Question

What milestone did Amazon temporarily pass in September 2018? Explain. How is the success of the megacompanies Apple and Amazon very different? Explain. What are examples of some of Amazon’s less than successful ventures? Explain. Why does Mr. Nussbaum bet against Amazon? Explain the reason he is a “Amazon skeptic”. Finally, why do you think Wall Street investors believe that Amazon, not Apple, will be the first $2 trillion company? Of the two companies, which stock would you purchase and hold for the next ten years? Defend your answer.

Answer 1

Amazon recently in September 2018 crossed Market Capitalization of 1trillion dollars which is landmark feat.

Apple and Amazon success is completely different because Apple uses pull marketing and is niche market brand whereas Amazon uses push marketing and is mass market brand. Amazon has widest presence, top organisation culture and highest CAGR since 2000. Whereas Apple is profit centric and looks to defend profits rather than market share.

Amazon has invested in more than 128 startups out of which 4 of them have miserably failed like Shopbop. Com, Emvantage payments, Petnet, Yummy 77.

Mr. Nussbaum bets against because he feels Amazon is not profit centric and ha sprofits less than 1/10th of Apple.

However wall street believes Amazon will cross 2trillion dollar Mcap first becaus eof its growth prospects from Amazon Webs ervices, Amazon Alexa, Drone delivery, Amazon Prime Video which will revolutionise America and emerging markets like India as well.

It is best to purchase Apple as stock for 10years ahead because of its high profit margins which means higher dividend payouts to shareholders. Apple net profit increases year on year and so does stock and hence massive returns in long term is guaranteed.