case study on amazon company

Amazon Business Case Study [2024]: In-depth Analysis

How does an online book retailer become a behemoth dominating the global e-commerce industry? The 28-year-old history of Amazon’s growth is a masterclass in building a successful business strategy that has revolutionised the retail experience forever! The company has achieved eponymous status with a global presence and diversified business. No wonder its sales are expected to reach an astounding USD 746.22 billion with a valuation of USD 2 trillion in 2024! From being an online bookseller headquartered in a garage to becoming the second most valuable brand in the world , the saga of this global brand is a case study in all the leading business schools.  

So what is the secret behind the explosive success of Amazon? This article provides a comprehensive case study of Amazon and its winning business strategy. 

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Glimpsing Back: A Brief History of Amazon

With a small team, the budding company made headway in the book-selling market by offering a wide virtual selection of books compared to brick-and-mortar stores with doorstep delivery. With a user-friendly interface, easy-to-search engine, and focus on creating a ‘virtual community,’ the business grew by leaps and bounds. The emphasis on customer choice, experience, and convenience serves the company well even today. 

The name was aspirational with a nod to the largest river in the world- Bezos’ Amazon sought to be the largest e-commerce bookseller in the world. By July 1995, Amazon was marketing itself as the “Earth’s Biggest Bookstore,” selling over one million titles to all 50 states in the US and across 45 countries . It provided stiff competition to brick-and-mortar giants like Barnes and Noble and Borders. 

The company went public with its IPO in 1997 ; since then, there has been no looking back. Since its listing, the company has significantly diversified its offering by including music, electronics, toys, kitchen utensils, clothes, and more on its e-commerce site. From the Earth’s Biggest Bookstore, Amazon shifted its tagline to “Books, Music and More.” The company expanded to Germany and the United Kingdom by purchasing online bookstores, thus increasing its revenue. At its core, the company established a dynamic, efficient, and successful distribution and logistical model that helped capture a global market.

The year 1999 marked two critical moments for Amazon. First, the company patents the “1-Click” technology allowing users to purchase a product with one click. Second, it launches the 3rd party seller marketplace to allow third-party sellers to sell their produce through Amazon. These measures exponentially increased the sales on the platform. The company’s success put Bezos on the map as he received the prestigious accolade of the “Time’s Person of the Year” in 1999 at 35 years of age. 

The company survived the dot-com bubble burst and got only stronger. In 2003, the company took a momentous step by launching Amazon Web Services , a web-hosting business, that marked its arrival into the tech business. It provides cloud computing services to individual developers, companies, and governments through the platform’s IT infrastructure. The strategic shift from an e-commerce platform to a tech company was instrumental in Amazon’s diversification strategy and revenue generation. 

The company took further measures to develop brand loyalty through its Amazon Prime program in 2005. Prime membership has since expanded its services significantly and is one of the most valuable assets for the company today. It reshaped consumer expectations and experiences of shopping across the world. 

Amazon has been on a path of extensive acquisition and alliance . From the online shoe retailer Zappos to the robotics company Kiva Systems and the grocery delivery service Whole Foods- each acquisition captured pre-existing markets and distribution networks of the acquired assets. With every move, the company strategically entered new markets, removed competitive businesses by acquiring them, made distribution and logistics more efficient, and improved consumer experience. These moves catapulted the company to a 1 trillion dollar valuation in 2018. The company’s profits surged during the pandemic as Bezos’ hourly wealth increased by USD 11.7 million . The following year, Bezos stepped down as the CEO and found his replacement in Andy Jassy, the CEO of Amazon Web Services.

Now that we know the history of Amazon, its business strategy becomes easier to decipher. Before we unravel its key business strategies, let’s look at its many businesses. 

Amazon and its Diversified Business Model

A case study of Amazon is incomplete without an understanding of the many businesses that it has a foot in. Here are the diverse businesses that help Amazon generate revenues from multiple streams and have made it a leader in the global market. 

Online retail store

Amazon began as an online seller of books, and it continues its operations as an e-commerce site. Today the site offers a variety of products for the best prices to the consumer’s doorsteps. With an easy-to-use interface, easy return policy, “1-Click” buying, customer reviews, and suggestions, the e-commerce site knits an unrivalled retail experience. 

Amazon Marketplace

Amazon opened its platform to third-party sellers who could leverage its large customer base to sell products. It brings a diversity of products to the retailer without holding inventory. Amazon would, in turn, charge the sellers a percentage of their revenue as a commission fee. It is estimated that third-party sellers generate a gross merchandise value (GMV) of USD 300 billion for the platform.

Amazon Web Services (AWS)

Amazon’s cloud platform offers individual developers, start-ups, established businesses, and governments a range of cloud computing services through its IT infrastructure. It is the fastest-growing business segment for the brand clocking a global net revenue of USD 80.1 billion in 2022. 

Amazon Prime

Amazon’s member subscription service offers numerous membership benefits ranging from access to digital video and music streaming, audiobook and ebook platforms, free delivery, exclusive deals, Prime Day access, and much more. The company’s global net revenue from its subscription services stood at USD 35.22 billion in 2022. 

Amazon revealed in 2022 that the advertising wing of the company had generated a revenue of USD 31.2 billion the preceding year. The company offers custom advertising solutions to customers and campaign placements across multiple channels like Fire TV placements, Amazon physical stores, the brand’s homepage, and customised destination pages.

Physical stores

Amazon made an entry into the brick-and-mortar business with the establishment of a physical bookstore in Seattle in 2015. The company has since expanded its physical presence with Amazon Go, Amazon Fresh, Amazon Go Grocery, Whole Foods Market, and Amazon Style. It has sought to transform the real-world shopping experience with its “Just Walk Out Shopping’ experience. 

Breaking Down Amazon’s Business Strategy

Amazon’s business strategy has been innovative and forward-thinking from the get-go. Its path-breaking business model has inspired many but retains its uniqueness in execution. At its core, the company has maintained its customer-centric ethos, where its customers comprise three sets: retail customers, seller customers, and developer customers.   

For a comprehensive case study of Amazon , let’s take a closer look at the secret recipe behind its success.

Customer Obsession

The company proudly proclaims that it aims to be the “Earth’s most customer-centric company.” Since its inception, Amazon has won over the trust and loyalty of its customers by perfecting its marketing mix by offering “a comprehensive selection of products, low prices, fast and free delivery, easy-to-use functionality, and timely customer service.”   As Amazon’s customer base and usage expands exponentially, the company has worked towards optimising user experience through continuous assessment and feedback mechanisms.

Diversification

Amazon has kept up with the emerging demands of the market with growth potential in the long term. Its future-oriented vision has helped the company grow by leaps and bounds by venturing into new businesses that have added to its revenue streams. From cloud computing services to OTT services and subscription-based benefits, Amazon has reinvented what a diversified business looks like. 

Expansion through partnerships and acquisitions

Amazon has continually acquired and partnered with businesses to expand its customer base, enter new markets, diversify its product offerings, eliminate competition, and gain distribution and logistical networks. From IMDB and The Washington Post to Twitch and Pillpack, Amazon has bought companies across multiple categories to gain a foothold in their markets and operations. It has helped the company scale up its functions rapidly across the globe.

Technologically-driven innovations

Initially, Amazon was written off as it was started by “computer guys” who knew nothing about selling books. However, it was a focus on innovative technology that the company grew into a tech giant dominating the e-commerce space. Whether it is the 1-Click technology, SEO, user interface, cloud computing services, Just Walk Out technology, or its e-devices, the company has optimised customer experience by leveraging technology.

Data-based metrics

Amazon has consistently relied on metrics to assess, strategise, and grow its business. Data is an invaluable currency left behind with every click by the customer. The company has effectively and efficiently amassed these data into actionable insights to improve user experience, build and improve products and services, and develop successful marketing strategies. 

Marketing strategy

A comprehensive marketing strategy has been central to Amazon’s brand-building exercise. With the right marketing mix, the brand has become a household name. Its name and logo are recognisable anywhere in the world. A continual push to diversify its portfolio, competitive pricing policy, expanding its operations, and consistent promotions through multiple channels have been integral to achieving this global status. 

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Amazon, the second-most valuable company in the world, has been almost three decades in the making. Every step and misstep has been strategic and guided by the principles of: “customer obsession rather than competitor focus, passion for invention, commitment to operational excellence, and long-term thinking.” This case study of Amazon has sought to highlight its history, business model, and business strategies that have gone into the making of the behemoth. Ultimately, the company is a product of the management of Jeff Bezos and Amazon’s leadership. 

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Frequently Asked Questions (FAQs)

Jeff Bezos has held the position of Founder and CEO of the company. However, he inherited the position of the Executive Chairman of Amazon after resigning as the CEO of the company in 2021.

Amazon launched in India in June 2013. Initially starting its operations to serve Indians with books, films, TV shows and subscription-based services, the company further expanded its wings to become one of the leading shopping destinations for Indians.

