Question

Select a current news article from a magazine, newspaper or Internet concerning fraud, internal controls, the Audit profession, accounting or business decision-making.

In your own words, summarize the article indicating the facts of the story. What happened, who, when, where, how much…details provided in the article. If additional information is needed to understand the situation, that can be gathered from other sources.

What is your opinion on the news? This is when you give your thoughts about what happened or the situation. For example, you may explain why this article interested you or if you have any personal experience related to the article. These are your views and not the authors. Do you think something could have or should have been done differently? The opinion section will vary with the type of article selected. The objective is to express your own views.

Answer 1

Recently FedEx couriers announced that they are not renewing their contract with online retail giant Amazon for their express delivery service to its customers. The decision was taken due to the buildup of express delivery network on its own by Amazon. Amazon has developed its own network of delivery centers and fleet of airplanes to deliver the products in shortest possible time. This network has brought FedEx as a competitor for its own business from its own client. Currently FedEx earns only 1.3% of its revenue from Amazon. The decision taken by FedEx was also based on its strategy to focus on other e-commerce based companies which intend to provide express delivery services. One such potential client is Walmart which has started of its own same day delivery service and has opened around 500 FedEx collection points in its stores.  The aim of FedEx is to tap into the ever growing market for courier delivery and not just stand along with Amazon which is busy in building up its own network. FedEx expects that the daily parcel capacity will increase to 100 million per day by the year 2026. Also the company wants to tell other e-commerce players that now it has freed some capacity to serve them as well.

This article from NY times is based on the strategic decision making capacity of businesses to take the right decision at the right time. Here we can see that FedEx is trying to gain more ground with Walmart which is beefing up its capacity as an online retailer to compete with Amazon. Over here we see that Amazon is trying to create each and everything under one umbrella for its online business. It would have been better for the online retailer to keep associated with the FedEx and focus on its main business. In case of slow business this delivery network might come in as a burden for the organization. FedEx has just made the right move to steer clear of the self generated competition strategy by its own client. Thus it is a very good business decision which will benefit FedEx in the long run to grow its business manifold.