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> Very scary and very aggressive. I would not want to work for a company whose explicit strategy is locating other successful businesses, copying their model,

> Very scary and very aggressive. I would not want to work for a company whose explicit strategy is locating other successful businesses, copying their model, and leveraging economies of scale to undercut them. Wringing out margins also decreases innovation, lowers wages, and drives out all but the biggest players.

jacquesm 13y ago
This is because Bezos is going for the endgame from day 1 rather than to get stuck in the middle. It definitely is aggressive but it also is where things will end up eventually anyway so entering the game with that in mind is a definite strategy to avoid having someone else do that to you instead. Capitalism is brutal, just how brutal you can see in that quote.
- millstone 13y ago
  It's certainly a strategy, just not one that appeals to me, or (I imagine) to most of the readership of this site. Essentially Bezos is saying "your desire to make money is a weakness, and we're going to beat you by being cheaper than you." If you can wring out all profits, then no other players in the industry can afford to invest, which validates the strategy. Even employees become not an asset, but an obstacle to greater cheapness. Per Steve Yegge, Bezos reportedly said on multiple occasions that people should be paying him to work at Amazon. There's your endgame! Here's another brutal, but far more appealing strategy: "Your lack of vision, imagination, and agility is my opportunity." Execute it properly, and you revolutionize the industry instead of commoditizing it.
  - yen223 13y ago
    It appeals to people who like paying less for the same products, ie customers. At the end of the day, that's all that matters right?
  - argbargmcgarg 13y ago
    That statement is micro-econ 101 though. In a perfectly competitive market, no firm can have economic rents. A high margin implies a non-competitive firm or industry.
hef19898 13y ago
Only that all the bigger players are doing basically the same thing. Only difference being that the big players use the results to drive up their margins instead of lowering prices for customers. And most of innovation is payed for by cash instead of mergin anyway. I, for my part, like that strategy.

jacquesm 13y ago

This is because Bezos is going for the endgame from day 1 rather than to get stuck in the middle. It definitely is aggressive but it also is where things will end up eventually anyway so entering the game with that in mind is a definite strategy to avoid having someone else do that to you instead. Capitalism is brutal, just how brutal you can see in that quote.

millstone 13y ago
It's certainly a strategy, just not one that appeals to me, or (I imagine) to most of the readership of this site. Essentially Bezos is saying "your desire to make money is a weakness, and we're going to beat you by being cheaper than you." If you can wring out all profits, then no other players in the industry can afford to invest, which validates the strategy. Even employees become not an asset, but an obstacle to greater cheapness. Per Steve Yegge, Bezos reportedly said on multiple occasions that people should be paying him to work at Amazon. There's your endgame! Here's another brutal, but far more appealing strategy: "Your lack of vision, imagination, and agility is my opportunity." Execute it properly, and you revolutionize the industry instead of commoditizing it.
- yen223 13y ago
  It appeals to people who like paying less for the same products, ie customers. At the end of the day, that's all that matters right?
- argbargmcgarg 13y ago
  That statement is micro-econ 101 though. In a perfectly competitive market, no firm can have economic rents. A high margin implies a non-competitive firm or industry.

hef19898 13y ago

Only that all the bigger players are doing basically the same thing. Only difference being that the big players use the results to drive up their margins instead of lowering prices for customers. And most of innovation is payed for by cash instead of mergin anyway. I, for my part, like that strategy.