Sunday, May 10, 2009

amazon and the importance of core competency

How importance is core competency? I first knew about Amazon.com as online bookseller. Then it expanded into other categories like music and electronics. Eventually, it started to sell all kinds of products. It dabbled in other kinds of retail endeavors like auctions, but it seemed to be sticking to selling products to consumers.

Then Amazon introduced EC2 and AWS. Suddenly, it was selling computing resources to developers which seemed far afield from selling books on the web. Then, it developed and sold the Kindle, an e-book reader with wireless access.

These seem like separate lines of business that are not very connected. What happened to the idea of core competency? It's an important concept that businesses need to consider when choosing what to do. Now, it may be possible to come up with a core competency for Amazon that encompasses all these businesses, but I would expect that explanation would cover almost any other business too. Such an all-encompassing purview seems to defeat the point of articulating a core competency.

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