How to hold off Amazon and other apex predators
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“Is AI needed to cure this existential business crisis?” explores several approaches to the relatively common existential fear many executives have of being obliterated by an Internet apex predator.
The Wall Street Journal reported on 24 September 2019 that A ‘Grass Roots’ Campaign to Take Down Amazon Is Funded by Amazon’s Biggest Rivals. The article claims
Walmart, Oracle and mall owner Simon Property Group are secret funders behind a nonprofit that has been highly critical of the e-commerce giant.
The authors of the WSJ piece inadvertently checked off the first two of seven strategic alternatives I identified in an April 2019 post: three non-technology focused alternatives, three more technically demanding ones and one final fine-tuned business strategy:
- Government Intervention: Encourage apex predator regulation for anti-trust, privacy, and other reasons. Push for legislation to block platforms from offering their own products or “putting their thumb on the scale to benefit their own offerings.” There’s already a lot of activity of this type in Europe and its ramping up in the US.
- Buyer opposition: Inflame the passions of people everywhere who should be concerned about their personal privacy. Again, there’s a lot of this activity. Your business strategy might be to augment opposition with advertising, social media, and indirect pressure on various governments, perhaps in unison with others in your industry.
- Brand protection: Block sales of your premium brands via the apex predators (by itself, this could be suicidal; this strategy requires additional strategies like 6, Alliances.)
- Channel refinement: Attract customers to other less threatening channels, including your own. This requires technology investment, either solo or in a consortium (see Alliances.)
- Customer experience: Improve customer experience dealing with your firm. This honestly cuts across all business strategy alternatives, and like number 4 above, requires technology investment.
- Alliances: Create larger collections of firms to better counter-balance the apex internet predator’s strengths. Consider: All firms in a category (the equivalent of a “Diamond Market”); other affinity groups (geography, politics, social groups as in “Veterans Markets”); and the two main unattached technology wild cards, Apple (with Siri) and Microsoft (with Cortana) as potential partners. Smaller firms might also fit well here.
- Strategic business thinking: BestBuy’s approach is a good example, described in Amazon Almost Killed Best Buy. Then, Best Buy Did Something Completely Brilliant
To get a better feel for this issue, consider the following:
- Is AI needed to cure this existential business crisis?
- Is AI needed to cure this existential business crisis? (Part 2)
For a broader perspective, look at this as well: Overview: Seven of my recent AI-related blog posts
I’m looking for your comments:
- Are you facing an existential business threat?
- Does your CEO see the same threat and rate it the same way you do?
- How are you dealing with it?
Disclosure: The views and opinions in this analysis are my own and do not represent positions or opinions of The Analyst Syndicate. Read more on the Disclosure Policy.