Case 5: Amazon vs. Wal-Mart
This case deals with E-commerce and who will ultimately dominate in the future: Amazon and Wal-Mart. When analyzing which firm may have the advantage over the other we must take a look at the value chain and competitive force models in relation to each company. First, with Wal-Mart, they have established themselves as a physical retail powerhouse where Amazon has always been an online retailer and has only been better known over the past years. In terms of overall sales, Wal-Mart destroys Amazon, but doesn’t have the same amount of power in terms of the E-commerce world just yet. One thing that separates Amazon by giving them a competitive advantage is their shipping plan. They can also support sales of other companies on their website which gives them an advantage over other E-commerce websites. Some of Wal-Mart’s competitive advantages include their ability to price their products at the lowest price, as well as replenish their inventory. Also, Wal-Mart has a robust website too with in-store pickup for free.
Next, management, organization, and technology factors have helped contribute to each of these company’s successes. First, Wal-Mart has made it possible for consumers to purchase things online, have them shipped to their nearest Wal-Mart for free, and then go through a drive-through like system to pick up their orders. Not to be outdone, Amazon began offering same-day deliveries and second day deliveries on Saturdays. Still though, Amazon does not have any storefronts.
As one can easily see these two companies clearly won’t give the other the edge in any aspect of E-commerce. Amazon’s business model is based on providing consumers a place where they can find practically every product they can think of without having to leave to purchase the item in a store, while Wal-Mart’s model is based on providing the lowest price possible, and gaining market share, both in physical stores and the web. Also, Amazon is...
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