Chapter 5

Amazon excels by combining cost leadership and differentiation—two key business-level strategies outlined in Chapter 5. It keeps costs low through its massive, efficient fulfillment network, scale economies, and tight operational control. At the same time, it differentiates by offering unique value—such as fast delivery via Prime, smart recommendations powered by AI, and a vast product range. This “combo strategy” enables Amazon to appeal to both deal-seekers and convenience-oriented customers, making it hard for competitors to match. Over time, Amazon sustains these advantages by consistently investing in tech, refining logistics, and continuously innovating its services—exactly as the chapter recommends for sustaining competitive superiority across an industry's lifecycle