions of dollars into things that may or may not succeed in the future. And I think that’s very liberating to people who are willing to take on the ownership and build something.

ALISON BEARD: But don’t all of the tech companies offer that?

SUNIL GUPTA: They do, but if you think about many other tech companies, they’re much more narrow in focus. So Facebook is primarily in social media. Google is primarily in search advertising. Yes, you have GoogleX, but that’s still a small part of what Google does. Whereas if you ask yourself what business is Amazon in, there are much broader expansive areas that Amazon has gone into. So I think the limits, I mean, Amazon does not have that many limits or boundaries as compared to many other businesses in Silicon Valley.

ALISON BEARD: So let’s talk a little bit about Bezos’s acquisition strategy. I think the most prominent is probably Whole Foods, but there are many others. How does he think about the companies that he wants to bring in as opposed to grow organically?

SUNIL GUPTA: So some acquisitions are areas where he thinks that he can actually benefit and accelerate the vision that he already has. So for example, the acquisition of Kiva was to improve the efficiency and effectiveness of the systems that he already put in place in his warehouse. And logistics and warehouse is a key component or key part of Amazon’s business, and he saw that Kiva already was ahead of the curve in technology that he probably wanted to have that in his own company. So that was obvious acquisition, because that fits in the existing business.

Whole Foods is kind of a slightly different story, in my judgment, because I some ways, you can argue, why is Amazon, an online player, buying an offline retail store, Whole Foods? And in fact, they bought it at 27% premium. So that doesn’t make sense for an online retailer commerce to go to offline channels. And I think, in fact, part of the reason in my judgment is, it’s not just Whole Foods, but it’s about the food business, per se. And why is Amazon so interested in food? In fact, Amazon has been trying this food business, online food delivery for a long period of time without much success. And Whole Foods was one, another way to try and get access to that particular business. And why is that so important to Amazon, even though you could argue, food is a low margin business?

And I would say, part of the reason is, food is something, grocery is something that you buy every week, perhaps twice a week. And if I, as Amazon, can convince you to buy grocery online from Amazon, then I’m creating a habit for you to come onto Amazon every week, perhaps twice a week. And once you are on Amazon, you will end up buying other products on Amazon. Whereas if you are buying electronics, you may not come to Amazon every day.

So this is a habit creation activity, and again, it may not be a very high margin activity to sell you food. But I’ve created a habit, just like Prime. I’ve created a loyal customer where you think of nothing else but Amazon for your daily needs, and therefore you end up buying other things.

ALISON BEARD: And Amazon isn’t without controversy. You know, and we should talk about that, too. First, there are questions about its treatment of warehouse employees, particularly during COVID. And Bezos, as you said, has always been relentlessly focused on the customer. But is Amazon employee centric, too?

SUNIL GUPTA: So I think there is definitely some areas of concern, and you rightly said there is a significant concern about the, during the COVID, workers were complaining about safety, the right kind of equipment. But even before COVID, there were a lot of concerns about whether the workers are being pushed too hard. They barely have any breaks. And they’re constantly on the go, because speed and efficiency become that much more important to make sure customers always get what they are promised. And in fact, more than promised.

Clearly Amazon either hasn’t done a good job, or hasn’t at least done the public relations part of it that they have done a good job. Now, if you ask Jeff Bezos, he will claim that, no, actually, they have done things. For example, they offer something called carrier choice, where they give 95% tuition to the employees to learn new skills, whether they’re relevant to Amazon or not. Pretty much like what Starbucks does for its baristas, for college education and other things. But I think more than just giving money or tuition, it requires a bit of empathy and sense that you care for your employees, and perhaps that needs, that’s something that Amazon needs to work on.

ALISON BEARD: And another challenge is the criticism that it has decimated mom and pop shops. Even when someone sells through Amazon, the company will then see that it’s a popular category and create it itself and start selling it itself. There’s environmental concerns about the fact that packages are being driven from warehouses to front doors all over America. And boxes and packaging. So how has Bezos, how has the company dealt with all of that criticism?

SUNIL GUPTA: They haven’t. And I think those are absolutely valid concerns on both counts, that the small sellers who grow to become reasonably big are always under the radar, and there are certainly anecdotal evidence there, small sellers have complained that Amazon had decided to sell exactly the same item that they were so successful in selling, and becoming too big is actually not good on Amazon, because Amazon can get into your business and wipe you away. So that’s certainly a big concern, and I think that’s something that needs to be sorted out, and Amazon needs to clarify what its position on that area is, because it benefits from these small sellers on his platform.

And your second question about environmental issues is also absolutely on the money, because not only emission issues, but there’s so many boxes that pile in, certainly in my basement, from Amazon. You sort of say, and it’s actually ironical that Millennials who are in love with Amazon are extremely environmentally friendly. But at the same time, they would not hesitate to order something from Amazon and pile up all these boxes. So I think Amazon needs to figure out a way to think about both those issues.

ALISON BEARD: And at what point will it have to? I mean, it seems to be rolling happily along.

SUNIL GUPTA: Well, I think those issues are becoming bigger and bigger, and it’s certainly in the eye of the regulators, also, for some of these practices. And not only because it’s too big, and there might be monopoly concerns, but these issues will become larger, and any time you become a large company, you become the center of attraction for broader issues than just providing shareholder value.

ALISON BEARD: Yeah. So those are weaknesses possibly for the company. What are some of Bezos’s personal weaknesses that you’ve seen in studying him and the company?

SUNIL GUPTA: So I think one thing that stands out to me, and at least in the public forums, I have not seen any empathy. And it’s, I mean, we talk about that the leaders have, should have three qualities. They should be competent. They should have a good character. And they should have compassion. So he’s certainly very competent. I mean, he’s brilliant in many aspects, right, from the computer vision and AI and machine learning, to the nuances of data analytics, to the Hollywood production, etc. He also seems to have good character, at least I have not heard any personal scandals, apart from his other issues in his personal life, perhaps.

Those characteristics of competence and character make people respect you. What makes people love you is when you show compassion, and at least I haven’t seen compassion or empathy that comes out of him. I mean, he certainly comes across as a very hard charging, driven person, which probably is good for business. But the question of empathy is perhaps something lacking right now.

ALISON BEARD: Yeah. The other issue is his just enormous wealth. He did invent this colossally valuable company, but should anyone really be that rich?

SUNIL GUPTA: Well, I guess that’s, you can say that’s the good or the bad thing about capitalism. But I think, and again, my personal view is there’s nothing wrong in becoming rich, if you have been successful and done it with hard work and ingenuity. But how you use your wealth is something that perhaps will define Jeff Bezos going forward. I think Bill Gates is a great example how he actually has used his wealth and his influence and his expertise and his brilliance into some certain thing that actually is great for humanity.

Now, whether Jeff Bezos does that down the road, I don’t know, whether his space exploration provides that sort of outlet which is both his passion as well as good for humanity, I don’t know. But at some point in time, I think it’s the responsibility of these leaders to sort of say, my goal is not simply to make money and make my shareholders rich, but also help humanity and help society.

ALISON BEARD: If you’re talking to someone who’s running a startup, or even a manager of a team at a traditional company, what is the key lesson that you would say, this is what you can learn from Jeff Bezos? This is what you can put to work in your own profession?

SUNIL GUPTA: So I would say two things that at least I would take away if I were doing a startup. One is customer obsession. Now, every company says that, but honestly, not every company does it, because if you go to the management meetings, if you go to the quarterly meetings, you suddenly go focus on financials and competition and product. But there’s rarely any conversation on customers. And I think, as I mentioned earlier, that Jeff Bezos always tells his employee to think of the imaginary chair in which a customer is sitting, because that’s the person that we need to focus on. Howard Shultz does the same thing at Starbucks, and that’s why Starbucks is so customer focused.

So I think that’s the first part. And the argument that Bezos gives is, customers are never satisfied. And that pushes us to innovate and move forward, so we need to innovate even before the rest of the world even sees that, because customers are the first ones to see what is missing in the offering that you have.

