Amazon Bets Big On Faster Shipping

Amazon Bets Big On Faster Shipping

November 15, 2019

Amazon spent $1.5 billion to improve its transportation and warehouse infrastructure and increase its inventory to cut its Prime shipping from two days to one.

The next-day delivery investment has brought benefits, including new record sales, improved revenue growth, increased warehouse and shipping staff, and happier customers. However, shipping costs have also increased 46% in the company’s second quarter.

Investors are overall optimistic about the outlay, but Amazon’s recently predicted weak holiday demand, which has raised some concerns.


Video Spotlight: Amazon’s profit falls due to same-day delivery costs, and other top business news


This post is based on the CNET article, Amazon’s next-day shipping ambitions are costing it a fortune, by Ben Fox Rubin, October 25, 2019, and the YouTube video, Amazon’s profit falls due to same-day delivery costs, and other top business news, by CityNews Toronto, October 25, 2019. Image source: Daniel Grizelj/Getty Images

Discussion Questions:

1. Is Amazon’s one-day Prime shipping a strategic capacity decision?

Guidance: Yes – it enables Amazon to meet customers’ demand for next-day delivery, increases operating costs, reflects a long-term commitment to e-business, and enables competitiveness in e-retailing.

2. What investment did Amazon make to cut its Prime shipping from Continue reading

Facebook
Twitter
CostCo Vertically Integrates to Manage Rotisserie Chicken

CostCo Vertically Integrates to Manage Rotisserie Chicken

October 24, 2019

Costco is planning to vertically integrate by owning production of 40% of its rotisserie chicken supply chain.

Vertical integration is an effort to keep the price at $4.99 to attract customers.  The issue is that the main chicken suppliers are producing fewer whole birds, down from 50% of the supply in the 1980s to just around 15% of the supply today.

Bird size has also increased as the demand for chicken has increased.  Most whole chickens today are too big to fit on the Costco rotisserie production equipment.  Costco needs 6 pound birds and the typical whole chicken is now 7-8 pounds from suppliers.

Costco can control the size of the bird and plans to cut costs per bird by 35 cents by developing their own poultry complex.


Video Spotlight: This Is Why Costco Only Charges $5 For A Rotisserie Chicken


This post is based on the CNN article, Five things to know about Costco’s $4.99 rotisserie chickens, by Nathaniel Meyersohn, October 14, 2019, and the YouTube video, This Is Why Costco Only Charges $5 For A Rotisserie Chicken, by Mashed, February 5, 2019. Image source: Uwe Starke/Image Source

Discussion Questions:

1. After reading Continue reading

Facebook
Twitter
Climate Change Is Changing Agriculture

Climate Change Is Changing Agriculture

In agriculture, adapting to climate change has become a necessity.

As weather patterns change around the globe, growers are learning to adapt in different ways. Some can afford to partner with scientists and plant experimental trees; others are forced to change their crops. For farmers, transitions to new product designs and operations are costly, and the viability of these transitions is as uncertain as the weather itself.


Video Spotlight: Growers Fighting Climate Change


This post is based on The New York Times article, In a Race Against Warming, Growers Try to Outsmart Climate Change, by M. Cone, September 21, 2019, and the YouTube video, Coffee Growers Combat Climate Changeby GreenTV, May 11, 2012. Image source:  Shutterstock/Valentyn Volkov

Discussion Questions:

1. What are the effects of climate change on agriculture and farmers’ lives?

Guidance: During warmer winters, there have not been enough chilly days for male trees to produce the pollen when female trees need it. Pests and diseases have increased. Extreme, sudden temperature changes have killed mature trees. Extreme heat waves and droughts have decimated crops and cattle. The effects of climate change on farmers’ lives are not negligible either: reduced income, increased Continue reading

Facebook
Twitter