The most important focal point of Amazon’s business strategy is its customers (retail customers, sellers, and developers) and building a customer-centric company.

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• Harvard Business School →
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• August 2015 (Revised June 2021)
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Amazon.com, 2021

• Format: Print
• | Language: English
• | Pages: 48

Related Work

• November 2017
• Faculty Research

Amazon.com, 2016

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Amazon Case Study – Tearing Down The Whole Business

Amazon runs a platform business model as a core model with several business units within . Some units, like Prime and the Advertising business, are highly tied to the e-commerce platform. For instance, Prime helps Amazon reward repeat customers, thus enhancing its platform business. Other units, like AWS , helped improve Amazon’s tech infrastructure.

Today Amazon is a tech giant who dominated the e-commerce business by offering a wide variety of products, at low cost, and with a delivery service propelled by its inventory management infrastructures, built over the years.

But, if Amazon is an extremely complex company, which can’t be easily labeled, how can we call its business model ?

Table of Contents

A platform business model at the core

Amazon business runs on top of a platform model (to understand what makes it a platform business read this ), built over the years, which takes advantage of network effects and flywheel effects .

At its core, Amazon has to keep attracting over and over billions of consumers across the globe on its platform and keep offering a broad variety of products.

As a two-sided platform , Amazon has also to keep its platform interesting to sellers, who are willing to showcase and sell their products directly on Amazon.

Indeed, over the years the company has experimented with many strategies, and among them, Amazon Prime and the seller services helped Amazon successfully transition toward a platform business.

While this platform business is the foundation of Amazon, what other key businesses exist today on top of that?

Amazon multi-layered business model

Let’s dive into the details of the different models used by Amazon for each of its segments and how some have a logic that ties them together.

For the sake of this analysis , we’ll look at four primary segments:

• Prime (media platform business)
• E-commerce : first-party, third-party, seller services (e-commerce/marketplace platform business)
• Advertising (media platform business)
• AWS (AI-ML platform business)

Those are all platforms business models, as they enjoy the network effects and scalability typical of a platform.

At the same time, they have different value propositions , customer segments, and resources to run successfully.

Prime media business in a nutshell

For instance, Prime is a media platform business running a subscription -based revenue generation, with recurring revenues.

Amazon Prime is a media and entertainment platform, yet its strategic business value goes way beyond that.

This platform targets content creators who have to be incentivized to feature their content on Amazon Prime.

While consumers are incentivized to join Amazon Prime to get movies, ebooks and free shipping on products that are fulfilled by Amazon .

Many see this program as an additional revenue stream that the company enjoys to enhance its revenues.

However, Amazon Prime is a program who has come up after many years of trial and errors by Amazon’s management to come up with ways to:

• reduce customers’ acquisition costs and facilitate repeat purchases : one of the major issues of building a digital platform (but also any other business) are customer acquisition costs and repeat purchases. A habitual Amazon customer buys many times a year. Therefore, shipping costs can easily eat up the convenience of buying on Amazon in the first place. How to prevent that? Cutting or removing those costs is the answer. While it’s hard to justify a membership program based solely on removing the cost of shipping. By offering a broad range of services (free ebooks, free movies and shows, and free shipping) all of a sudden you have an entertaining platform together with free shipping. Which makes the whole value proposition way more compelling.
• incentivize sellers to host their inventories with Amazon : so the company could guarantee fast delivery and lower prices, while also charging a service fee to those sellers. Also, by managing inventories of products from beginning to end. Those same sellers indeed can sell more as customers who have Amazon Prime might want to purchase as they won’t pay for shipping costs.
• make of Amazon a global consumer brand : digital platforms like Amazon have been extremely good at scaling up in a time when they had no resources compared to established brands. As Amazon scaled and consolidated its position in the market, it also started to invest more and more on its brand (in 2019 Amazon spent $11 billion in marketing ). In short, it moved from a solely practical value proposition (price and convenience) to culture-making by investing more and more on marketing and content to consolidate its global brand .

In short, the revenue stream generated by the model is the side effect of a program developed over the years to solve important issues of a business model that needed to keep providing more value to consumers as it scaled.

Advertising business in a nutshell

The advertising business is also a media business, which runs an attention-based revenue generation, which is performance-based (actions on the platforms like clicks, and impressions which get paid by advertisers).

To gain a bit of context, Amazon is among the largest players in the digital advertising business. This makes the platform more interesting to sellers who want to feature their products on top of Amazon listing or to leverage on Amazon transactional data to sell more.

Thus, the key player is the consumer and the ability of the platform to keep attracting billion of consumers across the world. The key customer is the seller willing to pay Amazon to get better placement and more visibility of its products.

E-commerce platform business in a nutshell

The e-commerce platform has within a first-party and third-party seller business.

The first-party comprises products with Amazon brand . Third-party products are those featured on Amazon but sold from outside stores.

Amazon also gives the option to those third-party sellers to manage their inventory directly within Amazon, from an additional fee on the products who are fulfilled directly by the company.

The e-commerce platform remains the foundation of the overall Amazon business and what makes Amazon among the most interesting companies in the world.

Amazon knows it well, and indeed, the whole Amazon flywheel starts from there. This is how a strategy for a complex platform can be simplified. As a platform, you might want to focus on a core stakeholder and transaction to make it scale.

It’s interesting to notice how the fact that Amazon was looking into a way to enable sellers to (thus transition toward a more scalable/ platform model) started with a random tinkering and turned into AWS.

AWS AI platform business in a nutshell

AWS is one of the Amazon massive experiment who turned into a successful business. Over the years, Amazon tested many ideas, also those ideas who were not just coming from customers’ requests , but by the vision of Amazon about what products could have passed the expectations of consumers.

AWS primarily sells computing, storage, database, and other services. Primarily a consumption-based service, Amazon AWS’s main stakeholders are developers, dev managers, ops managers, CIOs, chief digital officers, and chief information security officers.

Amazon AWS is also an AI-ML platform business whose success is the ability to attract developers to build ML tools in the cloud, which can be used by organizations and enterprises buying cloud services to scale their businesses with lower technological costs.

One example is Amazon SageMaker, a cloud machine-learning platform that makes it possible for developers to build those models, thus making the Amazon cloud services more attractive in the first place to enterprises buying cloud services.

Key takeaways from Amazon Case Study

Over the years Amazon has been able to build a complex multi-layered business model , based on several key partners , value propositions , infrastructures and revenue streams .

This is model is the fruit of a long-term vision , but not the result fo a pre-packaged design . Successful companies require tinkering and a lot of trial and error.

Many of those business units, over the years, might have grown as a side effect of figuring out a way to make Amazon a more scalable platform as it helped expand its product variety, convenience, thus align to its long-term vision in unpredictable ways:

Related business researches on Amazon

• Amazon Business Model
• What Is the Receivables Turnover Ratio? How Amazon Receivables Management Helps Its Explosive Growth
• Amazon Case Study: Why from Product to Subscription You Need to “Swallow the Fish”
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Successes and Failures of Amazon's Growth Strategies: Causes and Consequences

By: W. Chan Kim, Renee Mauborgne, Oh Young Koo

On 30 May 2017, Amazon shares traded at a record high - above $1,000 - surpassing the share price of Google parent Alphabet. Started as an online bookstore 22 years earlier, Amazon has achieved…

• Length: 27 page(s)
• Publication Date: Sep 25, 2017
• Discipline: Strategy
• Product #: IN1397-PDF-ENG

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On 30 May 2017, Amazon shares traded at a record high - above $1,000 - surpassing the share price of Google parent Alphabet. Started as an online bookstore 22 years earlier, Amazon has achieved uninterrupted growth by becoming the largest internet bookstore, the largest online marketplace, a media company, and the most successful IT service provider. Amazon recently expanded into the bricks-and-mortar retail business, launching Amazon Books across the US and beta-testing Amazon Go in Seattle. As of May 2017, Amazon was ranked the world's most innovative company and the fourth largest company by market capitalization. The case explores Amazon's path to growth and its successes and failures along the way. Successful strategic moves include Amazon Marketplace, Prime, Amazon Web Services, and Kindle. Failures included Auctions, A9 Search Engine, Endless, and the Fire Phone. Identifying commonalities and differences among them, the case shows the causes and consequences of Amazon's at-once stellar performance and severe setbacks. It applies Blue Ocean Strategy concepts to analyze its market-creating logic for future growth. The case comes with teaching note, a one-page summary and lectures slides. Teaching materials can be downloaded from https://www.blueoceanstrategy.com/teaching-materials/amazon/ The case is also available in Chinese and Korean.

Learning Objectives

The case aims to understand the root of a company's high performance and growth. A company, in this case study Amazon, makes a series of strategic moves in pursuit of growth. Some of them largely contributed to Amazon's growth and market dominance; some of them made Amazon to experience a serious setback. The case analyzes these strategic moves and finds out key commonalities and differences between the two, aiming to make the following learning points:

1) There is no perpetually excellent company - it can be brilliant at one moment and wrongheaded at another.

