Amazon boss set to become world’s richest man
Amazon’s bid to buy Whole Foods supermarkets has boosted the company’s value — and that of its boss Jeff Bezos. The acquisition will make Amazon more powerful than ever. Is this good or bad?
On Friday Amazon announced that it is buying Whole Foods, the US supermarket chain, for $13.7 billion. Its stock instantly skyrocketed, breaking all laws of business.
The net worth of its boss Jeff Bezos also jumped, bringing him within touching distance of the world’s richest man, Bill Gates.
The acquisition adds territory to Bezos’s rapidly expanding business empire. He already owns The Washington Post newspaper and space travel firm Blue Origin. At the heart of it all is Amazon, one of the world’s largest retailers.
Famously, Bezos’s management style is built on a few strong principles. He outlined them in a recent letter to shareholders:
“True customer obsession”: Use imagination and intuition to come up with great products.
“Resist proxies”: Make it clear which employee is responsible for what. Don’t pass the buck.
“Embrace external trends”: Keep on top of industrial and technological developments.
“High-velocity decision making”: Don’t hesitate too much, and take risks — many decisions are reversible if they fail.
Clearly this approach works. Amazon has seen constant growth since its birth in 1994. And as it grows, its competitors shrink: on Friday, supermarket giant Walmart’s stock fell by 5%.
Amazon has a reputation for putting companies out of business. Its shareholders are happy. But should we be?
Of course, say some. A business this big brings us all kinds of advantages. Prices stay low. Things become more convenient. And the company can afford to experiment and come up with interesting new products. We win.
As consumers, maybe, reply others. But a company this powerful is bad news for society at large. It stifles start-ups. It collects a scary amount of data on your personal habits. As other businesses die out, it could start increasing its prices.
- Do you shop regularly on Amazon? Why (not)?
- Read Jeff Bezos’s tweet in Become An Expert (and some of the responses, for inspiration). Then write him a letter outlining how you think his money should be spent.
Some People Say...
“Life’s too short to hang out with people who aren’t resourceful.”— Jeff Bezos
What do you think?
Q & A
- What do we know?
- Whole Foods is an upmarket chain specialising in organic groceries. It has 431 stores across the USA, mostly in affluent areas (where there are more Amazon customers), and nine in the UK.
- What do we not know?
- Exactly what Amazon plans to do with the stores. It already has an online grocery delivery service, AmazonFresh, which has not really taken off. This deal could change that.
- Breaking all laws
- Normally, when a company announces an acquisition, its share price falls. There are various reasons for this, such as the high cost of acquisition and the uncertainty it creates.
- Bill Gates
- The computer entrepreneur and Microsoft cofounder is valued at $89.7 billion by Bloomberg. Bezos comes in at $84.6 billion.
- With its thousands of stores across the USA, the world’s biggest retailer has long dominated the discount market. Amazon has recently been targeting its customer base by offering discounts to people on welfare.