Stay curious and always keep refreshing your sources of information. Do you like to stay curious and learn things from new places? How about CEO letters to shareholders? That is probably true if you are a shareholder. But what if you are not and just interested in the business? I believe the Bezos shareholder letter tells a lot about the Amazon culture, Jeff Bezos, and Amazon’s business strategy. I made sure to read them carefully.
While some of the most exciting possibilities of social networks are most likely in the future, there are a myriad of companies who benefit from social networks today.
Amazon.com differentiates itself not as an online store, but as a social network. Their interface, product line, and customerrelationship management, while strong, are easily replicated. What makes the site a standout is the customer reviews and suggestions.
For years, I’ve been fascinated by Jeff Bezos’ innovative vision and Amazon’s action and ability to execute. We have written a lot about him and Amazon. (See our article on why the Wal-Mart e-commerce strategy won’t beat Amazon.)
They are the most innovative company around in our humble opinion. Their innovation is in everything they do, not just technology.
Related material: 10 Growth Hacking Tactics … What Would Peter Drucker Say?
In this latest shareholder letter, 3 key elements of Amazon’s business strategy come to the forefront. Let’s review a summary of what the letter tells us about these strategy elements:
Information technology is by far the most important element of Amazon’s business strategy. Hands down in my opinion.
The Cloud and Amazon Web Services
Unless you work in technology or corporate logistics, you might not have known that Amazon was ahead of Google in the cloud business.
Most consumers will have encountered the cloud in the form of services where Google is strong—email (Gmail), document storage (Google Drive), and the like.
To understand the scale of the war brewing between them, it helps to understand that what Amazon and Google are really contesting is who gets to eat a bigger portion of the total corporate information-technology pie.
All the warehouses of servers that run the whole of the internet, all the software used by companies the world over, and all the other IT services companies hire others to provide, or which they provide internally, will be worth some $1.4 trillion in 2014, according to Gartner Research.
This is some six times Google and Amazon’s combined annual revenue last year. Not surprisingly, both companies have said at one point or another that this new revenue stream has the potential to be larger than all their current sources of income.
Amazon Web Services (AWS) is a collection of remote computing services that together make up a cloud computing platform, offered over the Internet. The most central and well-known of these services are the simple storage service (S3) and the elastic compute cloud (EC2). In 2010, Amazon launched 61 new services and features.
In 2011, that number was 82. In 2012, it was 159. In 2013: 280. They are also expanding their geographic footprint, with 10 current AWS regions around the world, including the East Coast of the U.S., two on the West Coast, Europe, Singapore, Tokyo, Sydney, Brazil, China, and a government-only region called GovCloud. The development teams work directly with customers and are empowered to design, build, and launch based on what they learn.
Prime
Prime was launched nine years ago: an ‘all-you-can-eat’, two-day shipping for a flat annual fee. At that time, Amazon had one million eligible Prime products. This year, they passed 20 million eligible products. They have added new digital benefits – including the Kindle Owners’ Lending Library and Prime Instant Video.
Amazon culture and values … logistics and delivery
Fresh grocery delivery
After trialing the service for five years in Seattle (no one accuses Amazon of a lack of patience), they expanded Amazon Fresh to Los Angeles and San Francisco. Prime Fresh members pay $299 a year and receive same-day and early morning delivery not only on fresh grocery items but also on over 500,000 other items ranging from toys to electronics to household goods.
They’re also partnering with favorite local merchants (the Cheese Store of Beverly Hills, Pike Place Fish Market, San Francisco Wine Trading Company, as examples) to provide the same convenient home delivery on a great selection of prepared foods and specialty items.
Their goal? To continue the methodical approach – measuring and refining Amazon Fresh – with the goal of bringing this service to more cities over time.
A vast market in online services.
Online services
Prime Instant Video
Prime Instant Video was launched in 2011 to provide customers with streaming video on demand, analogous to books.
In 2011 with 5,000 titles, they’ve grown selection to more than 40,000 movies and TV episodes.
The Amazon Studios team continues to invest heavily in original content and will compete in the new TV market of the future.