And the second I would say that I would take away from Jeff Bezos is the conviction and passion with what you do. And many times that goes against the conventional wisdom. And the Amazon Web Services is a great example of that. The whole world, including the Wall Street Journal and the Wall Street analysts were saying, this is none of Amazon’s business to do web services. But he was convinced that this is the right thing to do, and he went and did that.

And part of that conviction may come from experiments. Part of that conviction comes from connecting the dots that he could see that many other people didn’t see. I mean, that’s why he went, left his job, and went to Seattle to do the online bookstore, because he could see the macro trends as to what the Internet is likely to do. So, I think that’s the vision that he had. And once you have the conviction, then you follow your passion.

ALISON BEARD: Sunil, thanks so much for coming on the show.

SUNIL GUPTA: Thank you for having me. Alison.

HANNAH BATES: That was Harvard Business School professor Sunil Gupta, in conversation with Alison Beard on the HBR IdeaCast .

We’ll be back next Wednesday with another hand-picked conversation about business strategy from Harvard Business Review. If you found this episode helpful, share it with your friends and colleagues, and follow our show on Apple Podcasts, Spotify, or wherever you get your podcasts. While you’re there, be sure to leave us a review.

And when you’re ready for more podcasts, articles, case studies, books, and videos with the world’s top business and management experts, find it all at HBR.org.

This episode was produced by Mary Dooe, Anne Saini, and me, Hannah Bates. Ian Fox is our editor. And special thanks to Maureen Hoch, Nicole Smith, Erica Truxler, Ramsey Khabbaz, Anne Bartholomew, and you – our listener. See you next week.

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This article is about strategy, partner center.

The 4ps of amazon's marketing strategy, amazon marketing channel types, amazon's digital marketing strategy, become a digital marketer in 2022, amazon marketing strategy 2024: a case study.

Amazon is the largest online store in the world based on sales and market value. This online business has changed how people all over the world do business. Jeff Bezos started the company in Washington, USA on July 05, 1994. He was the CEO of the company till July 2021. Andy Jassy took over as the President and CEO of Amazon on July 05 2021.

The first success for Amazon came along very quickly. It began as an online bookstore and kept adding to what it could do. In 1997, the company went public and is now on the NASDAQ in the US. Without help from the press, the company could sell books in 45 countries in less than two months. Amazon is now in more than 200 countries, and its website sells almost everything. Its subsidiaries include Audible, Twitch, IMDb, and Amazon Web Services.

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Amazon looks at the " marketing mix " of a company or brand, which comprises the 4Ps -

Here is a comprehensive explanation of each factor's function.

Amazon used only to sell books online, but now it sells millions of different products in many categories. Shoes, jewelry, clothes, toys, home and kitchen appliances, electronics, books, the great outdoors, sports, car accessories, and works of art are some of the most popular products. Amazon sells goods from small businesses and shops but promotes its brand , Amazon Basics.

A company can price its products in several different ways. Here are some to remember:

Cost-plus pricing
Value pricing
Competitor pricing
Price discrimination

Amazon often uses a pricing strategy called "competitive pricing," in which it looks at the prices of its competitors and bases its prices on those. It helps keep costs low and gives customers a lot of choices.

Amazon also uses the following methods to set prices:

Promotional pricing
Behavioral pricing

Amazon can change its products daily because of how it runs its business. This is its best feature, making it hard for other companies to compete with Amazon.

Amazon's online store has grown over the past few years in many parts of the world. Millions of products are now more accessible to customers worldwide to get. Even if you live in a remote part of the world, you can get packages quickly from Amazon. Part of the company's success comes from the fact that it ships fast and has fulfillment hubs.

4. Promotion

When it comes to marketing, Amazon knows how important communication is. It uses a lot of different kinds of advertising to reach people who might buy or use its products. Amazon has a lot of sales and discounts, which is a great way to build its brand. It has regular ads on websites, newspapers, TV, billboards, and social media , among other places. There are also affiliate sites that work with Amazon.

Also Read - What are the 7 Ps of Marketing? Read this article and find out!

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PPC advertising on Amazon can be put into three groups:

1. Headline Search Ads

If you want to get your brand out there, it's best to use headline search ads. Amazon now has two ways to promote brands, especially during the holiday season:

Headline Search Ads
Amazon Stores

Title and Amazon Stores Together, Search Ads can help people know more about your brand and the products you sell. It also builds trust with customers and makes sure that your products are shown in the right way.

By combining Headline Search Ads, Amazon Stores, and Sponsored Products into a single Pay-Per-Click (PPC) marketing campaign, you can easily reach many shoppers in less time.

2. Product Display Ads

Another type of effective PPC ad is a "Product Display Ad," which is placed next to the product or in the "similar items" section on the product page. This kind of ad is only meant to be self-service. It is linked to the ASINs of the products, which gives sellers many options for focusing on different types of customers based on how they act.

3. Sponsored Product Ads

One of the best ways to get more people to see and buy your product is to pay for an advertisement. Sponsored product ads appear on the top when you search for something on Amazon.

Amazon's digital marketing strategy is comprehensive, and they reach the customers through digital marketing. Today, everyone uses social media. Amazon advertises its products on social media, taking advantage of those who use those sites and sending them to their product pages to help them sell more. It has teamed up with several big and small influencers in the country to reach its audience more effectively. It uses Twitter, Instagram, YouTube, Pinterest, and Facebook.

Amazon on Facebook

There are 10 million people who follow Amazon India on Facebook . It primarily uses Facebook to share company news and advertising. It uses strong advertising to get the word out about its Sale Days. It also stays up-to-date by publishing posts on different topics.

Amazon on Instagram

Interviews with artists from different backgrounds and key advertising are the main parts of Amazon's Instagram marketing plan. It has more than 2.8 million Instagram followers. The company's strategies for Instagram and Facebook are very similar, except that it doesn't post updates about company news on either platform. Both platforms have posts from the company that are very similar.

Amazon on Twitter

Amazon India has a different plan for getting new customers through Twitter. It stays in touch with its followers, using a wide range of content, holding contests to get new customers, and following and creating trends. It is one of the biggest in its field, with two million Twitter followers. Twitter content makes it sound less like advertising and more like personal recommendations.

Amazon on YouTube

The best thing about Amazon's YouTube ads is that they immediately grab people's attention. Amazon makes sure that its ads are always interesting and valuable. Most of the time, it does this by trying to make the customer feel special.

Amazon on Pinterest

More than a million people follow Amazon on Pinterest. They use Pinterest to promote their products based on a wide range of themes to grab people's attention.

The way Amazon uses digital marketing is unparalleled. To stay competitive, they should keep making more exciting content and putting it out in the best way possible. Amazon Marketing Strategy gets updated periodically to stay ahead of the curve. Competing in the retail industry is complex, and Amazon's marketing strategy has helped the company stay ahead of the competition.

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Amazon Business Case Study [2024]: In-depth Analysis

How does an online book retailer become a behemoth dominating the global e-commerce industry? The 28-year-old history of Amazon’s growth is a masterclass in building a successful business strategy that has revolutionised the retail experience forever! The company has achieved eponymous status with a global presence and diversified business. No wonder its sales are expected to reach an astounding USD 746.22 billion with a valuation of USD 2 trillion in 2024! From being an online bookseller headquartered in a garage to becoming the second most valuable brand in the world , the saga of this global brand is a case study in all the leading business schools.

So what is the secret behind the explosive success of Amazon? This article provides a comprehensive case study of Amazon and its winning business strategy.

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Glimpsing Back: A Brief History of Amazon

With a small team, the budding company made headway in the book-selling market by offering a wide virtual selection of books compared to brick-and-mortar stores with doorstep delivery. With a user-friendly interface, easy-to-search engine, and focus on creating a ‘virtual community,’ the business grew by leaps and bounds. The emphasis on customer choice, experience, and convenience serves the company well even today.

