"Pick up a book on sales, and it'll most likely tell you not to cannibalize existing product lines "
Current books explicitly advice to be willing to cannibalize, for example Jakki Mohr's (I took classes with her):
http://books.google.com.uy/books?id=8LJwaPuuQagC&lpg=PA8...
based on this paper: http://www.jstor.org/pss/3152166
I also took a course on Strategy, and it did endorse Amazon's strategy, by focusing on the shift from the traditional "choose a generic strategy" (as in Porter's framework) to developing capabilities (such as Amazon's logistics) and then entering sectors where you have said competitive advantages.
We also talked about umbrella brands, its pros and cons, it's by no means a given that extending is bad.
Some of your points are indeed presented that way (for example it's still common to recommend outsourcing), but others are now taught differently.
Uh huh. Problem is, the advice gets kind of fuzzy past the business 101 course:
* Pick up a book on marketing, and it'll tell you not to overextend your brand (like, say, from selling books to selling everything to website hosting to online video to making freaking computers).
* Pick up a book on finance, and it'll tell you to avoid investing heavily in depreciating assets (investors were calling for Bezos' head when they were building a massive distribution infrastructure in the late 90s; now Amazon is doubling down on server infrastructure, while most other players are selling it off).
* Open the finance book to another chapter, and it'll tell you to outsource things that aren't your core business competency (Amazon manages distribution centers, writes software, designs and builds computer hardware, builds datacenters, publishes books, delivers online video to your television...it even does its own packaging design!)
* Pick up a book on sales, and it'll most likely tell you not to cannibalize existing product lines by launching products in unproven new categories (like, say, manufacturing and selling e-book readers at a loss, when your primary business is the sale of physical books).
Amazon's moves only look obvious in hindsight. They've made a huge number of excellent strategic decisions that were roundly criticized by investors and business analysts when they were first announced.