Fire TV
In the last month, the Amazon team launched Fire TV. Not only is Fire TV the best way to watch Amazon’s video offerings, it also embraces non-Amazon content services like Netflix, Hulu Plus, VEVO, WatchESPN, and many more.
In addition to Prime Instant Video, Fire TV gives you instant access to over 200,000 movies and TV episodes available a la carte. As a bonus, Fire TV also lets you play high-quality, inexpensive games on your living room TV.
Amazon company culture statement … listening to customers
Nothing gives Amazon a better result than “reinventing normal” – creating innovations that customers love and resetting their expectations for what normal should be.
Frustration-free packaging
Here Amazon’s battle is against annoying wire ties and plastic clamshells wrapping of products. An initiative that began five years ago with a simple idea that you shouldn’t have to risk bodily injury opening your new electronics or toys, has now grown to over 200,000 products, all available in easy-to-open, recyclable packaging.
Packaging designed to alleviate “wrap rage” and help the planet by reducing packaging waste. They include over 2,000 manufacturers in this Frustration-Free Packaging program.
Amazon Smile
In 2013 Amazon Smile was launched. This program’s goal was to create a simple way for customers to support their favorite charitable organizations every time they shop. When you shop at smile.amazon.com, Amazon donates a portion of the purchase price to the charity of your choice.
You’ll find the same selection, prices, shipping options, and Prime eligibility on smile.amazon.com as you do on Amazon.com – you’ll even find your same shopping cart and wish lists. In addition to the large, national charities you would expect, you can also designate your local children’s hospital, your school’s PTA, or practically any other cause you might like.
There are almost a million charities to choose from.
The Mayday button
Mayday reimagines and revolutionizes the idea of on-device tech support. Tap the Mayday button, and an Amazon expert will appear on your Fire HDX and can co-pilot you through any feature by drawing on your screen, walking you through how to do something yourself, or doing it for you – whatever works best. Mayday is available 24×7, 365 days a year.
Amazon’s response time goal is 15 seconds or less. This last year they beat that goal – with an average response time of only 9 seconds on their busiest day, Christmas. Pretty impressive, yes?
Amazon, we believe, is the most innovative company in America in an industry built around constant innovation and change. Why may you ask?
We believe there several good reasons. First, as one of the creators of the e-commerce industry, they will know the industry is in its infancy and is built on a foundation of new technology and constant introduction of new ways of doing things.
Second, they know their future is based on those trends. They also know to do new things well, they must be good at trying new ideas in many areas as experiments. These experiments, they realize, will not all work as planned, and some percentage will fail. They know and accept this without worry.
Here is where you can read the entire Bezos letter.
There are many great business growth campaigns we can learn from. Please post your comments below, offering questions or your own great examples of business innovation strategies.
So what’s the conclusion? The conclusion is there is no conclusion. There is only the next step. And that next step is completely up to you.
It’s up to you to keep improving your business strategy adaptation. Lessons are all around you. In many situations, your competitor may be providing the ideas and or inspiration. But the key is in knowing that it is within you already.
Need some help in capturing more improvements for your staff’s leadership, teamwork, and collaboration? Creative ideas in running or facilitating a team or leadership workshop?
Call today for a FREE consultation or a FREE quote. Learn about some options to scope your job.
Call Mike at 607-725-8240.
All you get is what you bring to the fight. And that fight gets better every day you learn and apply new ideas.
When things are not what you want them to be, what’s most important is your next step. Call today.
Test. Learn. Improve. Repeat.
Are you devoting enough energy to innovating your social media strategy?
Do you have a lesson about making your advertising better you can share with this community? Have any questions or comments to add in the section below?
Mike Schoultz is the founder of Digital Spark Marketing, a digital marketing and customer service agency. With 40 years of business experience, he blogs on topics that relate to improving the performance of your business. Find them on G+, Twitter, and LinkedIn.
Digital Spark Marketing will stretch your thinking and your ability to adapt to change. We also provide some fun and inspiration along the way. Call us for a free quote today. You will be amazed at how reasonable we will be.
More reading on the business process from Digital Spark Marketing’s Library:
