Explain how amazon initial business model

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Reference no: EM133615413

Read the three articles about Amazon's cargo fleet and new air cargo fleet that are posted under the SR Assignments tab and linked below: Please type your answers to the questions in the space below and submit your response back to BB.

Article 1

Article 2

Article 3

Question 1: Briefly explain how Amazon's initial business model was an example of relationship specific investment. Specifically, how was the success of Amazon dependent on their partnership with the major cargo caries (UPS, FedEX, and USPS)?

Question 2: Considering your answer to question 1 above, how did this dependence make Amazon vulnerable to a possible "hold-up" problem? (Hint: think about how the major cargo companies could possibly exploit Amazon)

Question 3: Describe the main strategies Amazon has been implementing to mitigate their risk exposure to the main cargo companies.

Question 4: How does Amazon's investment into expanding its cargo and air fleets also serve as a credible commitment to its rivals? (Hint: think about what signal this is sending to rivals, and how this might help Amazon protect its role at the market.

Reference no: EM133615413

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