There are principles of strategy when it comes to business, cost leadership and product differentiation; product differentiation will be discussed in next weeks blog. Cost leadership strategy is when a firm focuses on gaining a competitive advantage through keeping its economic costs down for producing product.
In Amazon’s case they don’t actually produce product but rather offer and distribute on a global scale through supply chain channels. The main advantages that Amazon has over typical brick and mortar stores while keeping costs low are by operating from massive warehouses and powerful processing capabilities; a physical economy of scale.
Amazon Republic 