BITE | Amazon's technological prowess: A change agent in the transformation of industries.
Bite, a short article with relevant information you should know about the companies where you can invest, learn more about: Metaq. Its structure, impact and business model.
Meet our Bites, short articles in which you can learn more about the companies in which you can invest. In this entry: Amazon.
Learn more about its structure and business model.
Its impact on the technology sector
Innovation and new developments
Does it fit your investment strategy?
Amazon (AMZN) is a multinational technology company headquartered in Seattle (Washington, USA) founded in 1994 by Jeff Bezos. The company started as an online bookstore, but has since expanded into a variety of products and services, including electronics, apparel, home goods, groceries and streaming media. Amazon's core business is its e-commerce platform, which offers customers a wide range of products worldwide. It has also invested heavily in technology, such as artificial intelligence and robotics, to improve its operations, logistics and delivery services. In addition, Amazon has expanded into other sectors, such as cloud services, advertising and entertainment, such as music and video streaming services.
Amazon is organized into several separate business segments, such as North America, International, Amazon Web Services and Amazon Advertising. The company's culture is known for focusing on customer obsession, innovation and speed. It has also built an extensive network of warehouses and distribution centers around the world to ensure fast and reliable delivery to customers. Amazon's success has made it one of the most valuable companies in the world, with a market capitalization in excess of nearly $1 trillion by 2023.
Its dominance in the e-commerce sector also disrupted traditional retail, closing many physical stores and pushing others to adopt online platforms. Overall, Amazon represents a significant force in the consumer discretionary sector, providing customers with a wide range of products and services and reshaping the retail industry through technological innovation and unprecedented customer experience.
What's new at Amazon
Amazon's reach has expanded in recent years as it has made strategic acquisitions to deepen its presence in a variety of sectors. One such acquisition is the purchase of One Medical, a primary care provider, for $3.9 billion. Amazon agreed to acquire One Medical in July 2021 with the goal of improving the customer experience when it comes to receiving medical care. The acquisition gives Amazon access to One Medical's more than 200 physical physician practices in 26 markets and approximately 815,000 members.
This acquisition represents Amazon's latest push into the healthcare industry, as the company has made several strategic moves to expand its presence. In 2018, Amazon acquired online pharmacy PillPack for $750 million, giving the company a direct-to-consumer delivery platform for prescription drugs. Amazon also launched its virtual clinic for chronic conditions and prescription benefits for Prime members. The acquisition of One Medical further strengthens Amazon's position in the healthcare industry, as the company looks to leverage its technology and customer-centric approach to transform the way people receive care.
Andy Jassy, who took over as CEO of Amazon from founder Jeff Bezos in July 2021, has indicated that he sees healthcare as an important area of expansion for the company. In a statement, Jassy said healthcare is ripe for disruption, citing long appointment times and the complexities of primary care. He believes Amazon and One Medical can make the healthcare experience easier, faster, more personal and more convenient for everyone.
Although the acquisition of One Medical is now complete, the deal underwent an in-depth review by the Federal Trade Commission (FTC) for several months. The FTC sent Amazon and One Medical a second request for more information about the deal in September 2021. The agency continues to have specific concerns about the deal and has warned the companies that they are closing it at their own peril. The FTC could still decide to bring a case to undo the merger later if it finds evidence of anticompetitive behavior.
Drone deliveries
Amazon has unveiled its state-of-the-art robotic system, Sequoia, which will operate out of its Houston distribution center to revolutionize its delivery process ahead of the busy holiday shopping season. The technology promises to speed up inventory management by a staggering 75% and reduce processing time by up to 25%, increasing the availability of goods for same-day or next-day shipping. In particular, this innovation aims to improve workplace safety by minimizing strenuous physical activities for employees, which could reduce the alarming rate of injuries recorded at Amazon's facilities.
According to the union coalition Strategic Organizing Center, Amazon suffered 6.6 serious injuries per 100 workers in 2022, while non-Amazon warehouses recorded 3.2 injuries per 100 workers. In addition, Amazon is set to test Digit, a bipedal robot designed to navigate warehouse corners and help with repetitive tasks, such as recycling garbage cans. While the announcement did not address concerns about potential layoffs, Amazon stressed that its decade-long investment in robotic systems has created hundreds of thousands of jobs that did not exist before. The breakthrough is a major step forward in Amazon's continued pursuit of innovation in e-commerce and automation.
*For illustrative purposes only, it does not represent an investment recommendation.