This year Amazon invested heavily in disruptive-growth opportunities — and investors were not pleased.
On Tuesday, Amazon.com reported third-quarter earnings that fell far short of Wall Street’s expectations. Its earnings were down 73% from the quarter a year earlier and it missed the analysts’ consensus estimate of $0.24 per share by nearly a dime
Amazon missed its earnings because the company has been investing more heavily than Wall Street expected. And these investments are being made in the infrastructure to support not just a single disruptive business, but a number of disruptive-growth opportunities. Below is a snapshot of Amazon’s portfolio of disruptive businesses:
- Amazon Retail — disrupting traditional retailers
- Amazon Kindle — disrupting the paper book format and paper book retailers
- CreateSpace — a self-publishing solution that disrupts traditional publishing houses
- Kindle Fire Tablet — a new market disruption enabled by business model innovation
- Amazon MP3 and streaming audio and video — disrupting traditional content distribution companies
- Amazon Web Services — disrupting the companies that sell on-site servers and native software applications
But Amazon looks at the world in a different way. The company has a set of organizational capabilities and is not afraid to leverage them to pursue almost any disruptive opportunity. It’s as if Amazon does not view itself as a retail company, but rather as an incubator for disruptive businesses. And in the process of building those businesses, the company is disrupting pretty much everyone except itself. By their nature, disruptive opportunities are small for a long time before they can contribute meaningfully to a large company’s bottom line [Source].
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