LearnBonds.com

Amazon.com Won’t Kill Your Favorite Company

Amazon.com (AMZN) Amazon
Rate this post

Amazon.com, Inc. (NASDAQ:AMZN) is a great company, there can be no doubt about it. It offers excellent value to customers, and they repay it with their loyalty. As it grows and grows, however, there’s growing rumors that Amazon is going to compete with everybody and become an unstoppable monopoly. That really doesn’t seem likely to happen.

The latest source of these ideas is people who care about Blue Apron Holdings Inc
(NYSE:APRN). The company’s stock has been squashed on the back of rumors that Jeff Bezos and his team see an opportunity in the “meal kit” business.

For those not familiar, Blue Apron sends pre-packaged measured ingredients to subscribers along with a recipe card. The effect is the ability to cook at home in the simplest way possible.

An expert’s advice for Blue Apron Holdings Inc

Sharmila C. Chatterjee, a lecturer at the Sloan school of business in MIT, offered some advice to Blue Apron in a column published by Marketwatch on Saturday. In her view the most important thing for the firm is a focus on quality.

Blue Apron Vs Amazon.com, Inc. (NASDAQ:AMZN)
Source: Blue Apron

Blue Apron Holdings Inc (NYSE:APRN), she wrote, “needs to follow a recipe for success by resisting the temptation to play the discounting game and investing with a laser focus on delivering on millennial tastes and values.”

That’s a dangerous game to play. Though a focus on quality can be a great way to beat out discounters, Amazon may be able to play the same game. With the Whole Foods brand name behind it, that might be made a lot easier too.

This is the challenge that Blue Apron Holdings Inc (NYSE:APRN) needs to rise to. Chatterjee thinks that the firm, if it follows the correct strategy, should be able to meet it.

The components of that strategy are first taste and variety and second social consciousness. The firm, in Chatterjee’s opinion, should try to appeal on an environmentally friendly platform. It’s the younger generation that’s buying the meal kits after all. They’re distinguished by their care for the environment, and so might respond to appeals from that angle.

Amazon stock is still rising

Earnings for the three months through June may have been a little bit disappointing at Amazon.com, Inc. (NASDAQ:AMZN) but the firm’s future is being broadly supported by

Amazon is growing, but that doesn’t mean that the firm is innately able to take over every industry. Its TV streaming service, and original content in particular, pale in comparison to the Netflix, Inc. business. The firm’s smart phone was a mega flop, and its grocery delivery business is still struggling.

Those with Blue Apron stock are right to be worried. Competing with Amazon is a scary prospect. The Amazon totalists, however, are very wrong. The firm isn’t great at everything it touches. It’s fantastic at its retail operation. Everything else really remains to be seen.

Because of the pressure from Amazon shares in Blue Apron Holdings Inc have lost more than 40 percent of their value. Those betting against the company should focus on its loss-making core business rather than the “but Amazon” part of the argument.

All trading carries risk. Views expressed are those of the writers only. Past performance is no guarantee of future results. The opinions expressed in this Site do not constitute investment advice and independent financial advice should be sought where appropriate. This website is free for you to use but we may receive commission from the companies we feature on this site.
Avatar

Paul Shea

Write first comment

Reply

Your email address is not published.