World’s Top Retailer? Walmart and Amazon Duke It Out.”
Walmart and Amazon represent two of the greatest contenders that are constantly duking it out to in order to try to claim the number one spot as the preferred, and most successful, retailer of the future. Each company has a different set of competencies and have employed different strategies in the constant struggle to remain competitive in an environment that is perpetual evolving. The contrast that exist between these two companies on many important strategic and operational goals can be used to illustrate virtually the full spectrum of retail strategies that have proven successful in the market. Each company represents the biggest competitor in the specific niches that the companies focus on.
For example, Amazon is a relatively new company that has seen tremendous growth, both horizontally and vertically, which it has achieved through disruptive innovations. Walmart, by contrast, is one of the more established American iconic company that has used a low-cost strategy to acquire its market share that has steadily grown over the years and has resulted in a massive organization with a high-tech logistics infrastructure that allows the organization to achieve vast quantities of scale relative to its supply chain. Amazon, by contrast, has developed an innovative logistics network that is able to support the growing ecommerce platform that it has helped to pioneer over the years. Amazon, has steadily worked to steal its market share from traditional brick and mortar retail operations through its online operations. Furthermore, Amazon now dominates the online retail space and an exponentially growing number of consumers are becoming acquainted with online shopping, which in turn definitely poses a threat to Wal-Mart and the future of the industry in general.
Information Technology and Modern Retail
Both Amazon and Walmart have unique approaches to how they have been able to utilize technology to support their broader business objectives. However, between the two organizations, Amazon’s competencies have been more oriented on technology as a means to creating a comparative advantage than their major competitors. In fact, Jeff Bezos, Amazon’s founder, focused more on the potential of technology to create new distribution channels to market and sell products when designing the original operating. To Bezos, it didn’t specifically matter which product was being sold, rather it was the ecommerce platform that was the key ingredient and the decision to originally use books as a product and an entry point was actually made much later in the business planning phase than the distribution channel. Not too long again, the value of Amazon (which is about two hundred forty-eight billion) exceed the value of Walmart (worth about two hundred thirty billion) for the first time making Amazon the world’s largest retailer (Hartung, 2015).
Walmart’s growth focus in recent years has been placed on international expansion in key markets such as China and Europe. Technology has definitely been the key resource that has allow them to rapidly expand into these markets and the company has utilized everything from the latest advances in enterprise resource planning (ERP) systems to radio frequency identification (RFID) product labels to manage inventories and supply chain flows to its 8,500 departmental and warehouse stores in 15 countries which has led to its position of being the world’s most formidable low cost leaders in the retail industry (Ken, N.d.). It is likely that the online experience will not be able to capture sales of many of the goods that are traditionally purchased in person. However, technological innovations, such as the use of drones for delivery, coupled with other technological trends as well as the rapid advancements in virtual reality, could potentially propel Amazon’s platform even faster than ever before imagined (Pogue, 2016).
Hartung, A. (2015, July 25). Bigger Is Not Always Better – Why Amazon Is Worth More Than Walmart. Retrieved from Forbes: http://www.forbes.com/sites/adamhartung/2015/07/25/bigger-is-not-always-better-why-amazon-is-worth-more-than-walmart/
Ken, A. (N.d.). Wal-Mart’s Major International Strategy. Retrieved from Ezine Mark: http://public-company.ezinemark.com/wal-marts-major-international-strategy-7d35349720f4.html
Pogue, D. (2016, January 16). Exclusive: Amazon Reveals Details About Its Crazy Drone Delivery Program. Retrieved from Yahoo Tech: https://www.yahoo.com/tech/exclusive-amazon-reveals-details-about-1343951725436982.html
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