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    How AI Will Change Strategy

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    ANVESHI SHARMA
    The document discusses how AI will change Amazon's business strategy through a thought experiment involving 3 steps: 1) AI collects extensive customer data, 2) AI prediction accuracy improves to over 95%, allowing it to ship customers items it predicts they will want, and 3) This level of prediction forces Amazon to change its model from shopping to shipping, where it delivers items to customers before purchases. The document argues this new model would benefit Amazon by increasing customer loyalty and purchases. It concludes that companies must consider how rapidly AI could impact their strategies and develop contingency plans.

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    How AI Will Change Strategy

    Uploaded by

    ANVESHI SHARMA
    9 views12 pages
    The document discusses how AI will change Amazon's business strategy through a thought experiment involving 3 steps: 1) AI collects extensive customer data, 2) AI prediction accuracy improves to over 95%, allowing it to ship customers items it predicts they will want, and 3) This level of prediction forces Amazon to change its model from shopping to shipping, where it delivers items to customers before purchases. The document argues this new model would benefit Amazon by increasing customer loyalty and purchases. It concludes that companies must consider how rapidly AI could impact their strategies and develop contingency plans.

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    The document discusses how AI will change Amazon's business strategy through a thought experiment involving 3 steps: 1) AI collects extensive customer data, 2) AI prediction accuracy improves to over 95%, allowing it to ship customers items it predicts they will want, and 3) This level of prediction forces Amazon to change its model from shopping to shipping, where it delivers items to customers before purchases. The document argues this new model would benefit Amazon by increasing customer loyalty and purchases. It concludes that companies must consider how rapidly AI could impact their strategies and develop contingency plans.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pptx, pdf, or txt
    9 views12 pages

    How AI Will Change Strategy

    Uploaded by

    ANVESHI SHARMA
    The document discusses how AI will change Amazon's business strategy through a thought experiment involving 3 steps: 1) AI collects extensive customer data, 2) AI prediction accuracy improves to over 95%, allowing it to ship customers items it predicts they will want, and 3) This level of prediction forces Amazon to change its model from shopping to shipping, where it delivers items to customers before purchases. The document argues this new model would benefit Amazon by increasing customer loyalty and purchases. It concludes that companies must consider how rapidly AI could impact their strategies and develop contingency plans.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    Download as pptx, pdf, or txt
    of 12

    How AI Will Change

    Strategy
    : A thought Experiment

    Submitted by :
    Group 12
    Introduction
    ⬥ How AI will change strategy ?

    ⬥ AI is fundamentally a prediction
    technology

    ⬥ The trend is upward

    2
    Amazon’s Current Model
    ⬥ Visit the website/app
    ⬥ Shop for items
    ⬥ Place them in “Cart”
    ⬥ Pay for it
    ⬥ Amazon will ship it

    3
    AI in Amazon’s Current Model
    ⬥ Recommendation engine
    ⬦ AI predicts the items that
    might be bought by its
    customers
    ⬦ Accuracy is only 5%
    ⬦ i.e. 1 in 20 items would
    be purchased.

    4
    Thought Experiment: Amazon

    01 02 03

    Information Collection Prediction Improvement Major Change

    5
    Step 1: Information Collection
    Amazon AI collects information about us through:
    ⬥ Searching and purchasing behavior
    ⬥ Data found online
    ⬥ Social Media
    ⬥ Offline like our shopping behavior at any Retail
    Store

    It collects data not only about what we buy, but when


    we buy, where we buy, how we pay etc.
    6
    Step 2: Prediction Improvement
    ⬥ Amazon can increase its AI Prediction such that it
    crosses a threshold which will force Amazon to
    change its business model.

    ⬥ The prediction becomes so accurate that Amazon


    ships you the product it predicts you will need
    rather than wait for you to order them, this could
    be done weekly
    7
    Step 3: Major Change
    ⬥ Amazon’s AI will make it profitable for Amazon to
    change the business model from Shopping than
    Shipping to Shipping than Shopping
    ⬥ Investing in infrastructure for hassle free return

    8
    Benefits for Amazon
    ⬥ Customers won’t purchase from competitors as
    products are conveniently delivered to their home
    even before they buy them.
    ⬥ It nudges customers to buy items that they only
    considered but might not have gotten around to
    purchase.
    ⬥ In both the above cases Amazon gains higher
    share-of-wallet.
    9
    Key Insights from Reading
    Eventually they have to
    Impact of AI in
    1 business has turned 3 develop new strategy for
    their business or make
    out to be crucial profound changes in their
    existing model.

    Today company’s have to Top leading companies like


    2 invest more in AI , which
    they expect to be profitable
    4 amazon, GM are making
    early investment
    In future anticipating of future profits
    & expansion.
    1
    0
    Conclusion

    ⬥ Dilemma faced by strategists


    ⬥ How fast AI will affect their business
    ⬥ Develop a thesis about strategy options due
    to implementation of AI

    11
    THANK
    S!
    Submitted By:
    Group 12
    Anveshi Sharma MBA/06/009
    Cyriac Martin MBA/06/016
    Harshitha DP MBA/06/020
    Rahul G MBA/06/035
    S Anirudh Balaji MBA/06/038

    12

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