Paavo Ritala, along with his colleagues at the ‘Lappeenranta University of Technology‘, has studied the numerous reasons behind the success of the online giant, Amazon. With a main focus on the ‘Amazon Japan‘ store which has become an increasingly big player within the business field of contradictions. Which btw. is not even available in English meaning that it is conquering the global market sphere. Well reported by the ‘Kachi‘ blog that is giving vital information from the Japanese e-commerce market and beyond. According to the researchers, the online store utilizes three different business models, which enable it to conduct profitable business with its competitors. In doing so, Amazon is able to maximise resources by sharing the operational costs with its competitors.
Amazon’s three business models that utilise competitor collaboration are outlined in Industrial Marketing Management, the international journal of marketing for industrial and high-tech firms. These three are Amazon Marketplace, Amazon Services and Amazon Web Services and lastly, Amazon Kindle. All of which are increasingly popular within the Japanese market of e-commerce.
Amazon Marketplace gives competitors the chance to use the Amazon.com & Amazon.co.jp (amongst others) online market place to make sales. Competitors are permitted to offer customers their goods at lower rates than Amazon’s own products, but Amazon takes a commission of each sale.
Amazon Services and Amazon Web Services in turn provide a platform and server space for competitors’ own web shops. For example, the now defunct, online bookshop Borders as well as the streaming giant Netflix have both used the Amazon Web Services platform for their online businesses. Increasingly Amazon.com makes money by hosting and developing these services for their competitors.
Amazon Kindle which is even popular in Japan, allows competitors to use a Kindle App on devices, enabling, for example, iPad users to download Kindle e-books without having to purchase the actual Kindle e-book reading device. Amazon is able to sell more content compatible with competitor platforms and thus retain more customers.
“Conducting business with competitors to such a large extent is very rare,” Ritala states in the LUT newsletter. “Amazon’s strategy is to be the world’s most customer oriented company, where others are far more competitor centred.”
This news are both, big in business prospects as well as an alarming business trend for the ‘Belgian Chocolate‘ study team. While we attempt to embrace and learn from good business models to use it for good, in this case the human design as it is often known as has been taken to such levels that the elimination of competitors has become a main thriving factor. Within any business in the world this should not be the case in order to create a thriving and healthy environment for society. What is especially surprising is that a country like Japan has become engaged in such an Americanised model of operations which is seeing a much big turn in the local mentality of doing business. The internet online shopping market has brought such huge responsibility and strain to the kind of us humans that we should be ever more diligent and give room for other companies to grow so that we can find a balance with mutual benefit.
We hope to bring the truth out in conjunction with heightened awareness in this urgent and troubling issue. Our sincere hope is that the Japanese nations takes action and looks at society structure balancing alternatives, such as Rakuten company.