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Amazon's Three Major Lines of Business

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  • Snyder, Edward A.
  • Canaday, Jason
  • Hughes, Marley

Abstract

Since its founding in 1995 Amazon has become a leader in eCommerce, cloud computing services, and interactive devices for individuals and homes. In this study, we document the critical steps in Amazon's development in each line of business. Our review yields insights on (i) how Amazon responded to changes in demand, (ii) the importance of economies of scale, economies of scope, and network effects in Amazon's efforts to build out its lines of business, and (iii) interrelationships among these three apparently distinct commercial operations. This case study thereby provides insights how Amazon's Firm Specific Advantages (FSAs) contributed to its successes within and across lines of business. Our analysis further suggests that Amazon developed Dynamic Capabilities (DCs) capabilities that contributed to Amazon's superior performance. Our analysis is, however, necessarily interim in nature. Given changing market and regulatory conditions, whether Amazon will be able to sustain its performance in which lines of business and in which countries is uncertain.

Suggested Citation

  • Snyder, Edward A. & Canaday, Jason & Hughes, Marley, 2022. "Amazon's Three Major Lines of Business," Working Papers 319, The University of Chicago Booth School of Business, George J. Stigler Center for the Study of the Economy and the State.
    • Handle: RePEc:zbw:cbscwp:319
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    File URL: https://www.econstor.eu/bitstream/10419/262721/1/wp319.pdf
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    entrepreneurship and business strategy; transaction cost economics; market entry; market power; dynamic capabilities; firm specific advantages;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • L7 - Industrial Organization - - Industry Studies: Primary Products and Construction
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics

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