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Katrina Lake vs Jeff Bezos: Surviving Amazon

Published 04 Apr 2022
Reference 6720
Topic Strategy
Region North America
Summary

In 2011 Katrina Lake launched a new type of online retailing, Stitch Fix, a personal styling service based on a mix of human creativity and artificial intelligence, and grew it into a $3.6B company. Like many other successful retail businesses, it rapidly caught Jeff Bezos’s eye. And nothing good comes when Jeff Bezos notices you and decides to compete. After a first attempt to challenge Stitch Fix in June 2017 with Prime Wardrobe, Amazon unveiled Personal Shopper in 2019, a new service that worked similar to Stitch Fix. Will Bezos do to Lake’s Stitch Fix what he did to Barnes & Noble with books? Or will Stitch Fix be able to fend off the retail giant Amazon?

Teaching objectives

- Explain how looking across alternative industries and strategic groups gives the fresh perspective required to break out of competition and create a blue ocean of new market space. - Show that a well-established company, with its entrenched resources and capabilities, does not always win in competition, especially when competing against blue ocean market leaders. - Explore the difference between success and failure. Amazon has jumped into many attractive industries and competed intensely with existing players, and Bezos often wins. But he has also failed. This case looks at the commonalities across the companies Amazon didn’t succeed against to see whether Stitch Fix shares similarities with them. - Demonstrate defensibility. When a company offers unprecedented utility at low cost by shifting the value-cost frontier, buyers have no compelling reason to jump ship.

Keywords
  • Amazon
  • Stitch fix
  • Blue Ocean Strategy
  • Jeff Bezos
  • Reconstruct market boundaries
  • Retail
  • Artificial intelligence
  • Katrina Lake
  • Women in business
  • Imitation
  • Competition
  • E-commerce
  • Blue Ocean Shift
  • Personal shopper
  • Q2 2022