CHAPTER EIGHT
MERGERS AND ACQUISITIONS
Why did Amazon buy Zappos, the online shoe and apparel store, in 2009? It wasnât primarily for the shoes; Amazon already owned a shoe site called Endless.com. It wasnât primarily for the existing Zappos Web interfaceâEndlessâs interface was at least as attractiveâor the cash flow. Zappos was a ten-year-old company with a loyal following, but it was barely profitable.
The acquisition wasnât really for assets at all. It was for the capabilitiesâand, in particular, for the contribution Zappos would make to Amazonâs own capabilities system. The Zappos case is a clear example of the main point of this chapter: the companies that create the most value combine organic growth with mergers and acquisitions ...
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