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How Did Amazon Build Its ‘Sustainable Competitive Advantage’? -Business Strategy and The Key Success Factors
“One Million Titles, Consistently Low prices” — The blue underlined text in Amazon’s first homepage in 1995, announced the reason how they were different from others.
Tom Alberg, a former executive at McCaw cellular could not believe that the idea of buying books online through this ugly-looking website would work as he loved the beauty of browsing in bookstores.
The first Amazon website had a rudimentary search engine. People were worried about sharing credit card details wondering if their data would be safe. Many had no idea of how a virtual shopping basket worked. Also, the book would take a few days and sometimes weeks, if the title was rare, to arrive. But… two decades later Amazon has redefined the way the world shops — the company has grown to dizzying heights and is today the undisputed leader in online retailing worldwide. And it is not that the existing offline behemoth did not put up a stiff fight — however, Amazon prevailed and how!
How did Amazon build such a strong sustainable competitive advantage?
POSITIONING — TARGETING A NICHE
The first and foremost factor for a sustainable competitive advantage is to position your brand in a consumer’s mind. The ways to enter the mind is by:
a) Becoming a leader in an existing product/service category(This would need huge investments in terms of money, effort & time and so not a practical option for everyone)
or
b) Becoming the first entrant in any new product/service category. In other words, you need to create a new category that differentiates you from the rest of the…
