downtown2007 wrote: ↑Dec 11, 2017
So how does this translate to STL’s chances on getting AMZN?
I think Amazon is building its business operations by expanding horizontally, picking up new businesses that fall outside of their original mission and strategy. They started first as a bookstore and grew to sell anything and compete straight-up with Walmart, but they’re also a TV network, movie production company, cargo airline, search engine, and offer about 50% of domestic web hosting services. When they acquired Whole Foods, they became a boutique retail grocer. Looking ahead, they’re considering healthcare. They are talking a lot about medical devices, including some chatter last week about dental. They could enter pharmaceuticals, and the best way to do that is with PBM. The data metric intake would be a gold mine of information. Rather than recreating the wheel that is PBM, I think we could see partnership or consolidation with Express Scripts. This comes as the healthcare industry is seeing consolidation between sectors, such as CVS and Aetna. Now, Express Scripts may partner with another healthcare company like Humana, but I think they’d rather partner with the giant sales company that is Amazon. This partnership can range from something that would operate as a joint venture all the way to an acquisition, with HQ staying in STL because moving it would be unwieldy.
Now, should something like this happen, it doesn’t in and of itself mean STL gets HQ2. Still, I believe that Amazon’s interests in building HQ2 involve not just picking a city that can host a tech company but also one that has an attractive company for acquisition. My theory is that a candidate city for HQ2 becomes far more attractive if they have a potential acquisition target for Amazon’s expansion strategy, and maybe it’s the bigger the better. Amazon already has acquired Whole Foods, which I think gives them a foothold in Austin. Cincinnati’s my “sleeper” play for HQ2: in addition to their airport being the hub of Amazon Prime Air, they also are home to Federated Department Stores, which could be one hell of an acquisition candidate. Let’s see how Macy’s does this Christmas season. As for STL, I think they’re interested in working with Express Scripts, and it could be the lure that brings HQ2 to the City.
Meanwhile, it may only be a matter of time, say 5 years, before DOJ steps up with questions of “antitrust” for Amazon as they continue to dominate more industries. Should this happen, it would behoove them greatly to already have a secondary HQ to house certain operations outside of Seattle just in case they have an antitrust issue to address, such as where their acquired targets already are operating and have since built up infrastructure. Until then, it’s time for them to continue expanding by acquiring companies in industries that can recognize increased capabilities through partnership with Amazon’s strengths, from online retail dominance to shared digital consumer shopping behavior and related data sets.
Rewatch Moorlander’s video link. I don’t think a CEO says “partnership” out loud just to hear his own voice.