Amazon Smart Innovation Strategy Essay Example

IT community and targeted them as a new customer base, requiring unique processes, resources, and profit strategies. In 2002, Amazon introduced its web services platform to cater specifically to this market.

A young company, despite the potential risks, chose to invest its innovation resources in new business models rather than its core. This decision proved fruitful as within five years, Amazon's web-services platform became the seventh-largest website globally. Expanding further, Amazon established Lab126 in late 2007 and introduced the Kindle e-book reader. Not only did this product have an unfamiliar business model for Amazon but it also had the potential to disrupt the publishing industry.

Amazon became an original equipment manufacturer (OEM) in order to launch this high-margin product-based offering. It integrated this technology into a digital media platform similar to iTunes, which efficiently delivered content through both transactions and subscriptions. Additionally, Amazon collaborated with content producers in unique ways and established an open back-end that enabled independent publishers to produce new content for the Kindle. In the initial year, an estimated 500,000 Kindles were sold by Amazon.

Amazon's expansion into the e-books market has not only positioned the company for success in this industry, but also in distributing newspapers and periodicals. What sets Amazon apart is its innate drive to transform. Whenever it identifies chances to serve new or existing customers in novel ways, it devises and establishes new business models to capitalize on them. Amazon possesses the remarkable capability to simultaneously launch and manage entirely new types of businesses while extracting value from its existing ventures.