Question

10-16 compare walmart and amazon's business models and business strategies

Answer 1

Walmart – Walmart is the world’s largest consumer goods retailer firm with thousands of stores across the world. Its business model involves retail operations through huge brick and mortar stores with an increasing presence in online offlate.

The generic competitive strategy of Walmart is Cost leadership. The firm focuses on offering lowest possible prices on its products to the customers. Below is how Walmart stands as a cost leader –

1. Everyday low prices campaign and strategy to attract consumers
2. Offering products cheaper than those of competitors on a consistent basis
3. Increasing sales revenues through high volumes, large scale and efficient supply chain
4. Procuring products from suppliers who offer high volumes at relatively lower prices
5. Offering wide range of product options for customers at discounted prices
6. Increasing footfall of customers by providing various offers
7. E-commerce business offering door delivery of products ordered online

Amazon - Amazon is the world's largest e-retailer firm by sales and market capitalization. Apart from ecommerce, Amazon offers web services like cloud computing platform etc. through Amazon Web Services.

Amazon defines itself as the earth’s most customer centric firm and its purpose and objectives are encircled around customer focus.

Amazon ensures it continuously works towards its objective by ensuring its employees follow 14 leadership principles in every process starting from hiring of the employees to delivering the products. Few principles include Customer obsession, Innovation, Bias for Action, Ownership, Frugality etc.

Enabler(s) to continuously work towards objective – Technology is the enabler in working towards the purpose and objective.

Core Value proposition:

• Price – Customers are always price conscious. Hence, products have to be offered at lower prices while maintaining the quality.
• Convenience – Customers prefer to pay extra bucks for convenience. Amazon has been a one-stop-shop for all the customer needs. Also, products are being delivered at customer’s door step to save his/her time and money.
• Selection – Amazon maintains wide range of products which offers unbelievable number of choices for customers.

Off late, there have been many e-commerce companies around the world offering wide range of products. But, Amazon has maintained its leadership by adhering to its principles. It has never deviated from its purpose and objective.

Apart from catering to direct consumers, Amazon’s other customers include –

• Sellers who use Amazon’s marketplace model to sell their products and
• Companies and individual developers who use Amazon Web services