Question

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In 2016, Target, Macys, Sears, JCPenny, and others are closing hundreds of stores. Since 2000, consumers have been shifting away from traditional retail goods like apparel and electronics (the mainstays of retail stores), and buying more services like vacations, exercise, dining, and health care.The much bigger threat to traditional retail is coming from online retail, mostly Amazon, that has gobbled up the lion’s share of online retail (about 25% of all online retail), and has been growing at astounding rates like 15% to 20% a year since 2008. Apparel and electronics are also the largest sales items for online retailers, so the physical stores and the online giant all compete selling the same goods.Traditional retailers have spent over a billion dollars in the last decade trying to become online retailers, and meet consumers wherever they want to buy, online, or at the store. It’s called an “omnichannel” strategy: using multiple channels like physical stores and online Web and mobile apps to sell products. Many traditional large retailers such as Walmart, Macys, and Costco, have wound up in the top ten online retail rankings. But so far the omni channel strategy has not been especially successful in keeping up with Amazon’s growth.In what promises to be the online battle of the decade, the two biggest players, the heavy weights, Walmart and Amazon, are going head to head for the consumer dollar. In a broader sense, it’s the online-business model versus the physical- department-store business bmodel which was invented by Macy’s in 1870. But to be fair to the traditional retailers who have developed their online and mobile sales channel, it’s more accurate to say it’s the omni channel model versus the pure-online digital model of Amazon.Here’s how the two heavy weights shape up. Walmart’s revenues in 2015 were $485.6 billion (the largest Fortune 500 company), it had earnings of $15 billion (about a 3% margin) , and e-commerce sales of 13.7 billion (around 3% of total sales revenue). Walmart has about 5,200 stores of all kinds in the U.S. It produces around $15 billion in free cash flow a year, and has about $9 billion cash on hand. In 2016 Walmart’s market value is in the area of $230 billion.It’s sales growth in 2015 was 1.8%. Walmart employs about 2.1 million people (1.4 million in the U.S. alone), making it the largest employer in the world and the U.S. That works out to $231,000 of revenue for each employee.Amazon’s revenues in 2015 were $107 billion (the largest e-commerce company, but only 35 in the Fortune 500), it had earnings of $596 million (about a 1.8% margin), and e-commerce sales of $92 billion. Amazon has about $8 billion in cash on hand. In 2016 Amazon’s market value is about $366 billion, and its sales growth in 2015 was about 20%. Amazon employs about 222 million people. That works out to $481,000 of revenue for each employee.The retail battle of the decade shapes up as a contest between a giant traditional retailer that is growing very slowly, and has only a tiny online presence, versus the largest online retailer which is growing very rapidly, and has no physical store presence. Both companies have significant financial assets, and nearly limitless credit, to build or acquire whatever capabilities they choose. Walmart needs to develop new systems and capabilities both in-house, and through acquisitions. In 2016 Walmart bought the start up Jet.com, and small but fast-growing Amazon competitor.

1.What are the three key assets that Walmart can leverage (build on) to compete with Amazon and other online retailers?

2.What is Walmart’s e-commerce strategy?

3. Why isn’t Walmart worried about the channel conflict between its online sales and its store sales?

4.Why is Walmart in-sourcing the development of its online operation, in part by acquiring technology companies rather than outsourcing development to low-cost countries and other domestic firms?

5. Why did Walmart acquire Jet.com?

6.How does Walmart’s fulfillment operation differ from Amazon’s?

Answer 1

Answer:-

1) After the developing use of the online mode of shopping, the retailers, alongside Walmart showed concern for its market position. Be that as it may, as Walmart has been in the defensive situation for quite some time, it tends to be said that the organization has some strategies to challenge Amazon, the world's largest e-commerce organization. The three key assets which Walmart can use to compete with Amazon are -

It has the largest physical retail stores in the entire United States. It has become an impression because of that.

Walmart has additionally the largest transportation through private waterways.

Furthermore, the organization has the largest number of warehouses just as the retail circulation network.

2) Walmart's e-commerce strategy:-

Walmart is following the omnichannel strategy, which is essentially the strategy by which an association can improve its user experience. As customers now as days seek convenient shopping experience, Walmart, consequently uses this strategy to give the customers seamless experience with the goal that they can discover Walmart convenient place for shopping as well, like that of Amazon.

3) Walmart isn't stressed over the channel strife between its online deals and its store deals since it comprehends the stores may not generally have all that you need at that careful minute.

Nonetheless, every one of the ones must do is go on the web and quest for the thing they are specifically searching for and have it sent to their neighborhood Walmart.

4) The capacity to acquire in-sourcing permits the organization to get new aptitudes and capabilities. Then they can scale them up to Walmart's size. Walmart needs to rebuild the organization, alongside the abilities of its work force. It likewise needs to innovate and manufacture new services. The desire to rebuild, rebuild the aptitudes of its work forces and innovate new services are impractical by outsourcing.

5) Today's market is extremely competitive, with consumer's capacity to search the world over from the solace of their homes and compare a huge number of items, it is not, at this point pretty much being the best in the area of which you operate, however you have to be the best on the planet and potentially own multiple businesses with different markets.

For Walmart, they acquired Jet.Com because they had a workforce with IT and online sales expertise, and an interesting business plan of how it could compete against Amazon, a significant and serious competitor for Walmart.

6) Amazon's fulfillment center appears to be more advanced in the use of apply autonomy and drone delivery. While Walmart has the largest fleet of trucks in the United States which can be used to deliver packages to nearby stores, and potentially neighborhood get focuses.

Walmart has hundreds of stores that can be used as get focuses for same day delivery and advertises their get service as a wonderful and fast choice for consumers.

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