The name was aspirational with a nod to the largest river in the world- Bezos’ Amazon sought to be the largest e-commerce bookseller in the world. By July 1995, Amazon was marketing itself as the “Earth’s Biggest Bookstore,” selling over one million titles to all 50 states in the US and across 45 countries . It provided stiff competition to brick-and-mortar giants like Barnes and Noble and Borders.

The company went public with its IPO in 1997 ; since then, there has been no looking back. Since its listing, the company has significantly diversified its offering by including music, electronics, toys, kitchen utensils, clothes, and more on its e-commerce site. From the Earth’s Biggest Bookstore, Amazon shifted its tagline to “Books, Music and More.” The company expanded to Germany and the United Kingdom by purchasing online bookstores, thus increasing its revenue. At its core, the company established a dynamic, efficient, and successful distribution and logistical model that helped capture a global market.

The year 1999 marked two critical moments for Amazon. First, the company patents the “1-Click” technology allowing users to purchase a product with one click. Second, it launches the 3rd party seller marketplace to allow third-party sellers to sell their produce through Amazon. These measures exponentially increased the sales on the platform. The company’s success put Bezos on the map as he received the prestigious accolade of the “Time’s Person of the Year” in 1999 at 35 years of age.

The company survived the dot-com bubble burst and got only stronger. In 2003, the company took a momentous step by launching Amazon Web Services , a web-hosting business, that marked its arrival into the tech business. It provides cloud computing services to individual developers, companies, and governments through the platform’s IT infrastructure. The strategic shift from an e-commerce platform to a tech company was instrumental in Amazon’s diversification strategy and revenue generation.

The company took further measures to develop brand loyalty through its Amazon Prime program in 2005. Prime membership has since expanded its services significantly and is one of the most valuable assets for the company today. It reshaped consumer expectations and experiences of shopping across the world.

Amazon has been on a path of extensive acquisition and alliance . From the online shoe retailer Zappos to the robotics company Kiva Systems and the grocery delivery service Whole Foods- each acquisition captured pre-existing markets and distribution networks of the acquired assets. With every move, the company strategically entered new markets, removed competitive businesses by acquiring them, made distribution and logistics more efficient, and improved consumer experience. These moves catapulted the company to a 1 trillion dollar valuation in 2018. The company’s profits surged during the pandemic as Bezos’ hourly wealth increased by USD 11.7 million . The following year, Bezos stepped down as the CEO and found his replacement in Andy Jassy, the CEO of Amazon Web Services.

Now that we know the history of Amazon, its business strategy becomes easier to decipher. Before we unravel its key business strategies, let’s look at its many businesses.

Amazon and its Diversified Business Model

A case study of Amazon is incomplete without an understanding of the many businesses that it has a foot in. Here are the diverse businesses that help Amazon generate revenues from multiple streams and have made it a leader in the global market.

Online retail store

Amazon began as an online seller of books, and it continues its operations as an e-commerce site. Today the site offers a variety of products for the best prices to the consumer’s doorsteps. With an easy-to-use interface, easy return policy, “1-Click” buying, customer reviews, and suggestions, the e-commerce site knits an unrivalled retail experience.

Amazon Marketplace

Amazon opened its platform to third-party sellers who could leverage its large customer base to sell products. It brings a diversity of products to the retailer without holding inventory. Amazon would, in turn, charge the sellers a percentage of their revenue as a commission fee. It is estimated that third-party sellers generate a gross merchandise value (GMV) of USD 300 billion for the platform.

Amazon Web Services (AWS)

Amazon’s cloud platform offers individual developers, start-ups, established businesses, and governments a range of cloud computing services through its IT infrastructure. It is the fastest-growing business segment for the brand clocking a global net revenue of USD 80.1 billion in 2022.

Amazon Prime

Amazon’s member subscription service offers numerous membership benefits ranging from access to digital video and music streaming, audiobook and ebook platforms, free delivery, exclusive deals, Prime Day access, and much more. The company’s global net revenue from its subscription services stood at USD 35.22 billion in 2022.

Amazon revealed in 2022 that the advertising wing of the company had generated a revenue of USD 31.2 billion the preceding year. The company offers custom advertising solutions to customers and campaign placements across multiple channels like Fire TV placements, Amazon physical stores, the brand’s homepage, and customised destination pages.

Physical stores

Amazon made an entry into the brick-and-mortar business with the establishment of a physical bookstore in Seattle in 2015. The company has since expanded its physical presence with Amazon Go, Amazon Fresh, Amazon Go Grocery, Whole Foods Market, and Amazon Style. It has sought to transform the real-world shopping experience with its “Just Walk Out Shopping’ experience.

Breaking Down Amazon’s Business Strategy

Amazon’s business strategy has been innovative and forward-thinking from the get-go. Its path-breaking business model has inspired many but retains its uniqueness in execution. At its core, the company has maintained its customer-centric ethos, where its customers comprise three sets: retail customers, seller customers, and developer customers.

For a comprehensive case study of Amazon , let’s take a closer look at the secret recipe behind its success.

Customer Obsession

The company proudly proclaims that it aims to be the “Earth’s most customer-centric company.” Since its inception, Amazon has won over the trust and loyalty of its customers by perfecting its marketing mix by offering “a comprehensive selection of products, low prices, fast and free delivery, easy-to-use functionality, and timely customer service.” As Amazon’s customer base and usage expands exponentially, the company has worked towards optimising user experience through continuous assessment and feedback mechanisms.

Diversification

Amazon has kept up with the emerging demands of the market with growth potential in the long term. Its future-oriented vision has helped the company grow by leaps and bounds by venturing into new businesses that have added to its revenue streams. From cloud computing services to OTT services and subscription-based benefits, Amazon has reinvented what a diversified business looks like.

Expansion through partnerships and acquisitions

Amazon has continually acquired and partnered with businesses to expand its customer base, enter new markets, diversify its product offerings, eliminate competition, and gain distribution and logistical networks. From IMDB and The Washington Post to Twitch and Pillpack, Amazon has bought companies across multiple categories to gain a foothold in their markets and operations. It has helped the company scale up its functions rapidly across the globe.

Technologically-driven innovations

Initially, Amazon was written off as it was started by “computer guys” who knew nothing about selling books. However, it was a focus on innovative technology that the company grew into a tech giant dominating the e-commerce space. Whether it is the 1-Click technology, SEO, user interface, cloud computing services, Just Walk Out technology, or its e-devices, the company has optimised customer experience by leveraging technology.

Data-based metrics

Amazon has consistently relied on metrics to assess, strategise, and grow its business. Data is an invaluable currency left behind with every click by the customer. The company has effectively and efficiently amassed these data into actionable insights to improve user experience, build and improve products and services, and develop successful marketing strategies.

Marketing strategy

A comprehensive marketing strategy has been central to Amazon’s brand-building exercise. With the right marketing mix, the brand has become a household name. Its name and logo are recognisable anywhere in the world. A continual push to diversify its portfolio, competitive pricing policy, expanding its operations, and consistent promotions through multiple channels have been integral to achieving this global status.

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Amazon, the second-most valuable company in the world, has been almost three decades in the making. Every step and misstep has been strategic and guided by the principles of: “customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking.” This case study of Amazon has sought to highlight its history, business model, and business strategies that have gone into the making of the behemoth. Ultimately, the company is a product of the management of Jeff Bezos and Amazon’s leadership.

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Frequently Asked Questions (FAQs)

Jeff Bezos has held the position of Founder and CEO of the company. However, he inherited the position of the Executive Chairman of Amazon after resigning as the CEO of the company in 2021.

Amazon launched in India in June 2013. Initially starting its operations to serve Indians with books, films, TV shows and subscription-based services, the company further expanded its wings to become one of the leading shopping destinations for Indians.

The most important focal point of Amazon’s business strategy is its customers (retail customers, sellers, and developers) and building a customer-centric company.

