# Class 10: Amazon Supply Chain Dominance (🚚)
*Aug 5, 2025 | [Transcript](./🦦/10scmnd(amazon)15778_intro_ops_otter_ai.md)*
## 🎯 Teaching Arc
**Hook**: "Amazon owns 40% of US e-commerce with 1% of retail space"
**Puzzle**: How compete without physical stores everywhere?
**Resolution**: Virtual pooling > physical distribution + data advantage
**Model**: Network effects + rapid delivery infrastructure
## 🗣️ Quality Participation
**[Student]**: "Amazon curates products better"
- Prof: "I like where your head is heading"
- Impact: Led to data advantage discussion
**Key Insight**: ⭐️High conviction from day 1
- "Founders obsessed (Elon, Jeff) - long term plans, no detail is small"
- Amazon terrifying due to conviction + long-term execution
**Supply chain variables discussion**:
- Location, suppliers, promise time, routing
- Prof: ⭐️"May be better to classify before eliciting answer"
## 📊 Quick Scores
Focus on students who:
- Connect strategic vision to operations
- Identify non-obvious competitive advantages
- ⭐️Remove confounders (TEMU) from discussion
## 🔗 421 Diagrams
### Amazon's Model
```
🟢 Data/algorithms 🟣 Everything buyer
One-click checkout Convenience
\ /
Coordinate ←→ Compel
/ \
🟠 Customer lifetime 🔴 Selection + speed
Network density Reviews prevent paralysis
```
### Walmart's Response
```
🟢 4,700 stores 🟣 Value shoppers
Grocery strength Omnichannel need
\ /
Coordinate ←→ Compel
/ \
🟠 Leverage stores 🔴 2-hour delivery
as warehouses Click & collect
```
## 📚 Exam Essentials
**Concepts**:
- Centralized (pool risk, economies) vs Decentralized (speed, local)
- Last-mile liquidity is expensive
- Stores as fulfillment centers (Walmart advantage)
**Amazon's Moats**:
1. Assortment breadth
2. Customer data → curation
3. Subscription lock-in
4. Delivery infrastructure
**Walmart Strategy**: "More money than time" - invest in speed using stores
**Traps**:
❌"Small changes move consumers"
✅"Need dramatic improvements to shift behavior"
## 🎓 Recitation Points
- "Amazon bought Whole Foods (2017) for last-mile"
- "Distribution centers → close to city as possible"
- "Walmart partnered with Chile for tech"
- "Price, assortment, experience, speed = competitive dimensions"
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