Chapter 10 case study: Walmart and Amazon duke it out for e-commerce supremacy

1. Chapter 10: CASE STUDY
Walmart and Amazon Duke It Out for E-commerce Supremacy

2. INTRODUCTION
4 QUESTIONS
CONCLUSION

3. • Walmart is the world’s largest and most
successful retailer
• Walmart’s facing the greatest threat which is
Amazon.com
• Amazon has changed the habits and
expectations of consumers
• Push model → pull model
INTRODUCTION

4. • Amazon has developed extensive warehousing
facilities and an efficient distribution network for
web shopping.
• Walmart is a more recognizable brand than
Amazon (lowest price, flexibility)
• Walmart has increased its investment in online
business
INTRODUCTION

5. STRATEGIES
The best of both worlds
• e-commerce
• physical stores
• Expand its selection
of goods
• Build warehouses
closer to urban
centers
• Expand same-day
delivery services.

6. 10.15
Analyze Walmart and Amazon.com
using the competitive forces and value
chain models.

10. Wal-Mart The Five Forces Model
Rivalry
High
Power of
Substitutes
Low
Bargaining
of
Customers
Low
Barriers to
entry:
Medium
Bargaining
Power of
Suppliers
Low-
Medium

12. Amazon - 5 Forces ModelAmazon The Five Forces Model
Rivalry
High
Power of
Substitutes
High
Bargaining
of
Customers
High
Barriers to
entry:
Weak
Bargaining
Power of
Suppliers
Medium

13. 10.16
Compare Walmart and Amazon’s business
models and business strategies.

14. Business model Business strategy
Wal-Mart
+ E-business and B2B implementation
+ Revolutionary supply chain management -
“pull” model
+ The business decision to decentralize the
procurement process
+ Rapid replenishment system + accurate
purchasing forecasting → reduce overall costs.
+ New standard B2B E-commerce
establishment
+ New generation of EDI - AS2
+ Lead on Price
+ Invest to differentiate on
Access
Amazon
+ Expansion to other segments
+ Business-to-Consumer (B2C) to a mixed
model
+ Amazon marketplace – Amazon's answer to
eBay
+ Amazon's Associate Program
+ Amazon Web Services API (application
programming interface)
+ Use a make-over to make for a snazzier
shopping experience.
+ Overall cost leadership
+ Attract new customers and
keeps its old ones by offering
low-price shipping through its
Prime annual subscription
+ “Grow fast, even at expense
of profitability”

15. 10.17
What role does information technology
play in each of these businesses? How is it
helping them refine their business
strategies?

16. • The world’s largest private cloud computing centers:
increase the number of items available for sale on
Walmart.com from 1 million three years ago to 10
million today.
• Smart phone app: order items from Walmart.com.
• New subscription service: order items online, no
shipping fees.
• Improve links between its store inventory, website, and
mobile phone apps: order online, pick up items at
stores without waiting in line.
• Walmart’s website monitors prices at other retailers.
WALMART - The Role Of It

17. Traditional, offline,
physical store
The world’s
biggest
omnichannel
retailer.
WALMART - How It Refines Strategies?

18. • Better smart phones’ platform: purchase products
and services online wherever they are.
• grocery offerings, with Amazon Prime, Prime Now,
Prime Pantry, and Amazon Fresh: offer delivery
times as short as an hour in some cases.
• Amazon’s Alexa voice-controlled digital assistant.
• Mayday: offer one-tap access to customer service
agents.
• Increasing the number of order fulfillment centers:
offer same-day delivery of purchases
AMAZON - The Role Of It

19. Online retailer
The world’s
largest e-
commerce
retailer.
AMAZON - How It Refines Strategies?

20. 10.18
Will Walmart be successful against
Amazon.com?

21.  Massive warehouses.
 Improves its online presence.
 Huge investment in online
business.
The world’s largest and most
powerful online selling machine
 No physical stores to service its
customers, but it now has more
than 100 warehouses.
 Working on expanding its selection
of goods.
a supply chain optimized for online
commerce that Walmart just can’t
match.
EQUALLY SUCCESSFUL

22. CONCLUSION
The epic battle between
Walmart and Amazon:

23. The success of both Walmart and Amazon.com
The wide
variety of
products
The success of both Walmart and Amazon.com

24. The success of both Walmart and Amazon.com
The wide
variety of
products
Fast delivery
and low prices
Satisfying their
customers
needs
The success of both Walmart and Amazon.com