2) Amazon created a series of new markets by multi-faceted business offerings from online retailing to media and IT services. Those strategic moves opened and captured new market space instead of exploiting existing markets. By focusing on delivering meaningful value to buyers, Amazon made a significant leap in demand and achieved high growth. Furthermore, it eventually lowered the cost structure as a mass of buyers flocked and were locked-in by Amazon's unprecedented utility.

3) Amazon jumped into many attractive industries and leveraged its entrenched resources and capabilities to bring intense competition against incumbents. These strategic moves, anchored in red ocean traps, focused on offering higher value or lower cost than the rivals, but they were not necessarily bought in by customers.

4) Key difference between Amazon's success and failure can be found in the presence of value innovation. Amazon achieved high growth regardless of industry condition when they pioneered a new strategy that opened up a new value-cost frontier through a step change in the kind and degree of value offered, hence creating a new market and making competition irrelevant. By contrast, Amazon failed when it focused on delivering novelty technology without buyer value or simply exercised cost leadership in order to beat high-performing incumbents.

Sep 25, 2017 (Revised: Feb 20, 2022)

Discipline:

Geographies:

North America

Industries:

E-commerce industry

IN1397-PDF-ENG

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Table of Contents

The 4ps of amazon's marketing strategy, amazon marketing channel types, amazon's digital marketing strategy, become a digital marketer in 2022, amazon marketing strategy 2024: a case study.

Amazon is the largest online store in the world based on sales and market value. This online business has changed how people all over the world do business. Jeff Bezos started the company in Washington, USA on July 05, 1994. He was the CEO of the company till July 2021. Andy Jassy took over as the President and CEO of Amazon on July 05 2021. 

The first success for Amazon came along very quickly. It began as an online bookstore and kept adding to what it could do. In 1997, the company went public and is now on the NASDAQ in the US. Without help from the press, the company could sell books in 45 countries in less than two months. Amazon is now in more than 200 countries, and its website sells almost everything. Its subsidiaries include Audible, Twitch, IMDb, and Amazon Web Services.

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Amazon looks at the " marketing mix " of a company or brand, which comprises the 4Ps - 

Here is a comprehensive explanation of each factor's function.

Amazon used only to sell books online, but now it sells millions of different products in many categories. Shoes, jewelry, clothes, toys, home and kitchen appliances, electronics, books, the great outdoors, sports, car accessories, and works of art are some of the most popular products. Amazon sells goods from small businesses and shops but promotes its brand , Amazon Basics.

A company can price its products in several different ways. Here are some to remember: 

• Cost-plus pricing 
• Value pricing 
• Competitor pricing 
• Price discrimination

Amazon often uses a pricing strategy called "competitive pricing," in which it looks at the prices of its competitors and bases its prices on those. It helps keep costs low and gives customers a lot of choices.

Amazon also uses the following methods to set prices:

• Promotional pricing
• Behavioral pricing

Amazon can change its products daily because of how it runs its business. This is its best feature, making it hard for other companies to compete with Amazon.

Amazon's online store has grown over the past few years in many parts of the world. Millions of products are now more accessible to customers worldwide to get. Even if you live in a remote part of the world, you can get packages quickly from Amazon. Part of the company's success comes from the fact that it ships fast and has fulfillment hubs.

4. Promotion

When it comes to marketing, Amazon knows how important communication is. It uses a lot of different kinds of advertising to reach people who might buy or use its products. Amazon has a lot of sales and discounts, which is a great way to build its brand. It has regular ads on websites, newspapers, TV, billboards, and social media , among other places. There are also affiliate sites that work with Amazon.

Also Read - What are the 7 Ps of Marketing? Read this article and find out! 

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PPC advertising on Amazon can be put into three groups:

1. Headline Search Ads

If you want to get your brand out there, it's best to use headline search ads. Amazon now has two ways to promote brands, especially during the holiday season:

• Headline Search Ads
• Amazon Stores

Title and Amazon Stores Together, Search Ads can help people know more about your brand and the products you sell. It also builds trust with customers and makes sure that your products are shown in the right way.

By combining Headline Search Ads, Amazon Stores, and Sponsored Products into a single Pay-Per-Click (PPC) marketing campaign, you can easily reach many shoppers in less time.

2. Product Display Ads

Another type of effective PPC ad is a "Product Display Ad," which is placed next to the product or in the "similar items" section on the product page. This kind of ad is only meant to be self-service. It is linked to the ASINs of the products, which gives sellers many options for focusing on different types of customers based on how they act.

3. Sponsored Product Ads

One of the best ways to get more people to see and buy your product is to pay for an advertisement. Sponsored product ads appear on the top when you search for something on Amazon.

Amazon's digital marketing strategy is comprehensive, and they reach the customers through digital marketing. Today, everyone uses social media. Amazon advertises its products on social media, taking advantage of those who use those sites and sending them to their product pages to help them sell more. It has teamed up with several big and small influencers in the country to reach its audience more effectively. It uses Twitter, Instagram, YouTube, Pinterest, and Facebook.

Amazon on Facebook

There are 10 million people who follow Amazon India on Facebook . It primarily uses Facebook to share company news and advertising. It uses strong advertising to get the word out about its Sale Days. It also stays up-to-date by publishing posts on different topics.

Amazon on Instagram

Interviews with artists from different backgrounds and key advertising are the main parts of Amazon's Instagram marketing plan. It has more than 2.8 million Instagram followers. The company's strategies for Instagram and Facebook are very similar, except that it doesn't post updates about company news on either platform. Both platforms have posts from the company that are very similar. 

Amazon on Twitter

Amazon India has a different plan for getting new customers through Twitter. It stays in touch with its followers, using a wide range of content, holding contests to get new customers, and following and creating trends. It is one of the biggest in its field, with two million Twitter followers. Twitter content makes it sound less like advertising and more like personal recommendations. 

Amazon on YouTube

The best thing about Amazon's YouTube ads is that they immediately grab people's attention. Amazon makes sure that its ads are always interesting and valuable. Most of the time, it does this by trying to make the customer feel special. 

Amazon on Pinterest

More than a million people follow Amazon on Pinterest. They use Pinterest to promote their products based on a wide range of themes to grab people's attention.

The way Amazon uses digital marketing is unparalleled. To stay competitive, they should keep making more exciting content and putting it out in the best way possible. Amazon Marketing Strategy gets updated periodically to stay ahead of the curve. Competing in the retail industry is complex, and Amazon's marketing strategy has helped the company stay ahead of the competition.

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Case Study: Should a Direct-to-Consumer Company Start Selling on Amazon?

• Thales S. Teixeira

An e-bike maker weighs the trade-offs.

Sitting in his office, Mark Ellinas frowned at his computer screen. It was filled with row after row of electric bikes, from expensive models to cheap knockoffs that seemed held together by spit and a prayer. Though they varied in style and price, the bikes did have one thing in common: where they were being sold. The website he was looking at, flush with options, was Amazon.

• TT Thales  S. Teixeira  is the co-founder of Decoupling.co, a digital disruption and transformation consulting firm. He is the author of  Unlocking the Customer Value Chain: How Decoupling Drives Consumer Disruption  and a panel judge in CNBC’s Disruptor 50 annual startup competition. Previously he was a professor at Harvard Business School for ten years and now teaches at the University of California.

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Amazon.com, Inc.: a case study analysis

This paper is a case study analysis of Amazon.com, Inc. (Amazon). In this paper, I look at the business strategy of Amazon. Special attention is given to five parts, including a historical overview, organizational structure, business operations, financial performance, and the future outlook of Amazon. The historical overview chronologically describes landmark events of Amazons beginnings to their current position today. The companies departmental structure is categorized and briefly commented on in section two. An analysis is provided for Amazons operations with a breakdown of major products and services offered. A comprehensive financial analysis of Amazon follows (section four) with matching insight that links performance to events and business strategies. The future outlook of Amazon is discussed last, offering a topical overview of where Amazons business interest is shifting.

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Amazon Change Management Case Study

Change is an essential component of any successful organization, and in today’s rapidly evolving business environment, the ability to manage change effectively is more critical than ever. 

One company that has demonstrated exceptional change management skills is Amazon, which has undergone numerous transformations in its nearly three decades of operation. 

From its early days as an online bookseller to its current status as a global technology and retail giant, Amazon has had to adapt to changing market conditions and customer demands. 

In this blog post, we will examine Amazon’s change management practices and explore a case study of the company’s acquisition of Whole Foods to understand how Amazon manages change on a large scale. 

By analyzing Amazon’s change management strategies, we hope to provide insights that can help other organizations navigate change and remain competitive in today’s dynamic business environment.

