I recently stumbled across this blog regarding Amazon’s plan to haul and deliver packages for both itself and other retailers/consumers. By taking over logistic operations, the online retailer’s ambitious goal would not only eliminate all dependency for carriers like UPS and FedEx, but also add a service that can directly challenge the courier titans.

Amazon’s plan piqued my interest due to the striking similarities it shares with Michael Dell’s groundbreaking direct business model. By managing its own logistics, Amazon will be able to add delivery capacity, which will be particularly crucial during peak seasons like Christmas. Furthermore, by “cutting out the middleman”, Amazon will save over $4 per delivery, which approximates to $1.1 billion per year. With that being said, I believe the most important benefit comes from the ability to develop a connection with customers. Like Dell’s model, by managing it’s own deliveries, Amazon will effectively end its traditional relationship with buyers. Customer communication will be enhanced and as a result, assist the company in improving the entire shopping experience – from the moment the “place order” buttons are clicked to the moment packages arrive at front doors.

Having recently learned about business strategies, I’ve gained further appreciation of Amazon’s ability to consistently seek out and exploit a competitive advantage. Rita McGrath believes that strategies are transient, and companies must always start new strategy initiatives. Once only known as an online bookstore, Amazon’s expansions into e-commerce, and services such as cloud computing and video streaming have all been a testament to its perpetually evolving business strategy, and this new courier venture shows that “complacent” certainly isn’t a word in the online retailer’s dictionary.

Will Amazon be able to rival long-time empires like UPS and FedEx? Only time will tell. However, regardless of the outcome, Amazon’s willingness to launch new business strategies was and will continue to be the key to its success. As the great Franklin D. Roosevelt once said, “It is common sense to take a method and try it. If it fails, admit it frankly and try another. But above all, try something.”

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Sources:

Bensinger, Greg. “Amazon’s Newest Ambition: Competing Directly With UPS and FedEx.” The Wall Street Journal. Wsj.com, 27 Sept. 2016. Web. 02 Oct. 2016.

http://truckerslogic.com/amazon-building-their-emi-truck-fleet-signals-bigger-changes-ahead/

http://www.huffingtonpost.com/2014/04/24/amazon-delivery-lasership_n_5193956.html