by Michael Zammuto

Why Google and Amazon can win in any business – including yours

Jun 05, 2018
EnterpriseTechnology Industry

From film production and consumer electronics to healthcare and grocery delivery, Amazon and Alphabet (Google) are moving in many directions at once. They have pioneered a new strategic model and their data-first principles allows them to enter and disrupts any business, including yours.

‘Learning’ as a way of building competitive advantage

Twenty years ago, Michael Treacy’s The Discipline of Market Leaders, argued that market leadership came from a laser focus on dominating in one of three key areas: customer intimacy, product leadership, or operational excellence. You could be good in many things it argued, but you had to dominate your space in one of these categories to be the leader. While these are still important, they won’t provide the edge a business needs in today’s world to gain ground on its competitors.

Competitive advantage in the near future will not come from a focus on traditional business models. It will be achieved by embracing machine learning (and increasingly artificial intelligence). Any company that is willing to accept this reality and take it to heart can compete against much larger competitors.

There will still be plenty of challenges, even for companies that integrate deep learning technology in their business model. Artificial intelligence can only help your business if you are asking it the right questions. You must be focused on gathering data that you can use. Machine learning algorithms will not work if you have not done the ground work to gather the right information from your customers.

Google and Amazon can tap into massive data sets and they are using them to their advantage. That might not be so important without artificial intelligence technology, but with it, it is a game changer. It is the reason that they can win in any business they choose to take on – including yours.

Both companies have embraced machine learning and integrated it into their corporate culture. For them it is not just another tool, it is the driving force behind their business model. This philosophy sets them apart from almost every other business, including other tech giants. They can use artificial intelligence to analyze a library of digital data and gain valuable insights into any industry they chose to enter.

Big data analysis drives the AI business model

In recent years, we have witnessed an astounding increase in the availability of digital data for analysis. Google and Amazon are using machine learning to find patterns and gain insights that otherwise would not be available. Every business they are involved in now uses artificial intelligence to help drive success. It gives them a competitive advantage, but other companies can still compete if they embrace the technology as well.

Sure, Google and Amazon have an edge because of the real time and constantly updated flow of information they have access to, but any company can emulate their model with forward thinking. Your CIO needs to be an integral part of business decision-making – not an afterthought. Any business that continues to look at technology as just another business tool is going to struggle.

The artificial intelligence revolution will transform business

Artificial intelligence is going to transform business and industry. Those that do not embrace it will quickly be left behind. Machine learning software can discover insights from massive amounts of data that simply would not be possible using traditional methods. These insights will drive business innovation and open possibilities we have not even thought of yet.

Amazon and Google are already operating with a business model that embraces artificial intelligence. The belief that technology exists to empower workers, but not to create innovation is an outdated concept that needs to be abandoned. Businesses that use artificial intelligence to analyze data and develop strategies will be the corporate leaders of the future.

Change the way you look at the corporation

Amazon and Google are looking at all possibilities to incorporate deep learning analysis in every facet of their business structure. It will become the central plank around everything they do – if it is not already. This is bound to lead them to create new branches that do not exist today. No business or industry is safe from this competitive threat.

The only way to remain competitive against these innovation leaders is to become more innovative. We need to rethink how we view the corporation and how it operates. In the next decade, the CIO will become the most important component in a firm’s success – with the possible exception of the CEO. Companies that fail to recognize this need for a realignment of their structure will continue to lose ground.

Using artificial intelligence to drive business success is already a common practice in many industries. Machine learning software is used for everything from recommendations of what to watch on your favorite streaming site, to what ads are displayed while you surf social media.

Human behavior cannot be controlled by artificial intelligence, but it can be understood by it. That understanding can lead to a greater focus on offering the right product or the right service to the right customer. Amazon and Google already know this, and it is time for everyone else to make the transition or risk being the victim of their next success.