Question

Bus 499 w10 Assign#3

Analyze the competitive environment to determine Walmarts most significant competitor. Compare their strategies at each level and evaluate which company you think is most likely to be successful in the long term. Justify your choice.

Determine whether your choice from above would differ in slow-cycle and fast-cycle markets.

Answer 1

Walmarts most significant competitor is Amazon. They are both competing in Omnichannel retailing which includes both brick and mortar store, online stores and also offer a wide range of products including groceries.

Wal-Mart founded in 1962 and employees 2.5 million people worldwide. They have 11277 stores worldwide as of October 2018, revenue of $ 500 billion (worldwide) with a presence in 27 plus countries, is known for the following:

• They are selling both in the retail and wholesale market
• They have brick and mortar stores
• They offer the lowest ever prices and many offers everyday
• They also have an online presence.
• They have four operating businesses namely; Wal-Mart US, Wal-Mart International, Sam’s Club, Global E-commerce.
• E-commerce business started in 2016 with the acquisition of jet.com to compete with Amazon
• They have around 500 stores in US 90% of their customers reside within 10 km of their stores.
• Most of their sales are of low-cost products through brick and mortar stores spread across the US and the world.

Amazon

Amazon Wal-Mart competition started in 2016 with Wal-Mart acquiring Jet.com. Amazon entered the brick and mortar store by acquiring whole food market in 2017. Amazon was founded in 1994, has a revenue of $ 177 billion, workforce of 613, 300 employees and has 100 million subscribers worldwide. Their business model is as follows:

• Strong online presence
• Entered brick and mortar business in 2017 by acquiring whole food market for $ 13.4 billion
• It is the third most valuable public company in the US.
• The second biggest employer in the US after Wal-Mart.

It seems like Amazon has a stronger foothold and momentum in online business compared to Wal-Mart. The strength of Wal-Mart is the extensive network of brick and mortar store, which Amazon is lacking.

In the long run, it is more likely for Wal-Mart to develop and expand its online presence than Amazon setting up many stores.

The key positives for Wal-Mart’s long-term success are as follows:

1. Wal-Mart has the added advantage of having revenue of $ 500 billion, which is three times larger than Amazon.
2. Wal-Mart has also increased its range of apparel products by launching four apparel labels.
3. Further Wal-Mart is also set to launch its digital-only bedding line. They have also clubbed with their partner Sam’s club to start same-day delivery of groceries.
4. Amazon has to put extra efforts to compete with Wal-Mart’s stores, improve the range of both apparel and food items.
5. Wal-Mart has the challenge to manage 12000 plus stores and create an online presence in 28 plus countries.
6. Amazon is also competing by supplying groceries with 3-4 hours at customers’ doorsteps and giving facilities to prime members.
7. Wal-Mart is also looking to buy Flip kart an e-commerce business in India to compete with them.
8. Wal-Mart is aggressively improving their online presence.
9. Wal-Mart has an advantage over Amazon of having grocery pickup, e-commerce picks up and other support services.

Wal-Mart would have the same advantage over the slow cycle and fast cycle markets as they are already a well-known brand and they continue offering a wider range of products., Further they are aggressively increasing their online presence. They are aggressively countering all competitor both on the front and the back foot.