Amazon Invades

Previously in this space we have discussed the ethical issues associated with Amazon, and specifically in the harm they can do to local businesses and the stakeholders associated with those companies. No reasonable person is going to argue that a successful business model should be suppressed just because it gives its inventor a competitive advantage – that’s the whole point of having a business strategy in the first place – but any business that destroys other employers, bankrupts potential customers, and eventually eradicates entire population centers in which it has no operations of its own is not a sound business model. Even if there are no government sanctions or consumer boycotts taken against such a company, eventually it will eliminate enough potential customers to destroy itself, and who’s even mentioned monopoly effects yet?

Several factors have helped to prevent Amazon from reaching that critical mass, the most important one being the tendency of people to wait until the last moment to purchase things. Even with overnight shipping it is still faster to go to a real-world retail outlet to make a purchase, and you also avoid the issues of breakage during shipping and the shipping costs themselves. But what would happen if Amazon expanded its network of distribution centers, purchased its own fleet of trucks, and started offering delivery straight to your door on the same day – and at rates comparable to what you would spend at a brick-and-mortar retailer for the same product?

A number of online news sources have been reporting recently on Amazon’s plans to open new distribution centers and/or expand existing facilities in Texas, California, Virginia, and New Jersey, and increase the number of delivery vehicles available in each of these locations. With the right logistic arrangements and a modern mechanized warehouse system those four locations alone would given them the ability to deliver to anywhere in the Philadelphia – New York Corridor, anywhere from Baltimore through the Carolinas, any of the major Texas population centers, and anywhere from San Francisco to San Diego in the same business day. The only remaining questions would appear to be whether Amazon can operate such a system efficiently enough to remain competitive with existing real-world retailers, and whether we feel that this type of operation is any more ethical than their existing business model…

Employing their own distribution center workers, truck drivers, maintenance people (mechanized warehouses and fleets of trucks both require lots of maintenance) and support units will require Amazon to employ hundreds (or thousands; depends on who you ask) of local people, and purchasing electricity, diesel fuel, food and drink, and anything else they have to get locally will make Amazon part of your local economy, and those profit centers will contribute to the local tax base. Having an Amazon delivery center in your community shouldn’t be any different from having a Wal-Mart distribution center or any other kind of major warehouse operation there, and at least some of the benefit will remain there instead of going off to some corporate headquarters many hours away. But, as is the case with Wal-Mart, Target, or any other large retailer, we still have the issue of how this will affect local businesses…

Having your employer go under because Amazon built a real-world delivery center nearby isn’t functionally different from having it succumb to Wal-Mart or CostCo, or simply implode under the rotten economy; either way you’re still unemployed, angry, and unable to purchase anything even if you wanted to. Having local distribution centers will not change the fact that Amazon is still wiping out small businesses; if anything, being faster and more convenient will only make Amazon’s inherent menace that much more dangerous. All of which leads me to believe that we will be revisiting this issue again soon if Amazon goes through with these plans…

Whether we want to or not…

Be True to Your School

No, this post is not intended as a reference to the Beach Boys song of the same name, although it sometimes seems that the band members understood the idea better than a lot of people who are actually in the Education business do. I refer here to the community involvement – and community loyalty – that pervade the relationship between Michigan State University (hereinafter MSU) and the Greater Lansing, Michigan, area. One expects the area immediately adjacent to a major university campus to cater to the students who attend the school, since they represent a major customer group. You would therefore expect to see school colors in evidence, and some school-themed business units, at least within walking distance. But this is not always the case, and the contrast between Greater Lansing and some other major university towns I have visited deserves a closer look…

As you travel around East Lansing itself, you are almost immediately struck by the pervasiveness of MSU colors and symbols. Banners featuring the school’s green and white (most often a white “S” on a green field, or a green “S” on a white field) fly from homes, retail stores, restaurants, gas stations, and other locations all over town, including many with no obvious connection to the University. Even the local McDonald’s franchise nearest the campus is painted green and white, instead of the company’s more common brick and brown tones. The commercial district just north of campus (along Grand River Avenue) contains the usual number of stores featuring green-and-white merchandise and other MSU-related products, but even at distances that students would not normally travel one is likely to find businesses with an MSU theme…

This stands in start contrast to the area around UCLA, to take the obvious example. There are a few places in Westwood Village itself that feature blue and gold colors and products, but even during Homecoming week it is highly unusual to find banners or flags flying, and there certainly aren’t any fast-food operations painted in Bruin colors. The same is true of Westchester, California, where you will find no businesses tying into the presence of Loyola Marymount University, or Malibu, where there are no obvious connections to Pepperdine, or for that matter Downtown Los Angeles, where you will only find references to USC if you look for them very carefully indeed…

Now, in fairness, this is partially because of the very fact that the Greater Los Angeles area is home to at least 20 institutions of higher learning (it depends on how you want to count them – and how you define Greater LA), not one huge university that dominates the landscape. But much more to the point is the way in which people in the Lansing area take pride in “their” school (whether they attended it or not), and the way in which MSU is part of the local landscape – providing jobs directly, consulting with local businesses to increase productivity and with local government to develop and preserve jobs, training medical, veterinary, educational and management personnel, and providing a focus for local interests ranging from agricultural innovation to college sports. If the people in Greater Lansing are good to their school, it is only fair to say that having MSU here has been very good for the people of Greater Lansing…

Which raises the obvious question of why other institutions are not as involved in their communities as this one. Is it simply the nature of the big city; the tendency to mind your own business, not get involved, and look out for “number one?” Is it the arrogance of big city leadership, believing that they are too wealthy, too important, or too powerful to let a bunch of “ivory tower” types tell them what to do? Is it the lack of a sense of community common to the big city sprawl, which makes the people who live there reluctant to become part of anything beyond their own interests? Or is it something lacking in other universities (or their management teams) that places less importance on community involvement than this institution does?

So far, I have no answers for any of these questions. But my initial impression, that I chose well when I decided to make this school My School, is growing stronger…