Amazon vs. Walmart: Which Giant Will Dominate E-commerce?

         

          
          Amazon.com has grown from a small online bookseller to one of the largest retailing companies in the world, and easily the largest e-commerce retailer. The company has come a long way from its roots as a small Internet start-up selling book online. In addition to books, Amazon.com would like to be “The Walmart of the Web,” and it is indeed the Internet’s top retailer. But another firm emerged as a serious challenger for the title of ‘Walmart of the Web’: Walmart. Though Walmart is a latecomer to the world of e-commerce, the world’s largest retailer appears to have its sights set on Amazon and is ready to battle it out for online e-tailing supremacy. Walmart is clearly the bigger and stronger of the two, and for the time being, Amazon is not a big threat to Walmart as a whole. Amazon, however, is not an easy target. The company has created a recognizable and highly successful brand in online retailing as a mass-market, low price, high-volume online superstore. It has developed extensive warehousing facilities and an extremely efficient distribution network specifically designed for Web shopping. Amazon’s technology platform is massive and powerful enough to support not only sales of its own items but also those of third-party small and large businesses, which integrate their products into Amazon’s Web site and use its order entry and payment systems to process their own sales. Walmart’s efficiency, flexibility, and ability to fine-tune its inventory to carry exactly what customers want have been enduring sources of competitive advantage. Walmart also has a significant physical presence, with stores all across the United States and in many other countries, and its stores provide the instant gratification of shopping, buying an item, and taking it home immediately, as opposed to waiting when ordering from Amazon. According to Amazon spokesperson Craig Berman, “Shopping on Amazon means you don’t have to fight the crowds. We bring the items to your doorstep. You don’t have to fight through traffic or find a parking space.” Moreover, Amazon has taken steps recently to speed delivery times. By working with carriers and improving its own internal systems, Amazon also started offering second-day deliveries on Saturdays, shaving two days off some orders. And Amazon continues to expand its selection of goods to be as exhaustive as Walmart’s.

CASE STUDY QUESTIONS

1. What concepts in the chapter are illustrated in this case?

            The concept that has been illustrated was all about E – Commerce business model such as Amazon and Walmart which sells through the use of Internet.

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

            Using the value chain and competitive force models by supplying a wide range of product to the consumer, amazon.com share a market space with the likes of Walmart. Rivalries among existing firms are strong as the industry is growing and the products that are being sold to the consumer are not so differentiated. In attaining competitive advantage Porter’s five competitive force can be used to determine industry profitability. These forces include threat of new entrances within the market, market power of suppliers, substitutions of products and services, bargaining power of the buyers and industry competition. The internet has changed the nature of doing business, so has the competition that surrounds it and in supply chain management system automate the flow of information among members of the supply chain so they can use it to make better decisions about when and how much to purchase, produce or ship. More accurate information from supply chain management systems reduces uncertainty and the impact of the bullwhip effect.

3. What are the management, organization, and technology factors that have contributed to the success of both Walmart and Amazon?

            Both of them using e-commerce is a fascinating combination of business models and new information technologies. The three major electronic commerce categories are business to consumer (B2C) e-commerce; business to business (B2B) e-commerce and consumer to consumer (C2C).E-commerce can be viewed as the conduct of business commercial communications and management by using Internet technologies and through electronic methods, such as electronic data interchange (EDI) and automated data-collection systems. It may also involve the electronic transfer of information between businesses (EDI). In using the Internet, many organizations have looked to add more value to the tangible products they sell by providing additional ‘information-based’ services. These can include online support, order tracking, order history, etc. Many of these initiatives focus on deepening the relationship with customers and suppliers. Others have moved their trading platform either partially or entirely onto the Internet.

 4. Compare Walmart’s and Amazon’s e-commerce business models. Which is stronger? Explain your answer.

            Both sites are online merchants that have been made. Walmart is simpler and easier to reach the required product, while at amazon.com and search for products have a lot of things that detract from the required product. The product categories are more or less similar but amazon.com has a special category for the book which is understandable because it is the first business was the main job. Amazon still as the stronger online retailer, they always do continuing new innovative. The profiling technology has enabled Amazon to recommend books based on previous purchasing history and what other customers who have bought similar books are also reading. Even today, the company strives to maintain their founding commitment to customer satisfaction and the delivery of an educational and inspiring shopping experience.

5. Where would you prefer to make your Internet purchases? Amazon or Walmart.com? Why?

            I prefer to make my internet purchase through Amazon it is because their products were more complete than Walmart  because they still strives to maintain their customers satisfactions especially they still  has a special categories for the book as their main online products.