Amazon's Diversification Strategy

When you think about companies that succeed within the corporate diversification strategy, Amazon has to be at the top of that list.  Our text defines the corporate diversification strategy as one where “a firm brings in multiple businesses to its boundaries.”  While this may not have been a strategy they implemented from the beginning, their recent endeavors to bring varying businesses to the Amazon customer certainly shows their intent to master the corporate diversification process while keeping their core competency consistent among all diversified businesses.

While Amazon’s core business currently is the online marketplace most everyone knows and loves, one of the first diversified businesses the developed was closely related to their early years as an online book provider.  In 2007, Amazon introduced the e-reader, the Kindle, as a lightweight, tech-friendly alternative to the outdated physical book.  In one single device, customers were now able to access millions of books.  While the Kindle may not have seemed too far of a stretch from Amazon’s book identity, it helped launch their future diversification endeavors that have catapulted them to their current success.

As Amazon has strengthen their diversification over the years, another business that has helped them reach wider audiences and ingrain their core competency even further into their customers’ lives is their smart home device business, most specifically the products Alexa and Echo.  While these products may have seemed like an unnecessary luxury when they were first introduced, I can say personally that they are now a product I rely on in multiple aspects of my everyday life.  The Alexa and Echo allow you to access information, control the temperature in your house and even make Amazon orders all with the command of your voice.  In my opinion, this not only diversified Amazon’s corporate strategy but also made customers feel as though they had a personal Amazon assistant available to help at any time.

While Amazon may have explored various diversification efforts, it’s important to note that they have ensure their core competency is at the root of all diversification activities.  Amazon has always maintained a core competency of a customer experience superior to those of their competition.  In order to deliver this superior customer experience, Amazon maintains a commitment to the most seamless and easy process customers could imagine.  Whether it’s a smart home device like the Alexa or an e-reader like the Kindle, Amazon ensures all of the diversified products they offer are consistent with a seamless, easy experience while also innovating and ingraining the Amazon business further into their customers' lives.