Amazon’s profitless path

An interesting comparison between Tesco and Amazon that provides some “food” for thought! 

It is worth considering the impact of reinvestment in infrastructure to finance growth, Amazon’s cash being used to improve deliveries and Tesco’s to open new smaller stores that offer a reduced range of produce at higher margins. Ultimately this should increase long term revenues and profits. 

Notice too, Amazon’s diversification into phones, tablets and TV with Tesco’s shift to creating their own tablet et al. 

There are some strong correlations between Tesco and Merchants, spend some time reflecting on the similarities between these two companies and how the points identified above could appear in your exam.