Overview of Amazon History and Growth 

Amazon was founded in 1994 by Jeff Bezos as an online bookstore in Seattle, Washington. Initially, the company operated out of Bezos’ garage and was primarily focused on selling books online. However, Amazon quickly expanded its offerings to include a wide range of products, including electronics, toys, clothing, and more.

In 1997, Amazon went public, and by the end of the year, it had grown to serve customers in all 50 US states and more than 160 countries. Throughout the 2000s, Amazon continued to expand its business, launching new services like Amazon Web Services (AWS) in 2006 and the Amazon Kindle e-reader in 2007.

By 2010, Amazon had become the world’s largest online retailer, offering millions of products to customers around the world. In recent years, Amazon has continued to grow and diversify its business, expanding into new markets like groceries, healthcare, and entertainment. Today, Amazon is one of the largest companies in the world, with a market capitalization of over $1.5 trillion and a workforce of more than 1.3 million employees.

Need of Change Management at Amazon 

As Amazon has grown and evolved over the years, the need for effective change management has become increasingly important. Amazon operates in a fast-paced, rapidly changing industry, and the company must continually adapt to new technologies, shifting customer needs, and changing market conditions. Without effective change management, Amazon could struggle to keep pace with these changes and risk falling behind competitors.

Additionally, Amazon’s size and scale can make change management particularly challenging. With more than 1.3 million employees and operations in numerous countries around the world, implementing changes across the organization can be complex and time-consuming. Effective change management processes are essential to ensure that changes are communicated clearly and effectively to all stakeholders, and that the changes are implemented in a way that minimizes disruption to the business.

Overall, the need for change management at Amazon is driven by the company’s growth and the fast-paced, ever-changing nature of the business environment in which it operates. By effectively managing change, Amazon can continue to stay ahead of the curve and remain a leader in the global marketplace.

Amazon’s Acquisition of Whole Food

In 2017, Amazon announced its acquisition of Whole Foods, a high-end grocery store chain known for its focus on organic and locally-sourced products. The $13.7 billion acquisition marked Amazon’s entry into the grocery market, a move that was seen as a potential game-changer in the industry.

The acquisition was met with mixed reactions from investors, analysts, and industry experts. Some saw the move as a smart strategic play that would give Amazon a foothold in the lucrative grocery market, while others were skeptical of the challenges that Amazon would face in managing a physical retail operation.

Despite the challenges, Amazon moved forward with the acquisition, and in August 2017, the deal was completed. Amazon quickly began to integrate Whole Foods into its business operations, including implementing changes to the store’s pricing, product offerings, and supply chain. The acquisition also paved the way for new innovations in the grocery industry, such as the launch of Amazon Go, a cashierless convenience store that uses AI and computer vision technology to track purchases.

Analysis of change management process used by Amazon 

Amazon’s change management process during the acquisition of Whole Foods was thorough, well-planned, and executed effectively. By emphasizing communication, training, cultural integration, and flexibility, Amazon was able to successfully integrate Whole Foods into its business and begin to innovate in the grocery industry.

1. Planning: Amazon spent a significant amount of time planning for the acquisition and identifying the key changes that would need to be made to integrate Whole Foods into its business. This included identifying potential synergies, determining how to integrate supply chains and pricing strategies, and assessing the impact of the acquisition on employees and customers.

2. Communication: Effective communication was a critical component of the change management process. Amazon made a concerted effort to communicate the changes to all stakeholders, including employees, customers, and investors. The company emphasized its commitment to maintaining Whole Foods’ brand identity and values, while also highlighting the potential benefits of the acquisition for customers and employees.

3. Training and education: To ensure that employees were prepared for the changes, Amazon provided extensive training and education programs to Whole Foods employees. This included training on new technology, changes to store operations, and other aspects of the integration process.

4. Flexibility and agility: Amazon was able to be flexible and agile in its approach to the change management process. The company made adjustments as needed, based on feedback from employees and customers, and was willing to pivot its strategies when necessary

5. Cultural integration: Amazon recognized the importance of cultural integration in the change management process. The company worked to integrate the cultures of the two organizations and to ensure that Whole Foods employees felt valued and supported during the transition.

Success of change management process 

The change management process used by Amazon during the acquisition of Whole Foods was largely successful. The following are some indicators of the success of the change management process:

1. Smooth integration: Amazon was able to integrate Whole Foods into its business smoothly and quickly, with minimal disruptions to store operations or customer experience. The company was able to implement changes to pricing, supply chain, and product offerings without significant negative impacts.

2. Employee satisfaction : Amazon prioritized the needs and concerns of Whole Foods employees during the integration process, providing extensive training and education, and working to integrate the cultures of the two organizations. This approach contributed to high levels of employee satisfaction and engagement, and helped to maintain employee loyalty to the Whole Foods brand.

3. Innovation: The acquisition of Whole Foods paved the way for new innovations in the grocery industry, such as the launch of Amazon Go and the expansion of Amazon Fresh. These innovations have helped to position Amazon as a major player in the grocery market and have contributed to the company’s overall growth.

4. Financial success: The acquisition of Whole Foods has been a financial success for Amazon, with the company seeing significant growth in its grocery business in the years since the acquisition. This financial success is a strong indicator of the effectiveness of the change management process.

These indicators suggest that Amazon’s change management process was effective in managing the challenges of integrating a large and complex organization into its business and positioning the company for continued growth in the grocery industry

Final Words  

The success of Amazon’s change management process during the acquisition of Whole Foods highlights the importance of effective change management in modern business. With technology and the competitive landscape changing rapidly, businesses must be able to adapt quickly to stay relevant and competitive. Effective change management is essential for ensuring that organizations can manage the challenges of change and position themselves for success in a rapidly changing business environment.

Amazon’s acquisition of Whole Foods serves as a valuable case study on the importance of effective change management in modern business. By emphasizing planning, communication, training, cultural integration, and flexibility, Amazon was able to successfully integrate Whole Foods into its business and position itself for continued growth in the grocery industry. The lessons learned from this case study can serve as a valuable guide for future change management efforts in both Amazon and other organizations.

About The Author

Tahir Abbas

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Case Study: Strategizing at Amazon When Globalization Comes Under Pressure

• First Online: 10 September 2019

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• Jeremy Ghez 2  

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Amazon’s success depends on the access it enjoys to a single and global market. While this has been true for now, the firm’s CEO wonders whether he and others have taken globalization for granted. The case reviews the evidence and discusses the extent to which globalization could go into reverse mode. It then explores the options a firm like Amazon would have to hedge against this risk. The case has several implications for architects of change. In particular, it shows how important it is for them to consider what they are taking for granted and how much they depend on it. It also shows the importance for actors looking for impact of remaining nimble in a turbulent business environment.

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“The Steam Has Gone out of Globalisation,” The Economist , January 24, 2019, https://www.economist.com/leaders/2019/01/24/the-steam-has-gone-out-of-globalisation .

Martin Sandbu, “Three Reasons Why Globalisation Will Survive Protectionist Rebellions,” Financial Times , March 9, 2017, https://www.ft.com/content/1a4e31ce-0333-11e7-aa5b-6bb07f5c8e12 .

Martin Wolf, “Donald Trump Faces the Reality of World Trade,” Financial Times , November 22, 2016, https://www.ft.com/content/064d51b0-aff4-11e6-9c37-5787335499a0 .

See Wolf; Wen Wang, “Emerging Markets Are Set to Lead Globalisation,” Financial Times , April 10, 2017, https://www.ft.com/content/f60d77a4-1ded-11e7-b7d3-163f5a7f229c .

“Globalisation Has Faltered,” The Economist , January 24, 2019, https://www.economist.com/briefing/2019/01/24/globalisation-has-faltered?fsrc=scn/tw/te/rfd/pe .

Ralf Dreischmeier, Karalee Close, and Philippe Trichet, “The Digital Imperative,” The Boston Consulting Group (blog), March 2, 2015, https://www.bcg.com/publications/2015/digital-imperative.aspx .

Jeff Desjardins, “This Is What Happens in an Internet Minute in 2018,” World Economic Forum (blog), May 16, 2018, https://www.weforum.org/agenda/2018/05/what-happens-in-an-internet-minute-in-2018/ .

New York Times journalist Tom Friedman called this the Dell Theory of Conflict Prevention which he stated this way: “No two countries that are both part of a major global supply chain, like Dell’s, will ever fight a war against each other as long as they are both part of the same global supply chain.”

Niall Ferguson, The Ascent of Money: A Financial History of the World , 1 edition (New York London: Penguin Books, 2009).

Graham Allison, “The Thucydides Trap: Are the U.S. and China Headed for War?,” The Atlantic , September 24, 2015, http://www.theatlantic.com/international/archive/2015/09/united-states-china-war-thucydides-trap/406756/ .

“Why Is World Trade Growth Slowing?,” The Economist , October 12, 2016, http://www.economist.com/blogs/economist-explains/2016/10/economist-explains-5 .

