Tuesday, March 20, 2012
Why did Amazon buy Kiva?
I'm quite intrigued by the announcement that Amazon is acquiring Kiva Systems. Kiva makes bright orange robots that operate in distribution centers to fulfill orders. Why does Amazon want to vertically integrate in this way? Clearly, distribution is a key capability at Amazon. Thus, they may be acquiring key knowledge and competences. On the other hand, why lock yourself into this particular warehouse solution? Will Kiva truly be better off within Amazon as opposed to being independent, or part of a logistics firm? Moreover, how will other retailers react to the fact that they will be buying the robots from a direct competitor? The deal raises many questions. Stay tuned as we should hear much more about Amazon's rationale for the deal in the days ahead.