Amazon needs a new direction if it wants to break into the healthcare industry.
Key details
Amazon appears to be angling itself for a new strategy as it continues its bid to purchase Signify Health.
Amazon announced on August 24 that Amazon Care would be shutting down after December 31, saying it isn’t “the right long-term solution for our enterprise customers,” according to Geekwire.
As we previously reported, Amazon has entered the bidding war for Signify Health, a Dallas-based analytics, and technology company, that is currently entertaining a buyout. Signify is expecting final bids by next week.
Amazon already purchased One Medical in July for $3.9 billion.
Why it’s important
Amazon may be taking the failures as a signal to shift away from building new companies and instead opting to buy its way into the healthcare industry, CNBC reports.
Healthcare is said to be a notoriously difficult industry to disrupt, and it has faced two major failures already in its attempts to break in.
“Chalk up another failure in health care for Amazon, one of the ultimate market disruptors. First, its much-hyped effort with JPMorgan and Berkshire Hathaway to reform healthcare, Haven, ended its short life. Now, Amazon Care, its effort to tackle telemedicine and primary care for the employer market on a national basis… is being shut down,” CNBC reports.
“The shutdown of Amazon Care may come back to a simple choice that companies, especially those with a lot of cash, have to make when it comes to breaking into new markets: build or buy?” says CNBC.
“Amazon’s decision to shut down its health startup Amazon Care could signal a shift in its health care strategy. The retail giant’s recent acquisition of One Medical and rumors of its interest in Signify Health indicate Amazon is more interested in buying existing health care companies than building new ones from scratch,” says LinkedIn News.
Notable quote
“Buying into a market where it wants more share and where it requires a physical presence isn’t new to Amazon, nor is being opportunistic in the timing. As Amazon’s acquisition of Whole Foods reaches the five-year mark, it’s worth remembering that Amazon’s shares went up in value as much on the day it announced the acquisition of Whole Foods as the purchase price for the then-troubled high-end grocer,” says CNBC.