Have you ever asked yourself how Amazon can reinvent itself over and over again, and how Amazon came up with ideas such as Amazon Prime, Amazon Fresh or Amazon Kindle? Inventions, you spend with at least a certain amount of time of your day. According to Julian Birkinshaw (2016), "Amazon is the single best example of a serial business model innovator" due to the fact that the technology company “has relentlessly built new businesses alongside its existing ones" (Birkinshaw, J. & Brewis, K., 2016). This paper shall discuss the characteristics that Amazon has been made into what it represents today as well as real-world examples that support each point and that oppose each point.
Table of Contents
Amazon – Best Example of a Serial Business Model Innovator
Characteristics
Real-World Examples
Research Objectives & Key Themes
This paper examines the fundamental business characteristics that have enabled Amazon to maintain its status as a serial business model innovator. The primary goal is to analyze the strategic pillars of the company—such as its customer-centric culture, diversification, and risk-acceptance mentality—and to contrast these practices with real-world applications across various other industries.
- Analysis of Amazon’s customer-centric and innovative business culture.
- Evaluation of the strategy of cannibalization and its role in disruption.
- Examination of diversification strategies and organizational structures.
- Comparison of success stories and failures among diverse global companies.
Excerpt from the Book
Characteristics
Amazon has invented a customer-centric culture that means the company focuses on the customers instead of reacting on competitor movements and on changes in the market. It is a process that puts the customer and its needs in the center and allows Amazon to be more innovated by being patient simultaneously (Birkinshaw, J. & Brewis, K., 2016). Amazon Dash, as one example, was invented due to the customer need for faster reorders of daily used products (Rao, L., 2017).
Furthermore, the technology company applies a strategy of cannibalization (disruption), even if it implies to dismantle its own line of business. Amazon sets high expectations for itself by being always the incumbent of the market that it operates. It is not willing to accept any stagnation. This characteristic allows it to be more flexible in any approach. Amazon Kindle, an electronic book reader, reinvented Amazon’s traditional book store business (Birkinshaw, J. & Brewis, K., 2016).
Amazon’s strategy of diversification has extended its existing lines of business as well as has accessed new markets. Diversification of its actual business was often criticized by market observers. One of the outcomes of this strategy is Amazon Studios that produces movies to be shown on Amazon Prime (Birkinshaw, J. & Brewis, K., 2016).
Summary of Chapters
Amazon – Best Example of a Serial Business Model Innovator: This introductory section establishes the premise that Amazon is a master of reinvention, consistently building new business models alongside existing ones.
Characteristics: This chapter details the core strategic pillars that define Amazon, including customer-centricity, cannibalization, diversification, a driver-of-innovation mindset, risk-acceptance, and a startup-like organizational structure.
Real-World Examples: This chapter provides a comparative analysis of how these identified characteristics are applied—or missed—by other global companies such as Starbucks, Uber, Alibaba, and Kodak.
Keywords
Amazon, Business Model Innovation, Customer-Centric Culture, Cannibalization, Disruption, Diversification, Driver of Innovation, Risk-Acceptance, Start-up Mentality, Flat Hierarchy, Strategic Management, Organizational Structure, Market Competitiveness, Business Reinvention.
Frequently Asked Questions
What is the core subject of this paper?
The paper explores the strategic characteristics that enable Amazon to continuously reinvent itself and remain a leader in serial business model innovation.
Which central thematic areas are covered?
The core themes include customer-centricity, the strategy of cannibalization, business diversification, the importance of a driver-of-innovation culture, risk-acceptance, and agile organizational structures.
What is the primary objective of this study?
The goal is to analyze Amazon's specific business traits and validate them by comparing their successful or unsuccessful application in other companies across different sectors.
Which scientific methodology is applied?
The paper utilizes a qualitative literature analysis, synthesizing theories from business experts like Julian Birkinshaw and applying them to diverse real-world case studies.
What topics are discussed in the main section?
The main section investigates specific characteristics of Amazon—such as its flat hierarchy and willingness to dismantle its own business lines—followed by a wide range of industry examples demonstrating these principles.
Which keywords characterize this work?
The work is characterized by terms such as business model innovation, customer-centric culture, cannibalization, and organizational agility.
How does Amazon's 'strategy of cannibalization' function in practice?
It involves the willingness of the company to disrupt its own existing product lines to prevent stagnation and maintain a competitive edge, as seen with the introduction of the Kindle.
Why is the 'risk-acceptance mentality' crucial for Amazon?
It allows the company to treat failures, such as the Fire Phone, as learning opportunities that ultimately refine their business strategy and fuel future inventions.
What distinguishes Amazon's corporate structure?
Amazon utilizes a flat hierarchy that promotes a startup-like environment, encouraging employees to be inventive and prioritize long-term growth through effective idea management.
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- Friederike Berg (Autor:in), 2019, Amazon. Best Example of a Serial Business Model Innovator, München, GRIN Verlag, https://www.grin.com/document/505689
