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Opinion CX on Mobile

Amazon Shows Its Achilles Heel -- Reactivity

Amazon recently launched the Fire Phone — and it’s been a big flop. Where did they go wrong?

We’d say in 3 ways:

1. They reacted

There’s a right way and wrong way to respond to a competitor who seems to be out performing you in a space in which your company’s leaders think it should be competitive.

The wrong way is to let your ego drive your decision making (ie. “if they can do it, we can do it better, even if we’ve never done it before”).

The right way is to consider both the strategic importance and feasibility of competing against a powerful competitor.

Amazon clearly got this one wrong.

2. They fell for the feature war paradigm.

Samsung is playing a different game than Apple is. The former is all about the features and the numbers. They want to sell as many phones as possible at the highest possible price — but will compete on price if necessary.

They’re not discerning about who their customer is and how they use the phone — they just want them to buy one.

Apple is on a different path. They want the most entrenched, highest spending customers and they want to own their total experience. That means phone, tablet, laptop, iTunes, iCloud and soon, they hope, watch. Those customers generate the highest margin in the smartphone space and they are fiercely loyal to Apple and its ecosystem.

Amazon can’t win either fight — Samsung owns the features was space and Apple has the ecosystem game locked up.

3. They were company centric not customer centric.

They built a phone that would be integrated with Amazon — but that’s not all that their customers want to be integrated with. Sure Amazon is important for a lot of people, but how much of a pain spot is there in the current smartphone app that sits on iPhones and Android phones? The pain entirely lies on the side of Amazon -- something which they made a primary focus in their smartphone design.

Simply put: bad strategy Amazon. You’ve stuck your neck out a long way and your company has taken a perception beating for its totally failure to impact the smartphone market.

Nov 22, 2014  

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