Who's the world's top retailer? Walmart and Amazon duke it out?

1. WHO’S THe WOrld’S TOp
Retailer? Walmart and
Amazon Duke it out
Prepared by,
ANITHA THOMAS
VEENA R NAIR

3. SUMMARY OF THE CASE STUDY
 Walmart is the world’s largest and most successful retailer, with $476 billion in 2014
sales and nearly 11000 stores worldwide. It also ranks number 1 on the fortune 500 list of
companies.
 Today Walmart’s greatest threat is Amazon. Amazon sells everything people want to
buy including DVDs, video game, electronics, apparel, furniture etc .For many years
Amazon been the leader in online retail and now the world’s largest e-commerce
retailers.
 Six or seven years ago, only one-fourth of all Walmart customer shopped at
Amazon.com, but today half of Walmart customers says they’ve shopped at both
retailers. Online competition from Amazon has become too tough for Walmart. The
main reasons are;

4.  Walmart’s traditional customer who are primarily bargaining hunters making less than
$500000 per year are becoming more comfortable using technology
 More affluent customers started shopping at Walmart during recession is returned to
Amazon as their finances improved.
 Amazon started stocking merchandise categories that Walmart traditionally sold, such as
apparel and its revenue is growing faster than Walmart.
 Amazon shipping costs are lower than Walmart’s ranging from $3 to $4 per package

5. Q1. Analyze Walmart and Amazon.com using the competitive
forces and value chain model.

6. WALMART VALUE CHAIN
Walmart value chain includes,
1. FIRM INFRASTRUCTURE
 Close connection between headquarter and local stores.
2. HUMAN RESURCES
 Based on interaction practices between company and employees.
 Employees are getting competitive wages and competitive benefits.
 Almost 60% of all managers in Walmart stores started as hourly associates.
 Every time we open a supercenter, we provide roughly 300 jobs.

7. 3. TECHNOLOGY DEVELOPMENT
 It constitutes a competitive advantage against competitors.
 Computer based technology
 POS System
 Satellite system
 EDI.
4. PROCUREMENT
 Walmart deals directly with manufactures by passing all intermediaries.
 Manufacturer-Walmart- customers.

8. It includes the primary activities are,
1. INBOUND LOGISTICS
 Vendor managed inventory
 Continuous replenishment
2. OPERATIONS
There are 3 business segments they are;
 Walmart stores like super centres, discount centres and neighbourhood markets.
 SAM’s Club
 Walmart international
3. OUTBOUND LOGISTICS
 Hub and spoke distribution system.

9. 4. MARKETING AND SALES
 Word of mouth communication.
 Focuses on everyday low prices
 Sales are on self-service, cash and carry basis
5. SERVICE
 Accepting returned goods.
 Focus on customer services
 Bank credit programs are also available to customers.

10. WALMART PORTAL FIVE FORCE MODEL
RIVALRY
HIGH
BARRIERS OF
NEW
ENTRANT
MEDIUM
BARGAINING
POWER OF
CUSTOMER
LOW
BARRIER OF
SUBSTITUTE
LOW
BARGAINING
POWER OF
SUPPLIERS
LOW-MEDIUM

11. AMAZON VALUE CHAIN
It includes the primary activities are those needed to produce a product or service for the
end customers. These activities include;
1. INBOUND LOGISTICS
 Receiving goods from suppliers, and storing and moving those good.
2. OPERATION
 Manufacturing and assembling the product.
3. OUTBOUND LOGISTICS
 Sending the goods to wholesalers, retailers or directly to the end customers.
4. MARKETING AND SALES
 Marketing involves understanding customer needs, communicating those needs and
promoting the end products.

12. 5. SERVICE
 Involves after-sales support
 Support activities help to facilitate or assist the primary activities of
producing product;
6. PROCUREMENT
 Purchasing raw material and other items used in operations.
7. HUMAN RESOURCE MANAGEMENT
 Recruiting, hiring, firing, training, developing and compensating.
8. TECHNOLOGICAL DEVELOPMENT
 Research and development process automation, software, hardware,
equipment etc. to support operations.
9. INFRASTRUCTURE
 It may include accounting, legal, finance, planning, public affair,
government relations, quality assurance and general management.

13. AMAZON PORTAL FIVE FORCE ANALYSIS
RIVALRY
HIGH
BARRIERS OF
NEW
ENTRANT
LOW
BARGAINING
POWER OF
CUSTOMER
HIGH
BARRIER OF
SUBSTITUTE
HIGH
BARGAINING
POWER OF
SUPPLIERS
MEDIUM

14. Q2. Compare Walmart and Amazon’s business models and
strategies?

15. Amazon
Business Model
 Expansion to other segments.
 Amazon provides the web service
called Application programming
interface.
 Use a makeover to face a snazzier
shopping experience.
Business Strategy
 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 expenses of
profitability

16. Walmart
Business Model
 E-business and B2B implementation.
 Pull model supply chain
management.
 Rapid replenishment system helps to
accurate purchasing forecast and
reduces costs.
 New standard E-commerce business
is established.
 New generation of EDI-AS2
Business Strategy
 Walmart has steadily increase investment in
online business
 A pay with cash program enables customer
without bank account to order the product.
 Improving the link between store inventory,
website and mobile phone.
 It offers a wide variety of quality goods at
lowest possible price, guaranteed
satisfaction.
 The Walmart logistic team uses an internal-
based transportation link system to help
them to move goods.

17. Q3. What role does information technology play in e ach of
these business? How is it helping them redefine their
business strategies?

18. WALMART
 The world’s largest private cloud computing centers increasing 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 like order item online, no shipping fees etc.
 Improving links between its store inventory, websites and mobile app orders online,
pick up items at store without waiting in line.
 Walmart’s website monitors prices at other retailers.
How it refines strategies
Traditional , offline, The world’s biggest Omni channel
physical store retailer

19. AMAZON
 Best smart phones platform: Purchase products and service online
 Grocery offering 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.
 Increase the number of order fulfillment centers: offer same day delivery purchase.
How it refines strategies
Online retailer The world’s largest e-commerce retailer

20. Q4. Will Walmart be successful against Amazon.com?

21. Both Walmart and Amazon are equally successful
Amazon Walmart
The world’s largest and most powerful
online selling machine.
It has a massive warehouses and physical
store in different part of the world
No physical stores to service its customers,
but it now has more than 100 warehouses
Improve its online presence
Supply chain of Amazon is optimized to
online commerce that Walmart just can’t
match
Huge investment in its online business,
spending more than $300 million

22. THANK YOU