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A Comprehensive Case Study on Amazon's Marketing Strategy

In today's digital age, Amazon has emerged as the market leader in e-commerce. Its success can largely be attributed to its innovative and effective marketing strategies . This comprehensive case study delves into the various aspects of Amazon's marketing strategy and explores the key factors that have contributed to its unparalleled growth and success.

Understanding Amazon's Marketing Strategy

The core principles of amazon's marketing.

At the heart of Amazon's marketing strategy lies a strong focus on customer satisfaction . The company's relentless pursuit of customer centricity has played a crucial role in its success. By consistently prioritizing the needs and preferences of its customers, Amazon has created a loyal customer base that keeps coming back for more.

Amazon's commitment to customer satisfaction goes beyond just providing quality products. The company understands that a positive customer experience begins with a user-friendly website interface . With a clean and intuitive design, Amazon ensures that customers can easily navigate through the vast selection of products and find exactly what they are looking for.

Furthermore, Amazon employs a data-driven approach to marketing . The company leverages advanced analytics and algorithms to understand customer behavior, identify trends, and personalize the buyer experience. This allows Amazon to target its marketing efforts with precision, ensuring maximum return on investment.

Through its data-driven approach, Amazon is able to gain valuable insights into customer preferences and shopping habits. By analyzing vast amounts of data, Amazon can identify patterns and trends, enabling the company to make informed decisions about product offerings and marketing strategies .

Related: Unveiling Home Depot's Winning Marketing Strategy

The Role of Customer Centricity in Amazon's Strategy

Amazon's customer-centric approach is evident in every aspect of its marketing strategy . From its user-friendly website interface to its hassle-free return policy, the company constantly strives to deliver exceptional customer experiences. By continuously adapting and improving its services based on customer feedback, Amazon has built a reputation for reliability and trustworthiness.

One of the ways Amazon demonstrates its commitment to customer centricity is through its hassle-free return policy. The company understands that customers may occasionally need to return or exchange a product, and Amazon makes the process as seamless as possible. This not only enhances the overall customer experience but also instills confidence in customers, knowing that their satisfaction is a top priority.

Additionally, Amazon utilizes customer data to create personalized product recommendations and targeted marketing campaigns. By understanding individual customer preferences and purchase history, Amazon can effectively cross-sell and upsell products, increasing customer satisfaction and revenue. This marketing strategy creates repeat customers and expand's the brand's reach for its own products and its sellers.

Amazon's personalized product recommendations are powered by sophisticated algorithms that analyze a customer's browsing and purchase history. By leveraging this data, Amazon is able to suggest products that are highly relevant to each customer's unique interests and preferences. This not only enhances the shopping experience, but also increases the likelihood of customers discovering new products they may not have otherwise considered.

Amazon also makes personalized marketing available to sellers through its advertising platform. Amazon sellers can create ads for their products that will be shown to people who search for products in the same category, or who buy similar products.

Amazon's marketing strategy revolves around customer satisfaction and data-driven decision making. By prioritizing the needs and preferences of its customers, and leveraging advanced analytics, Amazon has been able to build a loyal customer base and deliver exceptional shopping experiences. Through its customer-centric approach, Amazon continues to innovate and adapt, ensuring that it remains a leader in the e-commerce industry.

Related: Liquid Death Marketing Strategy Case Study: Slaying the Beverage Industry with Killer Branding and Marketing

Dissecting Amazon's SEO Strategy

When it comes to search engine optimization (SEO), Amazon is a master of the game. The company understands the importance of optimizing product listings with relevant keywords to ensure maximum visibility and sales. Its massive infrastructure of product landing pages, product categories, and interlinking between pages make for the perfect SEO play. But what exactly does Amazon do to achieve this?

Importance of Keywords in Amazon's SEO

Amazon's SEO strategy revolves around thorough keyword research . The company invests significant time and resources into identifying the most popular search terms used by customers. By incorporating these keywords strategically within product titles, descriptions, and backend fields, Amazon ensures that its products appear higher in search results. It also encourages sellers to leverage keyword strategies in their own product listings and advertising campaigns on the platform.

However, keyword optimization is just the tip of the iceberg. Amazon recognizes that positive reviews and ratings are equally important in boosting a product's search ranking and instilling trust in potential buyers. To encourage customer feedback, Amazon actively solicits reviews and provides a platform for customers to share their opinions.

By combining keyword optimization with a strong focus on customer reviews, Amazon creates a powerful SEO strategy that maximizes product visibility and drives sales.

Related: Exploring Five Guys' Marketing Strategy

How Amazon Optimizes Product Listings

Amazon goes above and beyond to optimize product listings and enhance their visibility. One of the key elements is the inclusion of high-quality product images. These images capture customer interest and provide a visual representation of the product. Additionally, informative descriptions play a crucial role in educating customers about the product's features and benefits.

But Amazon doesn't stop there. The company offers product videos and enhanced content features to provide customers with a comprehensive understanding of the product. These additional resources allow customers to make informed purchasing decisions and further increase the chances of a sale.

Moreover, Amazon leverages its vast customer review data to enrich product listings. By identifying and displaying relevant product information, such as frequently asked questions, customer-generated images, and comparisons with similar products, Amazon creates a dynamic and engaging shopping experience. This user-generated content aids in customer decision-making and adds a layer of authenticity to the product listings.

By combining keyword optimization, high-quality visuals, informative descriptions, and user-generated content, Amazon creates a compelling SEO strategy that not only boosts visibility but also enhances the overall shopping experience for customers.

Related: Dyson Marketing Strategy: A Look at Home Appliance Go-to-Market Strategy and Branding

Amazon's Advertising Tactics

Amazon, the e-commerce giant, employs various advertising strategies to help sellers promote their products and increase their visibility within the marketplace. One of the key tactics utilized by Amazon is its pay-per-click (PPC) advertising model.

Amazon's Pay-Per-Click Advertising

Through its advertising platform, Amazon offers sellers the opportunity to bid on relevant keywords, ensuring that their products appear prominently in search results and sponsored product listings. This targeted approach allows sellers to reach potential customers precisely when they are actively searching for similar products.

What sets Amazon's PPC advertising apart is its real-time performance tracking. Sellers can monitor the effectiveness of their campaigns and make data-driven decisions to optimize their advertising spend and adjust bidding strategies accordingly. This level of control ensures that sellers maximize their return on investment and achieve their desired outcomes.

Furthermore, Amazon provides sellers with valuable insights and analytics, allowing them to understand customer behavior, preferences, and trends. Armed with this information, sellers can refine their advertising strategies and tailor their offerings to meet the needs and expectations of their target audience.

Related: The Effective Lego Marketing Strategy: Building Success Brick by Brick

Amazon's Social Media Presence

The impact of social media on amazon's growth.

While Amazon's success primarily stems from its e-commerce platform, its social media presence has also played a significant role in its growth. Through various social media channels, Amazon engages with its customers and fosters a community of brand advocates. This direct and interactive approach strengthens customer relationships and builds brand loyalty.

One way Amazon utilizes social media to connect with its customers is by actively responding to their comments and inquiries. Whether it's addressing a customer concern or simply thanking them for their support, Amazon's social media team ensures that every interaction is meaningful and personalized. This level of engagement not only makes customers feel valued but also creates a sense of trust and reliability.

Moreover, social media provides Amazon with a platform to promote its products, offer exclusive deals, and share informative content. By leveraging the power of social media influencers and user-generated content, Amazon expands its reach and generates buzz around its offerings.

For instance, Amazon collaborates with popular influencers in various niches to showcase their products and services. These influencers, who have a large and dedicated following, help create brand awareness and drive traffic to Amazon's website. Additionally, Amazon encourages customers to share their experiences and opinions through user-generated content, such as reviews and testimonials. This not only provides valuable insights for potential customers but also acts as a form of social proof, further enhancing Amazon's credibility and reputation.

