Chapter 11 blog post-Amazon's diversification strategies

This week in Chapter 11 we will discuss Amazon and diversification strategies.

Today’s global economy firms must use corporate diversification

strategies just to stay profitable to hold on to their competitive advantage.

There are numerous types of corporate diversification, such as

limited corporate diversification which means “when all or most of its

business activities fall within a single industry.” (1)

A single-business firm consists of “firms with more than 95 percent of their total sales in a 

single industry”. (1) A dominant-business is described as “firms with between

70 percent and 95 percent of their total sales in a single industry”. (1)

Related corporate diversification is about entering a new market with a

new product that is somewhat related to a company’s existing product offering. Unrelated corporate diversification deal’s with firms entering a new market with a new product that is entirely unrelated to a company’s existing offering.

Amazon’s motto was “get big fast” (2). Within the last decade or so Amazon has evolved

into an e-commerce giant party through implementing corporate diversification strategy.

Amazon started from humble beginnings in 1994 as a single-business firm

selling books online and went to using a related and unrelated diversification

strategy by selling anything you can think of from food product to electronics to become

the largest e-Commerce Company in the world. Amazon is still

using a related diversification strategy by purchasing Whole Foods, offering a

prime subscription to members and offering cloud service

through AWS Amazon to companies like Netflix. Amazon must

continue to implement diversification strategies to sustain

competitive advantage in their market place.

1.Barney, J (2011). Gaining and Sustaining Competitive Advantage (4th ed). Upper Saddle River,    

   NJ: Pearson.

2."Bloomberg Game Changers"    https://www.youtube.com/watch?v=tfAhTtBlb2Q