What is Amazon's acquisition strategy?

Amazon's acquisition strategy has evolved over time, particularly noted for its significant increase in company acquisitions as the company itself grew larger. Historically, Amazon's acquisitions have been aimed at automating operations, enhancing efficiency, and integrating leadership within the company. For example, the acquisition of Kiva Systems was a strategic move to automate Amazon's fulfillment centers, significantly increasing their efficiency. This acquisition also proved to be a leadership stepping stone for key executives like Dave Clark 1.

Amazon has also been known for acquiring companies that could pose competitive threats, using acquisitions to neutralize these threats and simultaneously gain strategic advantages. The acquisition of Zappos, for instance, was not just about expanding into new product categories but also about mitigating a potential competitive threat 2.

Furthermore, Amazon's acquisitions sometimes reflect broader strategic shifts towards sectors with burgeoning growth potential. The acquisition of Whole Foods, for example, allowed Amazon to rapidly expand its footprint in the grocery sector, positioning itself near a significant percentage of affluent households, which ultimately accelerated its strategy to dominate the retail and grocery spaces 3.