Outstanding leadership is an often overlooked and undervalued driver of a business' competitive advantage. And with the pace of technological innovation accelerating, excellent leadership should only grow in importance in the years ahead. With that in mind, here are three CEOs who positioned their companies to win in 2015 -- and beyond.
Image source: Amazon.com.
Amazon CEO Jeff Bezos
Jeff Bezos has been the guiding force behind Amazon.com's (AMZN -1.64%) amazing ascent since he founded the company in 1994. After articulating his vision in his 1997 letter to Amazon shareholders, Bezos has remained steadfast in his long-term focus. Ever willing to sacrifice near-term profits to strengthen Amazon's competitive positioning, Bezos and his team have built a juggernaut that should continue to take share in the global retail arena for many years to come.
The e-commerce behemoth dominates online retail in the U.S and, increasingly, many other areas of the world. Its massive global distribution system, fast-growing Prime membership program, and army of third-party sellers combine to form a value proposition -- based on an unmatched selection of goods, low prices, and convenient shopping experience -- that rival retailers can't match.
Incredibly, Amazon's impressive retail operations may not be the most exciting part of its business. Amazon Web Services is quickly becoming the dominant force in cloud computing and a valuable driver of growth, with AWS revenue and operating income surging 78% and 431%, respectively, in the third quarter. Even better, Amazon executives believe that AWS can ultimately rival Amazon's retail business in size and scope.
While investors have come to respect Amazon's success, with the stock now trading near all-time highs after more than doubling in 2015, Amazon is yet to unveil its full earnings power as the company continues to invest heavily in its infrastructure and new business lines. That leaves plenty of long-term profits still to come for Amazon -- and its shareholders.
Image source: Facebook.
Facebook CEO Mark Zuckerberg
Like Amazon in online retail, Facebook (META -0.52%) has established itself as the dominant force in social media. With a platform that's used by more than a billion people on a daily basis, Facebook's reach is staggering.
The social-media giant is proving increasingly adept at monetizing its massive user base, with revenue rising 41% year over year to $4.5 billion in the third quarter. Impressively, Facebook's advertising revenue leapt 45% even as it reduced ad impressions by 10%, as Facebook enjoyed an increase of 61% in the average price of its ads. As Facebook works to improve its targeting capabilities to deliver more value to advertisers, it should continue to enjoy strong pricing power along with further gains in revenue and profits. Investors have begun to take notice, with shares soaring 35% so far in 2015.
Chairman and CEO Mark Zuckerberg founded Facebook in 2004 and is responsible for setting the overall direction and product strategy for the company. He leads the design of Facebook's service and development of its core technology and infrastructure. He's also proven to be quite the visionary as a capital allocator, as demonstrated by his $1 billion acquisition of the fast-growing Instagram photo-sharing network in 2012, which analysts now value as high as $37 billion.
More recent investments such as Facebook's $19 billion purchase of messaging app WhatsApp and $2 billion purchase of virtual technology company Oculus have yet to pay such impressive dividends. But based on Zuckerberg's success with Instagram, investors may wish to remain patient as Facebook unveils its monetization plans for these fast-growing properties.
Image source: Netflix.
Netflix CEO Reed Hastings
While far smaller than Amazon and Facebook, Netflix (NFLX -3.92%) is quickly becoming a global media powerhouse, with the online streaming pioneer projecting that its distribution network will span nearly every country on earth by the end of 2016.
The company that CEO Reed Hastings founded in 1997 as a DVD-rental-by-mail firm has grown into the leading Internet TV network. But in addition to being an aggregator and distributor of licensed content, Netflix has also become an award-winning creator of original content, garnering 34 Emmy nominations across 11 of its original programs and winning four in 2015. That strong performance combined with a renewed appreciation for Netflix's accelerated international expansion plans and forecast of "material global profits" profits beginning in 2017 has led Netflix's shares to more than double so far in 2015.
Hastings and his team have built a formidable competitive moat around Netflix, with its global content distribution system, popular original programming, and valuable data-collection cycle that allows it to effectively invest in shows with a high likelihood of success among its customers. As such, I expect Netflix to remain the primary beneficiary of the cord-cutting phenomenon, with the company -- and its shareholders -- poised to profit handsomely from the growth of Internet TV in the years ahead.
