Ensuring a competitor can’t arise in other ways? Unlike Yelp, Amazon has oodles of expensive and difficult-to-replicate physical infrastructure, hordes of low-level staff, exclusive supply contracts aplenty, enough cash reserves to price-dump anybody into oblivion, and probably many other things I don’t even know I don’t know about.
Competition only works when barriers to entry are absent, small, or at least surmountable. “Disruption” is one way to circumvent that, but it isn’t magic, either.
I’m sure the brick and mortar stores felt similar before Amazon came and ate their lunch. Expensive and difficult to replicate infrastructure is a protective measure until it suddenly becomes a millstone around your neck due to its cost and inertia.
On the other hand customer trust is also a great moat to protect you from being usurped, and no company will ever come to rue having too much consumer trust. Amazon is foolish to spend this consumer trust down for increased profits.
They don't even have to spend cash to price-dump. Wallyworld and the membership warehouses get cheap prices by dangling huge purchase orders in front of companies. "We can always go to your competitor" is the unspoken threat.
> Amazon has oodles of expensive and difficult-to-replicate physical infrastructure, hordes of low-level staff, exclusive supply contracts aplenty, enough cash reserves to price-dump anybody into oblivion, and probably many other things I don’t even know I don’t know about.
The playbook to disrupt this was made clear when AirBNB disrupted, or at least bit a good chunk out of, the hotel industry, which could have been described in very similar terms. And they didn't have to replicate any of their physical infrastructure to do it.
Shopify, BigCommerce, and similar players are already doing it to Amazon. I predict this trend will continue.
Competition only works when barriers to entry are absent, small, or at least surmountable. “Disruption” is one way to circumvent that, but it isn’t magic, either.