Question

Walmart has launched a strategy to challenge Amazon with online purchases. They seemed to be on the right track but in the news it was stated that items purchased online are higher in cost (sometimes over $1) than if you purchased them in the store. What will this do to their entrance into this market? Is there a fix for them that will still keep the service profitable?

Answer 1

Walmart has decided to give stiff compeition to the Amazon by entering to online business model ( omnipresent model of distribution). Walmart is known for their economical shopping opportunities to ther customers and that is the USP ( Unique selling proposition). Thus walmart shhpould concentrate on delivering porudct in online through same rate as of their bricak and mortar/retail outlets. This can be achieved through better network designing and optimising the inventory rates. This will reduce their transportation and storage cost of goods. The benefits they gained out of proper network design strategues can be given back to the customer interms of lower cost. Till the business through online attains a reliable status Walmart need to concentrate and satisfy customers through better price ( price penetration). Inorder top make their service level more capable they can enter alliance with leading logistics providers so that they can share their facililites and capabilities to deliver goods on time. Also make a market place through walmart for other local suppliers to sell their products ( after proper quality checks) and thus they would be able to sell products at reasonable price.