Related: Lululemon Marketing Strategy - A Closer Look

Amazon's Approach to Social Media Marketing

Amazon understands the importance of tailoring its social media marketing strategy to suit different platforms and target demographics. Whether it's creating visually appealing content for Instagram or utilizing Facebook's powerful ad targeting capabilities, Amazon deploys a multi-pronged approach to maximize its social media presence.

On Instagram, Amazon showcases its products through stunning visuals and creative storytelling. The platform's emphasis on aesthetics allows Amazon to highlight the unique features and benefits of its offerings, captivating users' attention and driving engagement. Additionally, Amazon utilizes Instagram's shopping features, enabling users to seamlessly purchase products directly from the app.

Furthermore, Amazon actively encourages user-generated content by incentivizing customers to share their experiences and opinions on social media. Through contests, giveaways, and customer spotlight features, Amazon taps into the power of word-of-mouth marketing and harnesses the influence of its satisfied customer base.

Amazon also recognizes the potential of video content in capturing users' attention and conveying its brand message effectively. The company leverages platforms like YouTube and TikTok to create engaging and informative videos that showcase its products in action. These videos not only entertain and educate viewers but also drive traffic to Amazon's website, ultimately leading to increased sales.

In addition to organic content, Amazon also invests in paid social media advertising to reach a wider audience. By utilizing Facebook's powerful ad targeting capabilities, Amazon can tailor its advertisements to specific demographics, interests, and behaviors. This targeted approach ensures that Amazon's ads are shown to the most relevant audience, maximizing the return on investment and driving conversions.

Related: Uniqlo's Winning Marketing Strategy

The Power of Amazon Prime in Marketing

How amazon prime enhances customer loyalty.

Amazon Prime, Amazon's subscription-based membership program , has revolutionized customer loyalty in the e-commerce industry. By offering free and expedited shipping, exclusive access to deals, and a host of digital benefits such as Prime Video and Prime Music, Amazon has created an unparalleled value proposition for its customers.

With millions of Prime subscribers worldwide, Amazon enjoys a significant competitive advantage. The perks and convenience of Prime membership incentivize customers to consolidate their purchases on Amazon, further solidifying the company's market dominance.

The Role of Prime in Amazon's Sales Strategy

Amazon strategically leverages the power of Prime to drive sales and promote customer engagement. For instance, the Amazon Prime Day, an annual sales event exclusively for Prime members, generates tremendous buzz and boosts sales across various product categories.

Additionally, Prime's vast customer base provides Amazon with valuable data and insights, enabling the company to personalize its marketing strategy and offer targeted promotions. By understanding individual customer preferences and purchase patterns, Amazon can deliver highly relevant recommendations, driving repeat purchases and fostering long-term customer loyalty.

Final Thoughts on Amazon's Marketing Strategy

As this case study demonstrates, Amazon's marketing strategy is a carefully orchestrated combination of customer centricity, SEO tactics, advertising prowess, and social media mastery.

By staying true to its core principles, adapting to changing market dynamics, and embracing innovation, Amazon continues to dominate the e-commerce landscape, setting new benchmarks for success.

About the Author

Hi, I'm Justin and I write Brand Credential. I started Brand Credential as a resource to help share expertise from my 10-year brand building journey. ‍ I currently serve as the VP of Marketing for a tech company where I oversee all go-to-market functions. Throughout my career I've helped companies scale revenue to millions of dollars, helped executives build personal brands, and created hundreds of pieces of content since starting to write online in 2012.

As always, thank you so much for reading. If you’d like more personal branding and marketing tips, here are more ways I can help in the meantime:

Connect with me on Instagram , TikTok , and LinkedIn .
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Read my free book, “ The Personal Brand Blueprint: A No-Nonsense Guide to Personal Branding in the Age of the Creator ”

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The Integration of Digital Business Models: The Amazon Case Study

First Online: 21 May 2022

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Carlo Bagnoli 10 ,
Andrea Albarelli 11 ,
Stefano Biazzo ORCID: orcid.org/0000-0003-3373-2964 12 ,
Gianluca Biotto 13 ,
Giuseppe Roberto Marseglia 14 ,
Maurizio Massaro ORCID: orcid.org/0000-0001-6461-2709 15 ,
Matilde Messina 13 ,
Antonella Muraro 16 &
Luca Troiano 17

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The final chapter involves the description of the Amazon case study. The intention is to reconnect the various categorizations illustrated in the previous chapter to a real-world example for the purpose of presenting a successful case of business disruption as Amazon is known to have disrupted retail. The analysis aims at highlighting the fact that Amazon combines all the business model frameworks described in the preceding chapters as well as investigating their coexistence within a single organization.

The present chapter also explains a few methodologies which have been developed in order to guide companies through the process of disrupting their existing business models and facilitating the shift towards an innovative framework. Digital technologies can ease the above-mentioned transition as firms are required to select the technological advancements enabling them to accomplish particular organizational goals.

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Stone, B. (2014). Vendere tutto. Jeff Bezos e l’era di Amazon . Hoepli.

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Forbes. (2021). Amazon non è immortale. E il declino potrebbe essere già cominciato . https://forbes.it/2021/10/04/amazon-non-immortale-potrebbe-avere-gia-iniziato-declino/

Bishop, T. (2013). Bezos: 3D printing “exciting” but not disruptive for Amazon in short term . GeekWire.

Battistella, C., Biotto, G., & De Toni, A. F. (2021). From design driven innovation to meaning strategy. Management Decision, 50 (4), 718–743.

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Bagnoli, C., et al. (2018). Business Model 4.0. I modelli di business vincenti per le imprese italiane nella quarta rivoluzione industriale . Edizioni Ca’ Foscari.

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Carlo Bagnoli

Department of Environmental Sciences, Informatics and Statistics, Ca’ Foscari University of Venice, Mestre, Venice, Italy

Andrea Albarelli

Department of Management and Engineering, University of Padua, Padua, Italy

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Strategy Innovation S.r.l., Venice, Italy

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University of Pavia, Pavia, Italy

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Bagnoli, C. et al. (2022). The Integration of Digital Business Models: The Amazon Case Study. In: Digital Business Models for Industry 4.0. Future of Business and Finance. Springer, Cham. https://doi.org/10.1007/978-3-030-97284-4_4

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Key Lessons From Amazon's Customer Service Chatbot Q

I nnovations in artificial intelligence are continuously refining the quality of customer interactions. Here's how to make them work for you.

Amazon's launch of the AI chatbot Q represents a significant development in the integration of artificial intelligence in customer service. This advancement and others demonstrate AI's growing influence in enhancing customer experience and efficiency.

As AI tools become more sophisticated, they offer unparalleled opportunities for personalizing customer interactions, a crucial factor in today's competitive market. Understanding the nuances of this transformation is essential for businesses aiming to leverage AI for improved customer engagement and retention.

More businesses are using AI in customer service

Intercom's "The State of AI in Customer Service" 2023 report offers a deep dive into how global support leaders perceive and adapt to AI advancements in customer service. A striking 69 percent of leaders are planning to escalate their AI investments, seeing AI's potential to redefine customer service paradigms. Interestingly, 78 percent of these leaders believe AI will not only preserve human jobs in customer support but also create new roles, countering the common misconception of AI as a job displacer. This reflects a growing recognition of A I as a tool for augmenting human capabilities , enhancing efficiency, and fostering a more dynamic customer service environment. Moreover, 73 percent of leaders foresee AI-assisted services becoming a customer expectation within five years, indicating a shift toward more AI-integrated customer service models.

The advancements in generative AI and its impact

BCG's " How Generative AI Is Already Transforming Customer Service " report sheds light on its transformative impact on customer service. Generative AI, exemplified by tools like ChatGPT, is increasingly seen as a driver of significant productivity gains. For instance, renewable energy group Octopus Energy's implementation of AI for customer email responses led to a remarkable 18 percent increase in customer satisfaction. Yet the journey towards fully autonomous AI systems is not without its challenges. Issues such as inherent biases in training data and occasional inaccuracies necessitate a careful balance between AI autonomy and human oversight. The key lies in identifying use cases where AI can provide maximum value without compromising reliability and ethical considerations.