Shawn Donnan, “Global Trade Slowdown Worse than Thought,” Financial Times , July 13, 2016, https://www.ft.com/content/97a10864-490b-11e6-8d68-72e9211e86ab .

World Trade Organization, “WTO Downgrades Outlook for Global Trade as Risks Accumulate,” September 27, 2018, https://www.wto.org/english/news_e/pres18_e/pr822_e.htm .

International Monetary Fund, “Global Trade: What’s Behind the Slowdown,” in World Economic Outlook , 2016, 63–87, http://www.imf.org/external/pubs/ft/weo/2016/02/ .

Greg Ip, “Can Globalization Be Salvaged?,” Wall Street Journal , November 2, 2016, sec. Economy, http://www.wsj.com/articles/can-globalization-be-salvaged-1478102789 .

See for instance Claire Jones, “G7 Signs off on Watered-down Free Trade Pledge,” Financial Times , May 13, 2017, https://www.ft.com/content/6cdbdba6-37c9-11e7-821a-6027b8a20f23; Claire Jones and Sam Fleming, “G20 Drops Vow to Resist All Forms of Protectionism,” Financial Times , March 18, 2017, https://www.ft.com/content/241cdf2a-0be9-11e7-a88c-50ba212dce4d .

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Allison, “The Thucydides Trap.”

“Globalisation Has Faltered.”

You can find a summary of the debate here: Lorenzo Bini Smaghi, “How Far Will the Pendulum Swing against Globalisation?,” Financial Times (blog), November 15, 2016, https://www.ft.com/content/0c777dda-bed4-326e-b130-2ab08079e5a9 .

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Dani Rodrik, “There Is No Need to Fret about Deglobalisation,” Financial Times , October 4, 2016, https://www.ft.com/content/d9a28a08-895c-11e6-8cb7-e7ada1d123b1 .

Kim Hart, “Dave McClure’s Investment Strategy for the Trump Era,” Axios , March 16, 2017, https://www.axios.com/dave-mcclures-investment-strategy-for-the-trump-era-2316191240.html .

Gilles Sengès, “Carlos Diaz: «Le Mur de Trump, C’est La Silicon Valley Qui L’a Construit»,” L’Opinion , November 13, 2016, http://www.lopinion.fr/edition/international/carlos-diaz-mur-trump-c-est-silicon-valley-qui-l-a-construit-114167 .

“The Steam Has Gone out of Globalisation.”

Laura Stevens and Sarah Nassauer, “Amazon Fights Wal-Mart for Low-Income Shoppers,” Wall Street Journal , June 6, 2017, https://www.wsj.com/articles/amazon-fights-wal-mart-for-low-income-shoppers-1496732400 .

Louise Lucas, “Alibaba Kicks off Ambitious Plan for Frontier-Free Global Trade,” Financial Times , March 22, 2017, https://www.ft.com/content/590d815a-0ec6-11e7-a88c-50ba212dce4d .

Elizabeth Weise, “Alibaba Launches Program to Help 1 Million U.S. Businesses Sell to China,” USA Today , April 25, 2017, https://www.usatoday.com/story/tech/news/2017/04/25/alibaba-launches-program-help-1-million-us-businesses-sell-china/100827290/ .

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Inside the Brutal Business Practices of Amazon—And How It Became “Too Toxic to Touch”

By Jack McCordick

In May of 2020, seven members of the House Judiciary Antitrust Subcommittee penned a letter to then CEO of Amazon Jeff Bezos. “On April 23,” their message began, The Wall Street Journal “reported that Amazon employees used sensitive business information from third-party sellers on its platform to develop competing products.” The article contradicted previous sworn testimony from the company’s general counsel, possibly rendering the testimony “false or perjurious,” the seven congressional leaders wrote.

The Journal ’s exposé, which ultimately spurred Bezos’s first-ever congressional testimony, was written by Dana Mattioli as part of the paper’s wide-ranging investigation into Amazon’s business practices. At the time, Mattioli, a longtime business reporter, had recently moved into the Amazon beat, her interest piqued by the corporation’s tentacular infiltration of nearly every aspect of American economic life. Now, four years later, she’s out with The Everything War , a new book-length examination of Amazon that explores everything from its rise to power to its lobbying efforts and the brewing backlash against it.

In this interview with Vanity Fair, edited for length and clarity, Mattioli and I spoke about the challenges of reporting on an infamously secretive and combative company, Amazon’s forays into political-influence peddling, its new foe in the Biden administration, and which candidate she thinks Amazon execs want to see back in the White House come January 2025.

Vanity Fair: What first got you interested in covering Amazon?

Dana Mattioli: I was The Wall Street Journal ’s mergers-and-acquisitions reporter for six years, and in that role, my job was to cover which companies are buying other companies across industries globally. Something fascinating happened during my tenure in that role. It wasn’t just retail companies that were nervous about Amazon. I’d speak to the bankers, the lawyers, the CEOs, the board members at different companies, and they started talking about how they were worried about Amazon invading their industry. Over the course of those six years, those questions got louder. It started bleeding into other sectors where you wouldn’t even really think about Amazon at the time. The company seemed to stretch into every vertical and its tentacles kept spreading. It occurred to me that this was the most interesting company, but also one of the most secretive companies in business history. That to me seemed like such a fun challenge to dig in and see what was going on behind the scenes.

What are the sorts of challenges reporters covering the company face?

I would say that, as it relates to me, they didn’t provide access, but that doesn't mean I didn’t get access. I spoke to 17 S-team members—the most senior people at the company—for this book, without the company knowing. I spoke to hundreds of people in and around the company. I had hundreds of pages of internal documents. They didn’t really cooperate for the book in setting up interviews, and I understand why. Some of my investigations at the Journal had been very hard-hitting. One of them was the basis for Jeff Bezos’s being called to testify to Congress for the first time in his career. So they didn't participate on an official basis, but I of course did a full fact-check. Out of fairness, I incorporate their PR statements and rebuttals very generously throughout. But it is an interesting company from a PR standpoint. There was an investigation from Mother Jones about the company bullying reporters, how they have lied to reporters in the past, and how that makes things difficult for reporters trying to cover the company. And that investigation questions whether that’s a tactic to get people to back off and not even want to cover them in the first place.

What do you think it is about Amazon’s internal culture that made so many employees willing to talk to you?

Amazon is the most interesting company culture and the most aggressive one I’ve ever covered. It’s a giant company. More than a million people work there. The turnover and the burnout is much higher than at most other companies. People tend not to last, because it’s very aggressive and it can be bruising. As a result of that, a lot of people have come to me—both people still there and people that have left—to tell me their experiences.

When I delve into what goes on behind the scenes and the anticompetitive business behaviors that make Amazon win so often, a lot of it is the product of this culture. A lot of the shocking behaviors are because of this company’s culture. If you’re auditioning for your job every day, and you’re auditioning against every other brilliant employee there, and you know that at the end of the year, 6% of you are going to get cut no matter what, and at the same time, you have access to unrivaled data on partners, sellers, and competitors, you might be tempted to look at that data to get an edge and keep your job and get to your restricted stock units. If you’re at [Amazon] and you’re meeting with [outside companies] on the dealmaking side or the Alexa venture capital side, you might be tempted to not forget what you learned in those meetings and use it on a product to have a home run.

By Karen Valby

By Kase Wickman

By Bess Levin

There’s a moment in the book where you describe the company’s business practices as liable to “shift from facilitator or partner to mobster” in “the blink of an eye.” Can you say a bit more about what is Mob-like about the way Amazon conducts business?

They’re one of the most dominant companies across industries. Retail, cloud computing, digital advertising, smart devices—you name it. It’s this giant conglomerate with a staggering number of industries in which it’s the number one, two, or three player. That creates this dynamic where sellers are beholden to them, partners are beholden to them, and even competitors have to work with them. If you are on Amazon in some way, as a seller or even a competitor, you need to use them. Amazon has the leverage to say, “Well, if you don’t want to do things on our terms, then no more access.” We also uncover that Amazon threatened some partners or rivals with predatory pricing. Under the battle cry of being customer-obsessed, they sold customers dangerous goods, like carbon monoxide alarms that don’t detect carbon monoxide, or fake tourniquets. They touted all the good that they do for small businesses in order to rehab their image while crushing many of them.

Let’s talk a bit about Amazon’s PR efforts. The company wasn’t always as invested in burnishing its public image as it is today. When did that start?

Amazon was sort of late to realize how big they were. It’s like 2013, their market cap is over hundreds of billions of dollars, people are starting to cry foul about their behavior, their tactics with book publishers and everything else, but they still think that they’re this scrappy start-up, which is totally not the case. At that point, they’re not really investing in lobbying. They don’t really have a great government relations system set up. The board starts to tell Jeff, “We got to start taking this seriously.” Bezos was really disinterested in DC. In 2015, they brought in someone everyone thought would be a heavy hitter: Jay Carney. He was Barack Obama ’s press secretary, and was also very close to then vice president Joe Biden. They bring him on to head up government relations and public relations for the firm. The company really bulks up its forces: thousands of people on government relations and public relations. The team grows really massively, and so does their spending. They start spending like a company of their size. Today, they’re one of the top companies by lobbying spending in the country.

