Small businesses can apply Amazon's strategy by first understanding their customers' willingness to pay (WTP) for their products or services. This involves conducting market research to understand what customers value and are willing to pay for. Once this is understood, businesses can then focus on improving convenience for their customers. This could involve simplifying the purchasing process, offering fast and reliable delivery options, or providing excellent customer service. By focusing on these two areas, small businesses can increase their value proposition, attract more customers, and ultimately grow their market share.

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Amazon's entry into the e-reader market, dominated by Sony's Librie, is a classic example of how a company can successfully penetrate a market dominated by a single player. Despite Sony's first-mover advantage, dominant market share, and big marketing budget, Amazon managed to win a 62% market share within just five years. Amazon's strategy was to focus on the customer's willingness to pay (WTP) and improve convenience across the customer journey. They offered free 3G internet access, enabling users to instantly download e-books, while Sony users had to rely on computers. This case illustrates that businesses entering a market dominated by a single player should focus on understanding customer needs and improving the overall customer experience, rather than just focusing on the product.

The key takeaways from Amazon's strategy that are actionable for entrepreneurs or managers in the tech industry include:

1. Focus on the customer journey: Amazon's success in the e-reader market was largely due to its focus on improving convenience across the customer journey, not just the product itself.

2. Leverage technology to enhance customer experience: Amazon offered free 3G internet access, enabling users to instantly download e-books. This was a significant differentiator from competitors.

3. Don't just rely on a great product: Sony had a great product and first-mover advantage, but Amazon won the market share by focusing on what would increase the customer's willingness to pay (WTP).

The strategy of focusing on willingness to pay (WTP) and improving convenience has significantly influenced corporate strategies and business models in the e-reader market. This is evident in Amazon's approach to the e-reader market. Despite Sony's dominance and first-mover advantage, Amazon was able to capture a 62% market share within just five years. Amazon achieved this by offering free 3G internet access, which allowed users to instantly download e-books, providing a level of convenience that Sony's product did not offer. This focus on WTP and convenience, rather than just the product itself, allowed Amazon to successfully compete in the e-reader market.

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Better, Simpler Strategy

Ever wondered what strategies make Apple, Amazon, and other juggernauts so successful? Better, Simpl...

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