1.

Were Amazon’s diversifications through Amazon Go and Amazon Elements appropriate, given the
company’s resources and capabilities? Were such diversifications risky strategic moves?

Amazon entered the high margin grocery and household goods section with Amazon Elements. It was part
of their backward integration policy to further their margins and to create products that would be seen
more trustworthy than others. Amazon already has success with Kindle. So with respect to resources and
capabilities, they have the power to adapt and become successful in any segment they enter. However,
entering grocery and household category is a risky strategy. Kindle was one of a kind and there was no
conflict of interest with their fellow partners in the marketplace. Whereas, Amazon elements is targeting
products which could cannibalize the sales of its partners. This would make Amazon a less attractive place
to sell on, which is Amazon’s core business.

Amazon Go, a cashier-less store, allows customers to walk into the store pick up the products and leave
the shop. Thereby, eliminating the queue to process payments through a technological innovation. It had
been working on this for four years and has developed the necessary skills and resources to enter a
physical retail store. Amazon Go would make Amazon more competitive with Walmart and Target. A move
in the right direction as 70-75 % of the whole retail revenues comes through physical store. This is part of
their forward integration process and improving last mile delivery. There are concerns of job loss but it is
part of a development, job loss in one sector will lead to hiring in another. Amazon should look at
expanding it to international market increase their overall market share.

2. Can Amazon reproduce its online retail success in offline retail segments? Will it be able to become
one of the biggest offline retail players?

While Amazon is gradually moving into the offline retail, its online retail model has been extraordinarily
successful. It’s online presence, efficient and effective R&D, strong marketing strategy, customer loyalty,
in depth customer insights, strong brand image and brand value along with an efficient supply chain will
surely propel Amazon to be successful in the offline segments.

Moreover, the technological advancement leads to the ease of checkout free convenience store, thereby
saving the time of customers making offline shopping superfast. This will eventually, attract customers
and help AmazonGo become one of the biggest offline retail players.

The same could be concluded by the response of the shareholders valuing Amazon higher.

3. As the first mover in its shopping technology, will Amazon Go be able to succeed in the long term?

Amazon Go is the start of “Future Retail”. There are looking at expanding into international markets and
also further developing the technology to be applicable in other segments. By being the first mover, it is
gaining free marketing from the media hubs and word of mouth marketing by its customers. This is
increasing their brand value and brand image in the short run. Having said that, this boast in the short run
will propel Amazon to be seen as a pioneer in shopping technology. With the technology always being
better and adaptable than other future competitors. With this customer loyalty and perception Amazon
Go will be able a success even in the long term.