An article in today's (Sept. 27, 2016) Wall Street Journal, "Amazon's Newest Ambition: Competing Directly with UPS and FedEx," the paper reports that Amazon is creating its own delivery system in response to rising shipping costs. An interesting comment:
To constrain rising shipping costs, the online giant is building its own delivery operation, setting up a clash with its shipping partners...
Amazon’s goal, these people say, is to one day haul and deliver packages for itself as well as other retailers and consumers—potentially upending the traditional relationship between seller and sender...
Inside the company, executives describe, in the words of one senior official, how Amazon “is building a full-service logistics and transportation network effectively from the ground up.”
Amazon’s push into the shipping sector reflects a willingness among today’s powerful tech companies to defy the traditional constraints of business and leap into new ones.
This seems to be a departure from the business model that developed in the 1980s and 1990s, in which a business identifies and focuses on its core competencies and outsources everything else. https://www.caycon.com/blog/2012/10/focus-on-core-competencies-and-outsource-the-rest/
There has even been talk about outsourcing core competencies. http://www.supplychain-forum.com/documents/articles/Premus & Sanders.pdf
Goodness knows, the military has been accused of doing core competencies during the wars in Afghanistan and Iraq. https://www.brookings.edu/articles/outsourcing-war/
The government has pursued the outsourcing model (in its governmental way) for three decades now, and not without problems, as reflected in the misguided foray into "performance-based" contracting. Outsourcing has been administratively costly and time-consuming and has produced somewhat dubious results.
Does the article about Amazon and its comment about the willingness of powerful tech companies to defy traditional business constraints suggest that we might be witnessing the return of an old business model within some industries?
We've had the revolution. Are we seeing the beginnings of reaction? Has the cycle come full circle? Or are we just seeing a bold move by a bold entrepreneur, the kind of thing the government can't do.
Say, isn't the OFPP Administrator going to Amazon? Maybe some of you should check to see if she's accepting resumes.