What is diversification? Amazon diversifies and delivers food at home.

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Cuando escribo una nueva noticia, no me gusta que se quede en un mero post informativo, sino que prefiero aclarar, al menos de forma amplia, economic concepts or companies that are cited so that we can put ourselves in context and better understand the news.

In this circumstance, the concept that comes into play is that of business diversification:

What is diversification?

Well, all companies look for and investigate how to get competitive advantages, A competitive advantage es una característica que la compañía debe desarrollar para reforzar una posición ventajosa con respecto a sus competidores y de esta dinámica, increase its benefits.

For this, the company must track what strategies it will continue in the competitive, functional and business arena. We will talk about the first two in future posts.

Strategy corporativa, is therefore the one who understands the decisions of the company about which businesses to compete and in which sectors will it stop competing, that is, its scope of action.

When companies must make decisions about corporate strategy, they must make them in accordance with 3D: the vertical, the geographical and the horizontal, equally, we will talk about the first two in the future.

According to the horizontal dimension, the company has to choose in which sectors it will compete, that is, if it makes the decision to diversify.

Once our concept is framed, we can say that business diversification is about expanding the business wallet of a company offering new products or entering new markets.

Within this diversification, they are distinguished two different types:

• Related diversification: When there is some connection or link between the old and the new sector. As an example, when the apple company, dedicated to technological innovation, decided to diversify and open up to the world of mobile device telephony in 2007 (also the technology sector).
• Unrelated diversification: When there is no more link between companies than a financial link, that is, the origin of the resources. As an example, the TATA company that is dedicated to such disparate sectors, such as the cultivation of tea or the manufacture of automobiles. As we can see, they have nothing to do with each other.

What is the specific case of Amazon?

El caso de Amazon es un caso hard categorize since if on the one hand it consists of online commerce, a sector in which it is specialized, on the other, the product they offer are food, a sector in which until now they were not present, in my opinion, one could rather speak of a diversification not related.

Diversification that Amazon materializes in two different, but complementary services for its customers:

• Fresh amazon, a food delivery service, which enables customers to order their purchase and receive it in less than 24 hours. A service that can be enjoyed in Seattle since 2013 but does not reach Europe until September of this year, particularly Germany and Austria.

• Amazon Local, a kind of JUST EAT, that is to say, an online platform to which restaurants, for this case and for the moment, in Seattle "subscribe" and which puts them in contact with customers who are looking for already cooked food to be sent to them. at home. . Acting Amazon as a mere intermediary that puts customers in contact with restaurants and depending on the price as well as the shipping of the latter.

Maybe soon we will see these services derived from the sales giant to our country, even though by then I hope they already have their tax headquarters in Spain, and therefore we do not make a unfair competition against those companies that do comply with the legislation.