Learn the Amazon Way
Jonathan Creasy
Portfolio Finance Director and Chief Finance Officer at The CFO Centre Limited
Amazon lessons to be learnt?
Amazon is today a fascinating Tech company which attracts a lot of attention, for good and bad reasons. Nicolas Colin’s article in The Family; 11 Notes on Amazon makes some very interesting observations that many of today’s Tech companies could learn from. A couple of the themes that I believe are worth replicating are:
Amazon puts the customer at the centre of everything it does and aims for Exceptional Customer Experience, and to identify and target Power Users. It does this so that it does not need to have the absolute cheapest price as it obtains customer loyalty by servicing the needs of the customer exceptionally well. This Customer at the Centre can come at the expense of investors and employees, however by generating higher margins and regular repeat customers they still manage (in the main) to keep all parties happy.
They also have a Coupled Business Model, that enables them to have different cashflow and margin models in the different parts of the business such that they can cross subsidies and fund each business as required i.e. they have a balance portfolio of businesses which complement and services each other.
With these 2 main themes, they have then become a Leader which again brings with it a competitive advantage, as they can win and keep customers at a higher margin than their competitors and being the leader is also key for many Investors.
Above are just a couple of my key observation but it is worth reading the complete article as it goes into a lot of depth on the above and other points.