Amazon has built 38 new fulfillment centres in North America and some in other countries such as Europe and India, and also smaller warehouses called “sortation centres” which allow Amazon to ship packages directly to customers. This is all in order to avoid the holiday delivery congestion.

Building sortation centres and new fulfillment centres will raise the efficiency of the company as the products can get to the customers much quicker at a lower cost. Additionally, it will have a positive impact on their reputation which they lost from late arrivals of packages. This action also shows that the company is considerate of their customers. Since Amazon is targeting much wider range of customers than most companies that focus on one field of industry, customers are one of the priorities they have to consider about.

Moreover, Amazon is also expanding its area of Fresh grocery service to New York city area. However, it might not be a good idea as it will make more competitors and also Amazon has a disadvantage for this as it is not well-known for the grocery service. In comparison, the company like FreshDirect has an advantage for this as it only focuses on this field and is known for this service. Expanding the field of business can give the company more opportunities but it can also give more threats and can be quite challenging.

Now they have 158 FCs around the world specifically in East Asia, India, Europe and of course North America, which increased their capacity of fulfillment. With this many FCs, Amazon would be able to deliver the packages much faster than before and would reduce the late arrivals. This coming Christmas would be the first challenge for Amazon to see if this actually works out well.

http://www.businessweek.com/articles/2014-09-26/amazons-grand-plan-to-avoid-holiday-delivery-snafus-again