Amazon's AI chatbot Q: A case study

Amazon Web Services AI chatbot Q represents a groundbreaking development in customer service, showcasing Amazon's commitment to utilizing advanced technology to enhance customer interactions. Q stands as a symbol of the evolving landscape in customer service, where AI-driven solutions are becoming pivotal for businesses. Here are the key features and implications of Amazon's Q:

Revolutionizing With Generative AI: Q integrates generative AI and large language models, providing accurate and timely responses. This technology marks a substantial improvement in automating and streamlining customer support processes.
Transition to Proactive Service: Shifting from traditional reactive approaches, Q exemplifies a proactive strategy in customer service. It efficiently addresses the modern necessity for rapid and precise digital communication.
Broad Accessibility and Ease of Use: Amazon's Q democratizes AI in customer service, making it accessible to many users, including those without deep technical expertise. This broadens the scope of AI's application in various business contexts.
Cost-Effective AI Innovation: With its competitive pricing model, Q positions itself as an economical AI solution for businesses, influencing the future of investments in AI-enhanced customer service tools and setting new industry benchmarks for efficiency and customer interaction personalization.

The role of AI in personalizing customer experiences

AI's capacity for personalization is revolutionizing customer interactions. Statista reports that 73 percent of consumers see AI as positively impacting customer service, particularly in creating personalized, seamless experiences. This personalization extends beyond mere efficiency; it involves understanding customer preferences, history, and behavior to offer tailored solutions, thereby significantly enhancing customer engagement and loyalty.

Emerging techniques for enhanced AI interactions

Innovations in AI are continuously refining the quality of customer interactions. Techniques like sentiment analysis and advanced contextual understanding enable AI systems to respond more empathetically and accurately to customer inquiries. The ability of AI to adapt and learn from interaction history is crucial for delivering customized experiences. However, maintaining a balance between AI-driven efficiency and human empathy remains a significant challenge. As AI becomes more sophisticated, it must maintain the "human touch" that is essential in customer service interactions.

Undeniable impact on customer service

The case of Amazon's Q highlights the potential of AI chatbots in reshaping customer service dynamics. As Gartner management consultants point out , the cost-effectiveness of AI in customer service is remarkable, with chatbot interactions costing significantly less than human interactions. Businesses are encouraged to embrace AI innovations responsibly, ensuring they effectively balance technological advancements with the nuances of human interaction, thereby paving the way for improved customer experiences and competitive advantage.

This post originally appeared at inc.com .

Click here to subscribe to the Inc. newsletter: inc.com/newsletters "

Key Lessons From Amazon's Customer Service Chatbot Q

How Amazon grew an awkward side project into AWS, a behemoth that’s now 4 times bigger than its original shopping business

If you have touched your phone or computer today, you very likely have been touched by a vast business few outside the technology world are aware of. Maybe you’ve checked the Wall Street Journal or MarketWatch, traded a stock on Robinhood, bet on a football game through DraftKings , or posted on Pinterest or Yelp; ordered treats for Fido on Chewy or treats for yourself on DoorDash; submitted an expense report on Workday or made plans for the evening via Tinder, OkCupid, or Hinge.

If so, you did it with the help of Amazon Web Services. The less glamorous sibling to Amazon’s operations in e-commerce, streaming video, and smart devices, AWS is no less ubiquitous, deploying millions of computers worldwide, humming away somewhere in the cloud.

For all those AWS customers the on-demand cloud computing platform isn’t just another vendor. They rely on it so heavily that it resembles a public utility—taken for granted, but essential to keep the machinery humming. In the past 12 months each of the companies mentioned above has stated in Securities and Exchange Commission filings that they “would be adversely impacted” if they lost their AWS service. Hundreds more companies— Netflix , Zoom , Intuit , Caesars Entertainment—have reported the same risk factor to the SEC in the past year. By the way, the SEC uses AWS. (So does Fortune .)

And those are but the tiniest fraction of AWS customers. AWS—initially run by Andy Jassy, who went on to succeed Jeff Bezos as Amazon’s CEO—won’t say how many customers it has, only that it provides computing power, data storage, and software to millions of organizations and individuals. Now, even as Amazon lays off a reported 10,000 workers, Wall Street analysts expect another blowout performance from its web services division. That’s probably why few if any of those staffing cuts will affect this relatively recession-proof part of Bezos’s empire. (Amazon won’t say how many of its 1.5 million employees work for AWS.)

For years AWS has brought in more profit than all other divisions of Amazon combined, usually by a wide margin. AWS’s operating profit last year, $18.5 billion, was nearly three times the operating profit reported by the rest of the company ($6.3 billion). AWS pulled in $58.7 billion of revenue in this year’s first nine months; if it were independent, it would easily rank in the Fortune 100.

How did this offshoot of an online retailer come to rule the lucrative cloud-computing industry, towering over tech giants such as Microsoft and Google , which might have seemed better positioned to dominate?

AWS’s ascent is so unlikely that it demands an explanation. It reveals the power of a truly iconoclastic culture that, while at times ruthless, ultimately breeds innovation and preserves top talent by encouraging entrepreneurship.

The best-known origin story of AWS is that it started when Amazon had some spare computer capacity and decided to rent it out to other companies. That story won’t die, but it isn’t true. The real story traces a circuitous path that could easily have ended in a ditch. It’s grounded in a philosophy that still guides AWS’s progress.

“To me, it’s the concept of insurgents versus incumbents,” says Adam Selipsky, who became AWS’s CEO last year when his predecessor, Jassy, took over as Amazon CEO. Selipsky, 56, speaks quietly, conveying an understated intensity. “One thing that I think is really important, that we intentionally worry about all the time,” he says, is that “we continue to keep the customer need dancing in front of our eyes at all times.”

The real story of the AWS insurgency began with Amazon’s innovative responses to two problems. First: By the early 2000s, Amazon—still known mainly as an online bookseller—had built from scratch one of the world’s biggest websites, but adding new features had become frustratingly slow. Software engineering teams were spending 70% of their time building the basic elements any project would require—most important, a storage system and an appropriate computing infrastructure. Building those elements for projects at Amazon scale was hard, and all that work merely produced a foundation on which to build the cool new customer-pleasing features Amazon was seeking. Every project team was performing the same drudgery. Bezos and other Amazon managers started calling it “undifferentiated heavy lifting” and complaining that it produced “muck.”

In response, Selipsky recalls, company leaders began to think, “Let’s build a shared layer of infrastructure services that all these teams can rely on, and none of them have to spend time on general capabilities like storage, compute capabilities, databases.” Amazon’s leaders didn’t think of it as an internal “cloud”—the term wasn’t widely used in the tech world yet—but that’s what it was.

Charts show Amazon's revenues and profits

The second problem involved other websites wanting to add links to Amazon products on their own pages. For example, a website about cooking might recommend a kitchen scale and include a link to the Amazon.com page for the product. Amazon was all for it, and would send them a bit of code they could plug into their site; if someone bought the product through the link, the site owner earned a fee. But as the program grew, cranking out bits of code for every affiliate site became overwhelming, and those affiliates’ website developers wanted to create their own links and product displays instead of the ones Amazon sent them. So in 2002 Amazon offered them a more advanced piece of software, enabling them to create far more creative displays. The new software was complicated. Users had to write software rather than just plug it in. Yet thousands of developers loved it immediately.

When Amazon launched a fuller, free version of the software building block a few months later, it enabled anyone, not just affiliates, to incorporate Amazon features into their sites. The surprise: A lot of the downloads were going to Amazon’s own software engineers. The building block turned out to be a proof of concept for the labor-lightening innovations that Amazon itself was looking for.

