Has Amazon lost the plot?
This month Amazon became the first public company to lose $1trn in market value. Is the business just suffering from Big Tech malaise, or is there a more serious decline? Paul Simpson investigates.
Jeff Bezos, the Amazon founder and present chairman, has always urged every employee to act as if it was ‘Day 1’ at a start-up. His rationale was that “Day 2 = stasis.” But some analysts are beginning to wonder whether the e-commerce behemoth has reached ‘Day 2’ which, according to Bezos, is followed inevitably to irrelevance, excruciating decline and death.
On Wednesday 9 November, Amazon became the first public company to lose $1trn in market value – although the stock bounced back after Andrew Jassy, Bezos’ chosen successor as CEO, announced sweeping cost-cutting measures, including the loss of 10,000 jobs.
If you examine Amazon’s competitive strengths, as identified by Ram Charan and Julia Yang, in their 2019 book The Amazon Management System, it is easier to understand investors’ concern. The ‘building blocks’ of Amazon’s success, Charan and Yang say, include:
1. A forever ‘Day 1’ culture.
2. Making good decisions, fast.
3. Delivering ground-breaking inventions.
4. AI-powered metrics and data.
5. A customer-obsessed business model.
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