And what sort of narrative do they seize on?

That team focuses on a narrative that they’re doing so much good for small businesses. They start putting out this small-business impact report, where it talks about all the ancillary jobs they’re creating through their sellers and whatnot. But behind the scenes, their business tactics were hurting those very sellers. The very people they were quite literally parading around on Capitol Hill to say, “Look how many jobs we’re creating in your backyard. Mr. Senator,” behind the scenes felt like they were stuck on this hamster wheel, where every year they’re making less and less money on Amazon, where the company could just extort them for fees, and it was becoming less viable.

There’s a pattern that plays out time and time again—more than I could even fit in this book; I had to really be choosy with examples—where entrepreneurs would go to Amazon in good faith. Since Amazon’s one of the top players in so many areas, if you’re selling your company, or if you’re looking for fundraising, you sort of have to talk to them. These entrepreneurs would open the kimono and reveal all of their road maps, financials, give them access to what their patents look like, all under the guise of maybe getting an investment or an acquisition. And then they’d get ghosted, and Amazon would turn around with a very similar product. There are a lot of those contradictions throughout the book as Amazon is trying to create this narrative around small businesses.

One thing that stuck out to me is that even as the company plowed so much more money into PR and lobbying efforts in Washington, its executives kept embarrassing themselves publicly and putting their feet in their mouths. What do you make of that?

I’m glad you picked up on that, because it was really funny to me. The DC team that they hired knew Capitol Hill. They knew how things get done in Washington, DC, where it’s not scorched earth. These were people who came from other parts of government to join Amazon’s lobbying effort, and they were doing something called “watering the flowers,” which refers to making friends on the Hill so that people would be receptive to your talking points. But back in Seattle, where Jeff Bezos was not at all interested in politics and meeting with different legislators, there was a much more pugnacious temperament toward DC and government and any sort of criticism. Their snap reaction to a lot of criticism is to fight back, or “punch back,” as Bezos would tell his team.

So on the one hand, the DC team is walking around the Hill, taking meetings with all these different legislators like Elizabeth Warren. And then Jeff Bezos and his team of top executives are writing nasty tweets at them and undercutting all their efforts to build those relationships. There’s a really fun scene in the book where it’s Jeff and his top deputies—it’s the middle COVID, so they’re not in the same room, but they’re all on a conference call—ginning up nasty tweets to active legislators who could be determining their fate. Stuff like that played out all the time. This aggressive culture, this drive to win at all costs, went beyond their business practices. It pervaded the entire culture of the company, including the way it handled PR and government relations.

The book opens with what one of your sources calls “the most important law review article written in our lifetimes.” What was the article, who wrote it, and why is it so important?

In 2017, a law school student at Yale named Lina Khan wrote a law review article called “Amazon’s Antitrust Paradox.” She was an unknown person at this time. The article makes the claim that Amazon is a monopoly, and that the change in the way that antitrust has been enforced in the last few decades means that companies like Amazon are not being regulated nearly the way they should be and that it’s creating monopolies. This law review article does something remarkable. These things are usually not widely read, but it goes viral. Politicians read it. Heads of corporate development and legal counsels at big companies read it. Reporters read it. It really raises her profile, and people start questioning Amazon’s power.

Khan’s law review note was published right as Trump was being inaugurated. Can you talk a bit about how the company responded to Trump?

It’s just so fascinating. They were not at all prepared for a Trump win. They were in shock. This was really bad news for the company, because even before he was nominated, Trump is saying, “I’m going to break this company up. They’re a monopoly. They don’t pay their taxes.” And that animosity just persists and gets louder throughout his four years in the White House. There’s a series of nasty tweets about the company. Behind the scenes, his billionaire friends are in his ear saying, like, “You’ve got to do something about them. They’re ruining the economy.” There’s a scoop in the book where Nelson Peltz of Trian, an investment company, has a white paper written that gets to President Trump’s inner circle about Jeff Bezos and Amazon being this unheard-of monopoly that needs to be stopped. So that’s going on behind the scenes. But there’s also this personal animus that cannot be understated. I spoke to a lot of Trump’s top aides, and they said that this stemmed from him just being jealous of Bezos. He is jealous of people with more wealth than him. This is a constant bête noire for him.

What’s fascinating to me is that this happens not very long after Jay Carney is brought on to head up government relations. He essentially sits out for the four years of the Trump White House. He determined that it was too far afield from his politics to engage with. By the time that Biden is elected president, which Amazon was really excited about, Carney was excited since these were his people in the White House. They think things are going to change. But it gets arguably worse from there. There’s actual teeth to the policies that the Biden administration puts forward.

It’s true—you have some great moments in the book when Carney is texting Biden chief of staff Ron Klain, his old friend, and getting the cold shoulder. Looking ahead to November, from a purely business perspective, who do you think Amazon execs hope wins the election?

It’s really tough to say. I don’t think it’s a great outcome for them either way, to be honest. The Trump years had a lot of rhetoric, but not much teeth. Although I did speak to Trump’s director of the White House National Trade Council, Peter Navarro, and I asked him, “If you guys were so worried about Amazon, why didn’t you do anything?” And he said, “Oh, we would have gone after them in a second term.” Who knows? Whereas for the Biden White House, they placed Amazon’s biggest foe—Lina Khan—at the head of the Federal Trade Commission, the agency regulating them. Biden has backed this antitrust reform movement. He’s aligned with Lina Khan on antitrust and Jonathan Kanter at the DOJ. He said he’s the most pro-union president in American history, and Amazon is notoriously anti-union. And he’s embraced their enemies like Chris Smalls and Walmart’s CEO. There’s a scene in the book where Amazon learns that the Biden presidency just views Jeff Bezos and Amazon as too toxic to touch. They’re getting shunned from the White House, essentially. So I don’t know if that’s great for them, either.

The book ends with some of the legal and legislative efforts to chip away against Amazon’s power, including the recent lawsuit brought against the company by Khan’s FTC. How would you evaluate the strength of the emerging antitrust movement in Washington?

Lina Khan has a lot of momentum behind her. There are even Republicans that are on her side when it comes to antitrust reform. But ultimately you need the courts to side with you, and they’ve had some big losses. So it’s really hard to know where this will end up. When I speak to antitrust experts, they also point out that even if she were to be successful and the FTC breaks up Amazon, is it too late? Do you run into a Standard Oil–type problem, where the Supreme Court breaks up Standard Oil in 1911 into 30-something pieces, and those pieces become market leaders in their own right, and they become the predominant force, and the value of those separate pieces is actually greater than when they were all together? It’s really hard to tell where this nets out.

Update: An Amazon spokesperson provided Vanity Fair with the following response to Mattioli's book: “Amazon’s success is the result of continually innovating for consumers and small businesses over three decades to make their lives better and easier every day. The facts show Amazon has made shopping easier and more convenient for customers, spurred lower prices, enabled millions of successful small businesses, and significantly increased competition in retail.”

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Prime energy, sports drinks contain PFAS and excessive caffeine, class action suits say

YouTubers Logan Paul and KSI founded Prime Hydration in 2022, and while their products have become increasingly popular and profitable, the company continues to face class action suits over the ingredients in their energy and sports drinks.

Prime Hyrdation LLC was sued April 8 in the Southern District of New York over "misleading and deceptive practices" regarding the company's 12-ounce energy drinks containing between 215-225 milligrams of caffeine as opposed to the advertised 200 milligrams, according to the class action suit.

Lara Vera, a Poughkeepsie, New York resident, filed the suit in federal court on behalf of herself and others who bought Prime products across the U.S., the complaint says. Vera purchased Prime's Blue Raspberry products several times in August 2022 for about $3 to $4 each, but she would have never bought the drinks if she had known the actual caffeine content, according to the suit.

Vera's suit is seeking $5 million from the company owned by Paul and KSI, real name Olajide Olayinka Williams "JJ" Olatunji, court records show.

Court records do not say whether Prime Hydration retained legal counsel for Vera's suit.

How much caffeine is in Prime energy drinks?

Prime's advertised 200 milligrams of caffeine is equivalent to "half a dozen Coke cans or nearly two (12-ounce) Red Bulls," Vera's class action suit says.

A 12-ounce can of Red Bull energy drink contains 114 milligrams of caffeine, and a cup of coffee contains around 100 milligrams of caffeine, according to the suit.

The suit continues to say that "there is no proven safe dose of caffeine for children." Side effects of kids consuming caffeine could include rapid or irregular heartbeats, headaches, seizures, shaking, upset stomach and adverse emotional effects on mental health, according to the complaint.

