How are leading companies innovating for sustainable growth? In this post, I explore how Amazon is investing in long term sustainability. The outsiders view. I am sure, these are the issues being discussed in the boardrooms at Amazon.
Amazon sustainable growth strategy
Amazon’s strategic risk:
What if all the vendors/ sellers on our platform left us and instead invested in their own platforms? What if they develop capabilities to sell without listing on Amazon? How do we survive in 10 to 30 years?
In response to increasing complaints from original equipment manufacturers to Amazon over fake products listing, piracy, copyrights infringements where criminals list products for patents they don’t own, Amazon is always setting higher standards to list on their platform. But this comes with a risk.
What if vendors opened their own digital channels in protest to Amazon’s tougher controls. If everyone left, Amazon would be no more. This is a catch 22. To sell more, Amazon must be a trusted platform known for its original quality products. To achieve this, more stringent rules for listing products on the platform must be set and enforced. But this risks a high churn or platform abandon rate. How do we balance the two?
The solution
Identify genuine manufactures and contract them to manufacture products for Amazon platform listing so as to get the best producers’ market on their platform. Amazon is rolling out this model strategically. It is selecting the best brands and manufacturers, covering a wide range of all products – from toys to consumables to electronics and beyond. Once all critical industries are covered, and Amazon is 100% sure of a fantastic experience for any platform visitor, it will enforce the listing standards. So many fakes shall be put off the platform.
Thanks to Amazon’s mature Big Data Analytics, Artificial Intelligence, and machine learning, which provides lethal focused insights for decision making, by the time the tough rules are enforced, the self-enrolled vendors shall suffer as the contracted high quality, brand manufacturers get better promotions on the site.
Already, Amazon’s Kindle and Audible business line, are doing well with Amazon originals. The originals are strategically marketed whereby members on the Kindle are given two free original titles monthly. Amazon reaches out to some of the top authors, writers, and experts in their respective fields, and engages them to produce new content exclusively for Amazon!
This is what strategic leadership is all about: high quality exclusive original content by Amazon is adequate to offer a wide choice for readers and generate decent returns for the company to win! In the long term, Amazon shall not need you as a Publisher. You may end up paying a subscription to list your books!
Copyright Mustapha B Mugisa, 2020. All rights reserved.