A picture was emerging. Amazon desperately needed to free its software developers from creating muck. Developers everywhere, not only its own, were starving for new tools that did just that. “We very quickly figured out that external developers had exactly the same problems as internal developers at Amazon,” Selipsky says.

But was that a business for Amazon? During a 2003 offsite at Bezos’s house, the company’s top managers decided that it could be. That decision was the turning point, especially significant because it could so easily have gone the other way. Amazon’s customers were consumers who bought “new, used, refurbished, and collectible items,” as the company told investors at the time. Why would anyone imagine this company could build a business selling technology services to software developers?

The decision to plunge ahead revealed a subtle distinction that outsiders didn’t understand. The world saw Amazon as an online retailer, but the company’s leaders never thought of it that way. They thought of it as “a technology company that had simply applied its technology to the retail space first,” Jassy later told Harvard Business School professors who were writing a case study. For that kind of company, AWS looked like a promising bet.

Coming out of the 2003 offsite, Jassy’s job was to build a team and develop AWS. He wrote a proposal for it as a cloud-computing business. The document, one of the famous six-pagers used at Amazon’s executive meetings instead of PowerPoint (which is banned), reportedly went through 31 revisions.

It took three years before AWS went live. In 2005 Jassy hired Selipsky from a software firm to run marketing, sales, and support, Selipsky recalls: “Amazon called and told me there was this initiative for something about turning the guts of Amazon inside out, but other companies could use it.” AWS’s first service, for data storage, “was such a novel concept that it was even hard to explain and hard for me to understand,” he says.

Wall Street didn’t get it. “I have yet to see how these investments are producing any profit,” a Piper Jaffray analyst said in 2006. “They’re probably more of a distraction than anything else.”

The rest of the world didn’t get it either. “I cannot tell you the number of times I got asked, with a quizzical look on people’s faces, ‘But what does this have to do with selling books?’ ” Selipsky recalls. “The answer, of course, was: AWS has nothing to do with selling books. But the technology we use to sell books has everything to do with AWS and what we can offer customers.” Those customers were software developers, an entirely new target market that baffled outsiders.

AWS was prepared for that reaction. One of Amazon’s principles reads in part: “As we do new things, we accept that we may be misunderstood for long periods of time.”

On the day in March 2006 when AWS finally launched its inaugural service—S3, for Simple Storage Service—Selipsky was at a trade show in Santa Clara, Calif., “in a windowless, internet-less conference room,” as he describes it, unable to learn how the launch was going. At day’s end he and a colleague ran outside to call Seattle for news.

“We were told that 12,000 developers had signed up,” he says, a note of marvel still in his voice. “On the first day. It was just amazing.”

Five months later AWS launched its other foundational service, EC2, for Elastic Compute Cloud, which was also instantly popular. The revolution had begun. Instead of raising millions of dollars to buy servers and build data centers, startups could now get online with a credit card, and pay a monthly bill for just the computing power and storage they used. If their new app was a hit, they could immediately engage all the cloud services that they needed. If it bombed, they weren’t stuck with rooms of junk equipment. As a Silicon Valley entrepreneur and early AWS customer told Wired in 2008: “Infrastructure is the big guys’ most powerful asset. This levels the field.”

In response to that historic shift, AWS’s potential competitors did … nothing. “A business miracle happened,” Bezos told a conference years later. “This is the greatest piece of business luck in the history of business so far as I know. We faced no like-minded competition for seven years. I think the big established enterprise software companies did not see Amazon as a credible enterprise software company, so we had this incredible runway.”

Selipsky suspects an additional motivation: “They either didn’t believe this could be a real business, or they were so threatened by what it would do to their own business models, and the way they were overcharging customers, that they didn’t want to believe it.”

No one, not even at Amazon, foresaw how massive a business cloud computing would be, or AWS’s dominance in the space. To understand how this happened, it’s worth examining the company’s guiding principles.

Eye-roll alert: Every company has principles, missions, visions, values; the vast majority are indistinguishable and sound as if they were written by committees, which they probably were. Some of Amazon’s leadership principles, as they’re called—there are 16—sound that way, until they get a little “peculiar,” to use a favorite Amazonian word.

For example, principle No. 11 begins, “Earn trust.” Leaders, it explains, “are vocally self-critical, even when doing so is awkward or embarrassing. Leaders do not believe their or their team’s body odor smells of perfume.” This peculiarity is a badge of pride at Amazon; its web page for job seekers even says that its use of the principles “is just one of the things that makes Amazon peculiar.”

Not every Amazonian observes every principle all the time; in a company of 1.5 million employees, that’s not realistic. But Amazon’s batting average is high.

To answer the basic question of why a retailer would even think of creating AWS, consider principle No. 1, seemingly the hoariest of them all: “Customer obsession.” Amazon sees itself as a tech company and sees the world as 8 billion potential customers. That’s one reason AWS made sense for a bookseller.

“I cannot tell you the number of times I got asked … ‘But what does this have to do with selling books?’” Adam Selipsky, CEO, Amazon Web Services

Amazon allows new projects lots of time, as with AWS, in part to make sure decisions are based on data. An unusual principle states that leaders “work to disconfirm their beliefs.” Groupthink is comforting, contagious, and dangerous. Being able to invoke one of the principles enables doubters to speak up.

“We have senior engineers who will stop a meeting and say, ‘We’ve got to disconfirm our beliefs—we’re going too far here without checking,’ ” says Mai-Lan Tomsen Bukovec, who oversees AWS’s storage services. “That’s actually kind of revolutionary in terms of corporate culture.”

It’s not a culture for everyone. Amazon is a famously demanding place to work, and there are plenty of stories of employees who found it to be too much. Media reports have criticized Amazon’s treatment of workers, and the company is battling unionization efforts at some of its e-commerce warehouses. It’s noteworthy that last year Amazon added a new leadership principle: “Strive to be Earth’s best employer.”

“It’s not good for our business and not good for our customers if we turn out great employees and burn them out, and they leave after a couple of years,” says Matt Garman, an early AWS employee who now oversees sales and marketing. “Sometimes there are people who don’t like the culture, don’t like those leadership principles. It’s not a good fit for them. People like the culture or they don’t like the culture, and I think that’s okay. But we want people here for the long term.”

Asked to describe AWS’s strategy, Tomsen Bukovec says, “That’s not a word we use a ton.”

The foundation of conventional strategy, the subject of hundreds of books and articles, is understanding a company’s industry and competitors. That approach gets us nowhere with Amazon. What industry is it in? No one industry encompasses selling dog food and selling computing power.

So does Amazon even have a strategy? “Yes,” says Ram Charan, an adviser to CEOs and boards, and coauthor of a book on Amazon’s management system. But “it’s not a competitive strategy,” he says. “It’s a customer strategy.”

That’s a mind bender. Business is competition, and business strategy is inherently competitive strategy. Except that at Amazon it isn’t. If it had been—if Amazon had been conventionally competitor-focused—AWS probably wouldn’t exist.

Colin Bryar, a former Amazon executive, says he’s often asked what Amazon is going to build next. Can it repeat what it did with AWS, create an out-of-the-blue business, unexpected and underestimated, in which it becomes dominant? “That’s not the first question Amazon asks,” Bryar says. “They ask, ‘What’s the next big customer problem we can go try to solve?’ ”

The word “big” is key. At Amazon’s size—analysts expect revenue exceeding $500 billion for 2022—small problems are simply not of interest. When company leaders identify a sufficiently big problem, they must then conclude that Amazon can solve it, and that customers will adopt the solution. Those are not easy or quick questions to answer.

Cloud computing will grow 20% annually through 2026, far faster than any other segment of infotech, according to the Gartner tech consulting firm. It’s no longer just smaller companies and startups who don’t want to invest in their own server systems. Many AWS customers are increasing their spend, and some “spend literally hundreds of millions of dollars per year on AWS,” says Gartner analyst Raj Bala, who sees the contracts. “I’m not shocked anymore to see a $200 million annual commitment, which is astonishing.”

Yet AWS’s dominance of the market will likely diminish even as its revenue grows. With a 44% share of the market, AWS has 20 points over Microsoft’s 24%—but that lead is shrinking, says Bala. “In the next five, six, seven years, that gap is going to be very, very narrow, if not equal.” That’s because “a lot of late adopter enterprises are coming to market,” he says, “and a lot of these folks will gravitate to Microsoft because they’ve got an existing contractual relationship with Microsoft.”

The narrowing gap with Microsoft is probably inevitable. AWS’s great challenge for the future is to maintain the discipline that made it a global colossus.

Losing that discipline is insidiously easy. Jim Collins, author of Good to Great , which identifies the factors shared by the world’s most successful companies, has also written an analysis of failure, How the Mighty Fall . Winners invariably maintain discipline, and loss of discipline is always an element of decline. One of the principle threats? Attempts to control workers by overregulating them. “Bureaucracy subverts discipline,” he tells Fortune.

When a company is growing as fast as AWS, it can be tempting to weaken hiring standards. “As you grow, you start to bring in some of the wrong people,” he says, speaking of companies generally. “If they don’t get the intensity of being there, they shouldn’t be there, but if enough of them stay, you try to control them with bureaucracy. Then the right people get out, which creates a cycle.”

With success and growth come further threats to discipline. When a business is riding high, “easy cash erodes cost discipline, and that discipline is hard to recover once you lose it,” he says. Expansion brings risks, too: Responding desperately to deteriorating performance, the business bets on “undisciplined discontinuous leaps”—acquisitions or expansions for which it isn’t ready.

At the top of its game, bigger and stronger than any competitor, AWS must now meet an enviable challenge but a challenge nonetheless: the curse of success. Its most crucial task is to maintain the unwavering rigor—the discipline—of its principles and processes.

Selipsky seems to understand the need. Asked to define his job, he is silent for several seconds. Then, quietly but emphatically, he says his job “is to ensure that the positive, productive, useful elements of what got us to this stage—that we hold those dear, and we safeguard them, and we don’t let them slip away. We don’t become incumbents.”

Amazon’s next big, thorny problem to solve

What might be the next industry to get Amazon’s AWS-style mega-venture treatment? The leading candidate is health care.

In 2018 Amazon bought PillPack, an online pharmacy, and last summer it paid $3.9 billion for One Medical, a membership-based primary-care provider operating across the U.S., saying in its announcement that “we think health care is high on the list of experiences that need reinvention.”

No one would disagree. For a company that seeks big problems to solve, this may be the biggest opportunity of all. Health care is the largest sector of the U.S. economy, and the industry is growing fast worldwide.

Data is the problem at the heart of health care’s inefficiency and unfathomable, wearisome customer experiences—and it’s possible that it could be the solution.

That data is staggering in quantity and mostly unstructured—handwritten notes and X-ray and lab reports, sometimes of life-and-death importance—in an industry that is the last bastion of fax machines.

It’s a particularly attractive conundrum to Amazon because of the company’s dominance of cloud computing. AWS is already deeply entrenched in the industry, used by hospitals, pharma companies, equipment makers, insurers, pharmacy benefit managers, the Centers for Medicare and Medicaid Services, and more.

Another potential advantage is Amazon’s massive international workforce and its enormous health care needs and expenses. Just as Amazon developed AWS by observing its own software needs and seeing them mirrored elsewhere, its own challenges as a growing corporate behemoth now may point the way to a new market opportunity.

This article appears in the December 2022/January 2023 issue of Fortune with the headline, “How Amazon’s cloud took the world by storm.”

Our new weekly Impact Report newsletter will examine how ESG news and trends are shaping the roles and responsibilities of today's executives—and how they can best navigate those challenges. Subscribe here .

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HANNAH BATES: Welcome to HBR On Strategy, case studies and conversations with the world's top business and management experts, hand-selected to help you unlock new ways of doing business. Amazon ...
Amazon's E-Commerce UX Case Study
This is a case study of Amazon's e-commerce user experience (UX) performance. It's based on an exhaustive performance review of 1017 design elements. 243 other sites have also been benchmarked for a complete picture of the e-commerce UX landscape. Amazon's overall e-commerce UX performance is decent. Amazon has decent performances across ...
Amazon's User Experience: A Case Study
A recent survey found that most generations rank Amazon's user experience (UX) as the most appealing. Of those surveyed, Amazon's UX ranks highest among baby boomers (29%) and Generation X (21%). Designing user experience for multiple generations is a challenge. Many older users are only recently familiar with e-commerce and can get ...
Lessons from Amazon's Early Growth Strategy
Transcript. April 24, 2024. So much has been written about Amazon's outsized growth. But Harvard Business School professor Sunil Gupta says it's the company's unusual approach to strategy ...
Amazon Marketing Strategy: Case Study (2024)
Posted on May 22, 2024 by Daniel Pereira. The Amazon Marketing Strategy has been largely responsible for the company's meteoric rise to becoming one of the most powerful players in the global market. Dissimilar to conventional marketing approaches, Amazon's strategy has revolutionized the way businesses operate, reach out to customers, and ...
Amazon Marketing Strategy 2024: A Case Study
Amazon is now in more than 200 countries, and its website sells almost everything. Its subsidiaries include Audible, Twitch, IMDb, and Amazon Web Services. Amazon Marketing Strategy is something that has become a case study at all the top MBA colleges. Amazon's marketing strategy helped the company achieve a 1.7 trillion-dollar valuation in 2021.
Amazon Marketing Strategy Case Study for The Curious
Amazon Marketing Strategy Case Study for The Curious. May 3, 2024 / Ecommerce, Marketing / By Calvin Rodrigues. According to Statista, Amazon's net sales revenue went from $61.09 billion to $513.98 billion between 2012 and 2022 - an incredible eight-fold increase. You wonder how much bigger it could get. But, the company certainly has ...
Amazon Business Case Study [2024]: In-depth Analysis
These moves catapulted the company to a 1 trillion dollar valuation in 2018. The company's profits surged during the pandemic as Bezos' hourly wealth increased by USD 11.7 million. The following year, Bezos stepped down as the CEO and found his replacement in Andy Jassy, the CEO of Amazon Web Services. Now that we know the history of Amazon ...
UI/UX Case Study
Blending into Amazon's Design System & Start Designing 😎. User Testing: Getting validation on my designs. 1. Auditing the current UI screen. Note: I'll be focusing on the flow from "search to cart" here. There are 2 parts here: First is auditing based on design principles & from my own perspective as an amazon user.
A Comprehensive Case Study on Amazon's Marketing Strategy
Final Thoughts on Amazon's Marketing Strategy. As this case study demonstrates, Amazon's marketing strategy is a carefully orchestrated combination of customer centricity, SEO tactics, advertising prowess, and social media mastery. By staying true to its core principles, adapting to changing market dynamics, and embracing innovation, Amazon ...
The Integration of Digital Business Models: The Amazon Case Study
The final chapter involves the description of the Amazon case study. The intention is to reconnect the various categorizations illustrated in the previous chapter to a real-world example for the purpose of presenting a successful case of business disruption as Amazon is known to have disrupted retail. The analysis aims at highlighting the fact ...
Evaluating Websites Audit Tools: A Case Study of the Amazon Website
Three website evaluation tools are used in this regard: (1) SEOptimer, (2) W ebsite Grader, and (3) Qualidator. Kaur et al. (2016) used similar tools to e valuate. the performance and overall ...
Key Lessons From Amazon's Customer Service Chatbot Q
Here are the key features and implications of Amazon's Q: Revolutionizing With Generative AI: Q integrates generative AI and large language models, providing accurate and timely responses. This ...
How Amazon grew an awkward side project into AWS, a behemoth ...
Over two decades, AWS has become the ultimate case study in corporate innovation. ... Adam Selipsky, CEO, Amazon Web Services. Amazon allows new projects lots of time, as with AWS, in part to make ...