The Value Chain Constraint

amazon knows how to source, warehouse and deliver non-perishibles, but groceries (perishables) require a different, more urgent value chain that doesn’t build on their existing expertise. they effectively need to build a parallel business (which they jump-started by buying whole foods).

with google, it boils down to “google sucks at sales and service” (value delivered outside technological expertise).

this is a high-level initial analysis (as you’d do in an mba strategy class), which is probably why it feels generic. you’d typically delve deeper into the leverage points, like logistics for amazon and sales and marketing for google.

I'm not sure what parts of a value chain a business controls and core competencies are the same thing.

> What does work are (1) forward and backwards integrations into the value chain and (2) acquisitions.

He's saying that no matter what your core competencies are, no business can adapt to an entirely new value chain. At best they can hope to acquire a company with the right business model, or integrate further into an existing value chain (Netflix, moving into content creation and distribution).

AWS: 51.8% Azure: 13.3% GCP: 3.3%