Amazon's Air Force Opportunity

For some time now, Amazon has been discussing and exploring the idea of developing their own shipping and logistical services.  For some, this seemed like an unattainable idea for Amazon and refused to be accept this as a credible potential infringement on their business.  These doubters were conveniently two of Amazon’s biggest “suppliers”, UPS and FedEx.  These two shipping giants supply a service to Amazon by shipping a large portion of Amazon’s orders through their respective networks.  In many ways Amazon has had to depend on their business as much as they have had to depend on Amazon’s.  When reviewing the “Environmental Threats as Opportunities” portion of this chapter, I immediately identified Amazon’s efforts towards becoming their own shipping and logistical supplier as a way of neutralizing the threat of their suppliers. 

Amazon seems to have identified an opportunity where they can become their own supplier of shipping and logistical services in order to reduce the uniqueness of their current shipping suppliers.  According to the article below, Amazon is utilizing backward vertical integration by leasing freighter aircraft in order to operate independently of their suppliers.  Amazon also understands that the current state of the shipping industry is formed somewhat as an oligopoly, dominated by only 2 independent companies.  By developing this strategy to become a shipping supplier of their own, they could reduce their own threat of suppliers while also be seen as an additional supplier option within the shipping industry.  While the short term goal would be to become their own supplier and reduce the threat of suppliers, the long term threat would be to build an industry leading shipping supplier.  Contrary to what FedEx and UPS think, if we’ve learned anything from Amazon it’s that you don’t doubt their strategy.  As time goes by, this threat seems to becoming more and more credible. 

https://techcrunch.com/2018/12/21/amazon-air-expands-with-10-more-cargo-aircraft-bringing-fleet-to-50-planes/