Sen. Charles Schumer , D-N.Y., called on the Food and Drug Administration (FDA) to investigate Prime energy drinks in 2023 because of dangerously high caffeine levels. Schumer alleged in a letter to the FDA that vague marketing targeting young people influenced parents to buy a “cauldron of caffeine" for their kids.

Schumer's call to action to the FDA is referenced in Vera's suit.

USA TODAY contacted Prime Hydration's attorneys Tuesday afternoon but did not receive an immediate response.

What are the Prime Hydration lawsuits?

Vera's legal battle is beginning, but Prime is still dealing with another class action suit from 2023 alleging a flavor of the company's sports drinks contains PFAS, or "forever chemicals."

Independent third-party testing determined the presence of PFAS chemicals in Prime Hydration grape flavor, according to a class action suit filed Aug. 2, 2023, in the Northern District of California by the Milberg law firm on behalf of Elizabeth Castillo and others similarly affected.

"Lead plaintiff Elizabeth Castillo, a resident of California, purchased Prime Hydration on multiple occasions but says she would not have bought it at all if the product had been accurately marketed and labeled as containing PFAS," the Milberg law firm said in an August 2023 news release . "These chemicals were not reasonably detectible to consumers like herself."

Castillo's suit is seeking a $5 million judgment, court records show.

As of April 18, the judge in the case has heard Prime's argument to dismiss the suit due to Castillo not alleging "a cognizable injury" and her not alleging "facts showing a concrete (and) imminent threat of future harm," according to the drink company's motion.

Paul addressed Castillo's claims Wednesday in a 3-minute TikTok video.

"First off, anyone can sue anyone at any time that does not make the lawsuit true," Paul said in the TikTok video. "And in this case, it is not… one person conducted a random study and has provided zero evidence to substantiate any of their claims."

What are forever chemicals?

PFAS are called forever chemicals because they "bioaccumulate, or accrue in the body over time," the Milberg law said in its news release.

"These man-made chemicals are well-studied and have been found to have adverse effects on the human body and environment," the New York City-headquartered law firm said.

Many PFAS are found in people's and animal's blood and can be detected at low levels in a variety of food products and in the environment, the U.S. Environmental Protection Agency (EPA) said. Forever chemicals can be found in water, air, fish and soil at locations across the nation and the globe, according to the EPA.

"There are thousands of PFAS chemicals, and they are found in many different consumer, commercial, and industrial products," the EPA said. "This makes it challenging to study and assess the potential human health and environmental risks."

Who made Prime energy drinks?

Before founding Prime Hydration LLC, Logan Paul, 29, and KSI, 30, were YouTubers who turned their millions of subscribers into supporters of their boxing, wrestling, music, social media content and other endeavors.

Going into the drinks business proved to be profitable for both YouTubers as "Prime Hydration generated more than $250 million in retail sales in its first year, including $45 million in a single month," according to the Milberg law firm.

Paul and KSI continue to keep Prime products in the spotlight whether it is paying for an ad during Super Bowl 57 , having livestreamer IShowSpeed dress up in a Prime sports drink bottle during Wrestlemania 40 or signing athletes including Patrick Mahomes, Aaron Judge, Israel Adesanya, Tyreek Hill, Kyle Larson, Alisha Lehmann and others to sponsorship deals.

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The biggest data breach fines, penalties, and settlements so far

Hacks and data thefts, enabled by weak security, cover-ups or avoidable mistakes have cost these companies a total of nearly $4.4 billion and counting..

Sizable fines assessed for data breaches in recent years suggest that regulators are getting more serious about cracking down on organizations that don’t properly protect consumer data.

Hit with a $ 1.3 billion fine for unlawfully transferring personal data from the European Union to the US, Meta tops the list of recent big-ticket sanctions, with one other ten figure fine being levied against the Chinese firm Didi Global for violating that nation’s data protection laws. The third largest penalty was the $877 million fine against Amazon in 2021 for running afoul of the General Data Protection Regulation (GDPR) in Europe.

Here are the biggest fines and penalties assessed for data breaches or non-compliance with security and privacy laws.

1. Meta (Facebook) : $1.3 Billion

In May 2023, Ireland’s Data Protection Commission (DPC) concluded an enquiry into Meta Platform Ireland Limited (“Meta Ireland”) it had initiated in Aug 2020, billing the social media giant €1.2 billion ($1.3 billion) for violation of the GDPR. With regards to the article 46(1) of the GDPR, the Irish privacy watchdog blamed Meta Ireland for the transfer of personal data from the EU or the European Economic Area (EEA) to the US without adequate data privacy safeguards in connection with the delivery of its Facebook services. Meta’s president of global affairs, Nick Clegg, said, “We intend to appeal both the decision’s substance and its orders including the fine, and will seek a stay through the courts to pause the implementation deadlines.”

2. Didi Global: $1.19 billion

Chinese ride-hailing firm Didi Global was fined 8.026 billion yuan ($1.19 billion) by the Cyberspace Administration of China after it decided that the company violated the nations’ network security law, data security law, and personal information protection law. In a statement, Didi Global said it accepted the cybersecurity regulators’ decision, which came after a  year-long investigation  into the firm over its security practices and “suspected illegal activities.”

3. Amazon: $877 million

In summer 2021, retail giant Amazon’s financial records revealed that officials in Luxembourg issued a €746 million (then $877 million) fine for breaches of the GDPR. Amazon was expected to be appeal the fine, with a spokesperson stating, “There has been no data breach, and no customer data has been exposed to any third party.” La Quadrature du Net, the French digital rights organization that filed the original data protection complaint against Amazon on behalf of 10,065 individual complainants in May 2018, said that was unsurprising, since its 19-page complaint targeted Amazon’s operation of a behavioral advertising system without adequate consent, and not an intermittent leak of personal data.

4. Equifax: (At least) $575 Million

2017 saw Equifax lose the personal and financial information of nearly 150 million people due to an unpatched Apache Struts framework in one of its databases. The company had failed to fix a critical vulnerability months after a patch had been issued and then failed to inform the public of the breach for weeks after it been discovered. 

In July 2019 the credit agency  agreed to pay  $575 million — potentially rising to $700 million — in a settlement with the Federal Trade Commission, the Consumer Financial Protection Bureau (CFPB), and all 50 U.S. states and territories over the company’s “failure to take reasonable steps to secure its network.” 

$300 million of that will go to a fund providing affected consumers with credit monitoring services (another $125 million will be added if the initial payment is not enough to compensate consumers), $175 million will go to 48 states, the District of Columbia and Puerto Rico, and $100 million will go to the CFPB. The settlement also requires the company to obtain third-party assessments of its information security program every two years.

“Companies that profit from personal information have an extra responsibility to protect and secure that data,” said FTC Chairman Joe Simons. “Equifax failed to take basic steps that may have prevented the breach that affected approximately 147 million consumers.”

Equifax had already been fined £500,000 [~$625,000]  in the UK for the 2017 breach, which was the maximum fine allowed under the pre-GDPR Data Protection Act 1998.

In 2020, Equifax was made to pay further settlements relating to the breach:  $7.75 million  (plus $2 million in legal fees) to financial institutions in the US plus  $18.2 million  and  $19.5 million  to the states of Massachusetts and Indiana respectively. 

5. Meta (Facebook, Instagram): $ 413 million

Concluding two enquiries made into Meta’s data processing operations in the European regions, commencing on the day GDPR came into operations (25 May, 2018), the Irish Data Protection Commission (DPC) announced in January 2023 that it found Meta platforms in breach of the GDPR “in connection with the delivery of its Facebook and Instagram services”. Meta Ireland was fined €210 million ($ 225 million) , for Facebook violations, and and €180 million ($ 193 million) for Instagram violations.

Meta’s data processing operations with regards to Facebook and Instagram services were found in violations of several articles of the GDPR, including 5 (1) a) , 6 (1), 12 , and 13 (1) c), relating to the breach of transparency and information obligations.

6. Instagram: $403 million

In September 2022, Ireland’s Data Protection Commissioner (DPC) fined Instagram for violating children’s privacy under the terms of the GDPR. The long-running complaint concerned data belonging to minors, particularly phone numbers and email addresses, which was made more public when some young users upgraded their profiles to business accounts to access analytics tools such as profile visits.

Instagram’s owner, Meta, said it planned to appeal against the decision. “This inquiry focused on old settings that we updated over a year ago and we’ve since released many new features to help keep teens safe and their information private,” a  Meta official told BBC News . “While we’ve engaged fully with the DPC throughout their inquiry, we disagree with how this fine was calculated and intend to appeal it.”

Andy Burrows, child-safety-online policy head at the National Society for the Prevention of Cruelty to Children (NSPCC) said, “This was a major breach that had significant safeguarding implications and the potential to cause real harm to children using Instagram. The ruling demonstrates how effective enforcement can protect children on social media and underlines how regulation is already making children safer online.”

