Amazon vs Wallmart

amazon vs Wallm Amazon vs. Walmart Alexandra Tikhonkikh Professor N. Kentish Metropolitan College of forward-looking York The case study Amazon vs. Walmart is illustrated several concepts, which was described in the chapter. One of them is a sales Revenue Model where companies get revenue enhancement by selling goods, information, or dish outs to clients. like Amazon. com which sells books, music, and other products. Another one is e-tailer model.It is close to the typical bricks-and-mortar storefront, except that customers only contract to connect to the Internet to check their items and place an order. The value scheme of e-tailers is to pop the question convenient, low-cost shopping 24/7, offering large assortments and consumer choice. Some e-tailers, such as Walmart. com, indicated to as bricks-and-clicks, ar divisions of come throughing physical stores and have the same products. Others, however, exist only in the virtual world, without any ties to physical positionin gs like Amazon. com. Before we going to analyze Amazon and Walmart. om using the value chain and warlike forces models, we theorize to describe these two concepts. Business Value Chain Model include 1) views firms as series of activities that add value to products or services, 2) highlights activities, 3) ancient activities vs. secondary activities, 4) stick how information trunks could advance customer and supplier disintermediation at each step of development, 5) utilize benchmarking. Michael Porters competitive forces model provides general view of firm, its competitors, and environment.It likewise substitutes products and services. The model include customers and suppliers, moreover, it contains traditional competitors and hot market entrants. Besides, five competitive forces shape fate of firm. Amazon. com started as on line bookseller, but has expended into a great variety of media, electronics, and other general merchandise categories in obligate of its blood line s trategy. Amazons value chain includes primary and support activities. Primary activities argon very important for business, because those needed to manufacture a product or services for the end users.These activities typically include 1) service basically meant by after-sales support like user training, install applications, customer support and etc. , 2) operations manufacturing the product, 3) inbound logistics receiving goods from supplier and storing those goods, 4) outbound logistics sending goods to wholesalers, retailers or directly to the end customer, 5) market and sales product needed to be sold to the end customer, to understand customer requirements and also to promote goods.Support activities help to facilitate or assist the primary activities of producing product. on that point are four category 1) Procurement purchasing raw material and other items used in operations, 2) Human Resource Management recruiting, hiring, firing, training, developing, compensating, 3) te chnical Development research and development, unconscious process automation, software, hardware, equipment, etc. , 4) Infrastructure may include accounting, legal, finance, planning, public affairs, government relations, quality assurance and general precaution.As to Amazons competitive advantages from a value chain there are several strategies of development like strong technological infrastructure with a single platform, high investments in technology development for example Kindle, the best leverage digital products, great product forecasting system, print on pauperization, constantly imploring suggestions on new products, easy and fast payment system, 24/7 operations, free returns within 30 days. Amazon. com competes with product specific retailers online marketplace and mass merchandise retailers.This creates an environment of intent competition and requires Amazon. com to differentiate itself uniquely based on the competitor. Lets try to jerk a Wal-Mart position from the competitive model as well. argument among rivals is fairly weak. The market is crowded but Wal-Mart has the lowest costs, prices, profits, and market share. The warning of substitute products is also weak. Wal-Mart exerts a great deal of effort in making sure they are innovative and meeting customer requests. The endgaining power of suppliers is weak as well. For most producers, Wal-Mart would be their largest account.The bargaining power of buyers is also weak. There is a very extensive base of customers and a meaningful demand for low prices. The threat of new entrants is weak. Wal-Mart has a scale of operation that is very important, it would defecate years, maybe even decades, for a new company to be on the same level. Even prominent companies today would have really difficult magazine matching the costs and prices Wal-Mart provides. A more sophisticated analysis of Wal-Marts internal value chain shows that Wal-Mart is hold in esteem to technology and was the ? rst merch ant, which uses bar codes.It also uses satellite connections to communicate with all its stores. Moreover, Wal-Mart has integrated its POS, inventory-control, RFID, and other logistical technologies to haste product delivery, improve security and decrease costs. Besides It has developed regional obtaining centers in addition to its legendary center in Bentonville, Arkansas. Wal-Mart even has one in Shenzhen, China. Merchants set up satellite of? ces next door to the most suit subject procurement center. Because Wal-Mart is a retailer, not a manufacturer, its external value chain is extremely simple.It deals with a variety of merchants and sells to customers. But the secret to discovering what fudges Wal-Mart successful in analyse its internal value chain. We should mentioned Walmarts competitive advantages from a value chain perspective. First of all it is a distribution capabilities well-organized distribution, leadership of Walmarts own distribution centers and turned location strategy. Second, is partnership relationship with merchants integrates suppliers via IT treats them well in terms of pricing, they are more business partners than value takers.Third, is advanced data mining dynamic theme and usage of customer buying behavior report. Forth, workforce culture and EDPL customer-oriented workforce interested through substantial monetary contribution and belief in Walmarts culture. And thats not hard consider the fact that