7 strategies to avoid being a ‘Prime’ target

Data day business

Unless you lead Amazon or one of the major data-guzzling market titans, your business is in one or three states:

• Being digested by Amazon.
• Been obliterated by Amazon.
• Wondering when either of the previous will happen to your business / sector.

Amazon has played a long game. They have smartly focused on building assets, rather than simply making a profit. They have habituated the buying habits of many consumers, and are now doing so in respect of enterprises.

Through its SEAL team of data scientists, who swim daily through its ocean of data, it can make predictions about market behaviour that remain invisible to all others.

With that level of foresight, it can choose which markets to enter with a high degree of confidence. Everything after that is a mere detail of implementation.

Digital road kill

Many of us are already suffering because we are forced to use Amazon as a channel to market or risk commercial exile. Your success is thus down to Amazon’s ranking algorithm, which could change based on what Jeff Bezos has had for breakfast.

Some of us are less concerned because we control the supply. We build the cars or package life critical medication into sterile injector pens.

But if the market is sufficiently large, Amazon could easily move deeper into the supply chain.

If you are lucky, it will buy your organisation for the purposes of acquiring an initial template for its grand plan for your market. If you are unlucky, you will become digital age ‘road kill’.

Prepare for the digital tsunami

But there are a number of approaches you can take to capitalise on what might be considered as a corporate manifestation of the digital tsunami we so often hear about.

• You can carry on as normal believing that there is no way a grocer would be interested in your business / market.
• You can ‘fatten’ your organisation for market and present it to Amazon as the aforementioned template for your sector.
• You can develop a polymodal approach whereby you are not reliant on one single business model. If Amazon destroys your plan A, plan G or H will kick in as your primary business.
• You can ultra-niche your offerings such that there is no one jewel big enough to attract Amazon’s predatory attention.
• You can collaborate with your enemies / competitors to develop a sector marketplace / platform that has the scale to compete with Amazon. You would likely lose margin, but would retain independence.
• You could build a poison pill into your organisation, so that the leadership team are highly disincentivised to stay in the event of a takeover.
• You could call the switchboard of Alibaba and at least make both parties fight over what your organisation is worth.

I am possibly overstating the Amazon dynamic. In any case, this post is not really a dig at Amazon. It’s playing the game well. I am broadly referring to those players in the market who get digital, or were born digital. They are turning data and human cognition into value and better business decisions. And they are enjoying the exponential gains (compound interest, “the 8th wonder of the world”, Albert Einstein) of having been an early mover in respect of digital age business models.

Capital mind-set

Business leaders seem to recognise the data capital piece, particularly when I articulate data as an asset. Though they struggle to make the connection between their IT function / CIO and this asset.

In respect of cognitive capital, business leaders get the cognitive capital piece, but continue to treat their people as if they were replaceable factory components.

CIOs and CHROs must take some responsibility for their respective asset underperformance. The digital age titans make no such mistakes.

I encourage you to spend less time focusing on digitisation, which can be considered as either a misinformed understanding of transformation, or a lazy form of transformational execution. Business leaders need to zoom out further in their thinking and wake up each day with a greater sense of urgency and existential angst.

Neo-dinosaurs are coming

Such is the nature of exponential growth that even a faint whiff of smoke today, if left unscrutinised, will become a raging fire before you know it. We need to get real about life on the digital savanna, where the very big animals are making a comeback. Unless your organisation is one of these neo-dinosaurs, you would be wise to quickly decide which of the above options represents your business strategy.