7. TikTok: €345 million ($370 million)

In September 2023, TikTok was handed a €345 million ($370 million) fine by the  Irish Data Protection Commission  (DPC) for violating children’s data privacy, under GDPR law. The DPC found that TikTok had not been transparent enough with children about its privacy settings, and raised questions about how their data was processed.

The inquiry sought to examine the extent to which, during the period between July 31 2020 and December 31 2020, TikTok complied with its obligations under the GDPR in relation to its processing of personal data relating to child users of the TikTok platform in the context of:

• Certain TikTok platform settings, including public-by-default settings as well as the settings associated with the Family Pairing feature.
• Age verification as part of the registration process.

“As part of the inquiry, the DPC also examined certain of TTL’s transparency obligations, including the extent of information provided to child users in relation to default settings,” the IDC said. The DPC’s decision, which was adopted on September 1, 2023, recorded findings of infringement of Articles 5(1)(c), 5(1)(f), 24(1), 25(1), 25(2), 12(1), 13(1)(e) and 5(1)(a) GDPR, relating to a range of matters including data security, data protection by design, and data processing.

A spokesperson for the social media firm told media outlets, “We respectfully disagree with the decision, particularly the level of the fine imposed.”

8. T-Mobile: $350 million

In July 2022, mobile communications giant T-Mobile announced the terms of a settlement for a consolidated class action lawsuit following a data breach that occurred in early 2021, impacting an estimated 77 million people. The incident centered around “unauthorized access” to T-Mobile’s systems after a portion of customer data was listed for sale on a known cybercriminal forum. In an  SEC filing , it was revealed that T-Mobile would pay an aggregate of $350 million to fund claims submitted by class members, the legal fees of plaintiffs’ counsel, and the costs of administering the settlement. The company would also commit to an aggregate incremental spend of $150 million for data security and related technology in 2022 and 2023.

“The company anticipates that, upon court approval, the settlement will provide a full release of all claims arising out of the cyberattack by class members, who do not opt out, against all defendants, including the company, its subsidiaries and affiliates, and its directors and officers,” the filing read. “The settlement contains no admission of liability, wrongdoing or responsibility by any of the defendants. Class members consist of all individuals whose personal information was compromised in the breach, subject to certain exceptions set forth in the agreement. The company believes that terms of the proposed settlement are in line with other settlements of similar types of claims,” it added.

9. Meta (Facebook): $277 million

In November 2022, the  Ireland Data Protection Commission (DPC) fined Meta $277 million  (€265 million) for the compromise of 500 million users’ personal information. The DPC started its inquiry on April 14, 2021, following reports of a collated data set of Facebook personal data that had been made available on the internet. The scope of the inquiry concerned an examination and assessment of Facebook Search, Facebook Messenger Contact Importer and Instagram Contact Importer tools in relation to processing carried out by Meta Platforms Ireland Limited (“MPIL”) during the period between May 25, 2018, and September 2019. “The material issues in this inquiry concerned questions of compliance with the GDPR obligation for Data Protection by Design and Default,” the DPC wrote. “The DPC examined the implementation of technical and organizational measures pursuant to Article 25 GDPR (which deals with this concept). There was a comprehensive inquiry process, including cooperation with all of the other data protection supervisory authorities within the EU. Those supervisory authorities agreed with the decision of the DPC.”

The decision imposed a reprimand and an order requiring MPIL to bring its processing into compliance by taking a range of specified remedial actions within a particular timeframe.

10. WhatsApp: $255 million

Facebook-owned messaging service WhatsApp was fined €225 million ($255 million) in August 2021 for a series of GDPR cross-border data protection infringements in Ireland. The fine followed a  lengthy investigation and enforcement process  which began in 2018 and involved the Data Protection Commission’s proposed decision and sanctions being rejected by its counterpart European data protection regulators, resulting in a referral to and ruling from the European Data Protection Board. Allegations focused on complaints from users and non-users of WhatsApp’s services, involving alleged breaches of transparency and data subject information obligations under articles 12, 13 and 14 of the GDPR.

11. Home Depot: ~$200 million

In 2014 Home Depot was involved in one of the largest data breaches to date involving a point-of-sale (POS) system, leading to a number of fines and settlements being paid. Stolen credentials from a third party enabled attackers to enter Home Depot’s network, elevate privileges, and eventually compromise the POS system. More than 50 million credit card numbers and 53 million email addresses were stolen over a five-month period between April and September 2014.

Home Depot has reportedly paid out at least $134.5 million to credit card companies and banks as a result of the breach. In addition, in 2016 Home Depot agreed to pay $19.5 million to customers that had been affected by the breach, which included the cost of credit monitoring services to breach victims. In 2017 the firm agreed to pay an additional $25 million to the financial institutions affected by the breach that could be claimed by victims and cover banks’ losses.

Breaches can have a longtail of costs, especially when it comes to fines and settlements. In November 2020, the retailer paid a further $17.5 million settlement to 46 US states and Washington DC for the breach. The agreement also compels Home Depot to employ a highly qualified CISO, provide security training for key personnel, and ensure security controls and policies in areas like identity and access, monitoring, and incident response.

12. Capital One: $190 million

In December 2021, Capital One agreed to pay $190 million to settle a class-action lawsuit filed against it by U.S. customers over a  2019 data breach  that affected 100 million people. This settlement comes more than a year after the U.S. Office of the Comptroller of the Currency fined Capital One $80 million for the same breach (see below).

A software engineer at AWS was behind the attack, which exposed information including bank account details. “While Capital One and AWS deny all liability, in the interest of avoiding the time, expense and uncertainty of continued litigation, plaintiffs and Capital One have executed a term sheet containing the essential terms of a class settlement that, if approved by this court, will fully resolve all claims brought by plaintiffs,” a filing with the U.S. District Court for the Eastern District of Virginia read. In an emailed statement, Capital One said that key facts in the case had not changed since it announced the event in coordination with federal authorities more than two years ago, with the hacker arrested and the stolen data recovered before it could be disseminated or used for fraudulent purposes. “We are pleased to have reached an agreement that will resolve the consumer class litigation in the U.S.,” the company added.

13. Uber: $148 million

In 2016 ride-hailing app Uber had 600,000 driver and 57 million user accounts breached. Instead of reporting the incident, the company paid the perpetrator $100,000 to keep the hack under wraps. Those actions, however, cost the company dearly. The company was fined  $148 million  in 2018 — the biggest data-breach fine in history at the time — for violation of state data breach notification laws.

14. Morgan Stanley: $120 million (total)

In January 2022, investment bank and financial services giant  Morgan Stanley agreed to pay $60 million  to settle a legal claim relating to its data security. The agreement, if approved by a federal judge in Manhattan, will resolve a class-action lawsuit was that filed against the company in July 2020 regarding two security breaches that compromised the personal data of approximately 15 million customers. According to claimants, Morgan Stanley failed to protect the personally identifiable information (PII) of current and former clients. It is alleged data center equipment decommissioned by the firm in 2016 and 2019 was not efficiently wiped clean and a software flaw meant that unencrypted, sensitive data was visible to whoever purchased the equipment.

The proposed claim settlement comes more than a year after Morgan Stanley was handed a separate $60 million civil penalty by  the Office of the Comptroller of the Currency (OCC)  in relation to the same incidents. The OCC stated that Morgan Stanley failed “to exercise proper oversight of the 2016 decommissioning of two Wealth Management business data centers located in the U.S. Among other things, the banks failed to effectively assess or address risks associated with decommissioning its hardware; failed to adequately assess the risk of subcontracting the decommissioning work, including exercising adequate due diligence in selecting a vendor and monitoring its performance; and failed to maintain appropriate inventory of customer data stored on the decommissioned hardware devices.” In 2019, the banks experienced similar vendor management control deficiencies in connection with decommissioning other network devices that also stored customer data, the OCC added.

In a statement on the recent settlement agreement, Morgan Stanley said: “We have previously notified all potentially impacted clients regarding these matters, which occurred several years ago, and are pleased to be resolving this related litigation.”

15. Google Ireland: $102 million

Google Ireland was hit by a €90 million ($102 million) fine by French data protection authority the CNIL on January 6, 2022. The fine related to how Google’s European arm implements cookie consent procedures on YouTube. “The CNIL has received many complaints about the way cookies can be refused on the websites google.fr and youtube.com,”  it wrote . “In June 2021, the CNIL carried out an online investigation on these websites and found that, while they offer a button allowing immediate acceptance of cookies, the sites do not implement an equivalent solution (button or other) enabling the user to refuse the deposit of cookies equally easily. Several clicks are required to refuse all cookies, against a single one to accept them.” The restricted committee considered that this process affected the freedom of consent of internet users and constituted an infringement of Article 82 of the French Data Protection Act.

Editor’s note: This article, originally published in July 2019, is frequently updated as new information on incident penalties becomes available.

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Shweta Sharma is a senior journalist covering enterprise information security and digital ledger technologies for IDG’s CSO Online, Computerworld, and other enterprise sites.

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