Walmart is virtually 50 years old. Wal-Marts business strategy is to provide Every day cut Prices or EDPL for all its products and services. Their organization, company culture, and supply chain management all support and emphasize this business strategy.Also, Wal-Mart use strategy of managing costs which include budgeting payroll cost, saving on business travel cost, investing in technology, eliminating unnecessary costs. Another strategy that we have to mention is a strategy of managing growth, which consists of location and acq uisition. And the pull through one called strategy of managing stack resources. Every company that wants to be successful supposes to pay attention to this strategy as well. Internal promotions, employee motivating and external enlisting are the main components of this strategy.By implementing these three important strategies successfully, Wal-Mart has become from a single store to the biggest retailer in the United States and the biggest company in the world. The cost management strategy of Wal-Mart was created an operational model with the lowest cost which was increased the ratio of profit on the financial reports. Products instal in Wal-Mart stores are not considered to be a high-end, luxury, or fashion oriented. Because their strategy is being a low price leader. Wal-Mart aims to provide a wide variety of products under one location for a low price.Wal-Mart stores also carry their own private labels that compete on price with national brands. Moreover, the growth management strategy had hauled Wal-Mart into the right steerage of investment and expanded radically around the distribution center. However, the people management strategy motivates all employees to work more efficiency and generates a great work environment which full of self-improvement, competition, and respects. It also provides a chance for people to build-up experience from the low-rank position to the high-rank position.Consequently, strong management in these three strategies had transformed Wal-Mart into the biggest company in the world with the highest number of workers worldwide and had also provided benefits to millions of people around the world by transferring avoidable cost into low-cost products. Now we are going to consider the management, organization and technology factors that have contributed to the success of Amazon. Firs of all, Amazon is convenient and easy of use. It has a large selection of different items, unlimited virtual shelf position and wholesale relations, so you could find any product for acceptable price.The service is high performance, which could be proven by high speed and reliability. Customers are unploughed informed well about new products and the system that provides shipping makes the process fast. Also, Amazon use innovative technology, which contribute development and support of all system in whole. For short time Amazon. com became a well-known brand with cross promotion, high advertising, co-branding and publisher relations. Amazon. com is also famous for its large community where customer and motive reviews post. It has a great gift policy for customer like bookmarks, notepads, cups, etc.Amazon arranges promotions where customers could collaborate with famous authors. The site has a large customer database with personalization pages, which contain extensive customer profiles. It also has recommendation pages, which help other readers make a right choice. Amazon has a high trust for their users because of guarantees a nd return policy. Great customer service is also promote trust of users because of superior service reps, easy search, email confirmation, extended service, extensive subject index, ability to order before publication. By the route Amazon has good cost structure.Besides low prices it has fast, reliable and inexpensive shipping. Amazon and Wal-Mart using e-commerce is a fascinating combination of business models and new information technologies. Wal-Marts impressive growth in such a short time and perhaps the most important factor in its rise was their exploiting of the pronouncement of e-business, e-procurement, and the modification of internal processes to maximize its benefits. In compare with others companies, Wal-Mart transformed supply chain management by using a sales revenue model where customer requests satisfy by wise variety of goods.Inventory control is thoroughgoing(a) improved and purchasing trends are available to sellers, whom nowadays must be able to respond as qu ickly as possible to the needs of millions of customers. To decentralize the procurement was a great business decision for Wal-Mart, that helped simplify the process for employees in every store immediately order the applicable stock automatically, which is require prompt turnout of product from the suppliers. This fast replenishment system, attached with perfect purchasing forecasting, helps Wal-Mart reduce overall costs.Wal-Marts power as a giant in business has helped in establishing new criterions for B2B e-commerce. Wal-Marts approach of stinging costs at all costs resulted in them deploying EDI over the Internet to eliminate the costly VAN altogether. EDI over the Internet (EDI-INT) uses a new standard called AS2, a communication protocol that attempts to make EDI communications over the Internet both secure and reliable. By mandating their suppliers to use AS2, Wal-Mart leads the way in creating a demand for a new generation of EDI, and in turn drives the whole world of e-b usiness advancing.Amazons e-commerce business model Amazon started as a store that focus primarily on books and music. It quickly expanded to other sectors and now sells products in nearly every segment apparel, home improvement, groceries. In addition, Amazon has expanded from a Business-to-Consumer (B2C) only store to a mixed model with its corporate account functionality that focuses on business customers. Added to the mix, is the Amazon marketplace Amazons answer to eBay, which allows merchants to list their products and customers to purchase from merchants eyepatch using Amazons e-commerce platform.As a provider of e-Commerce software to mid-market, we use Amazon as a reference for the features it has on the web store. Some of these features not easily found on other sites include the 1-Click Ordering, Customer Viewing, Recently Viewed Products, Keyword Auto-fill on the product search, Your Personalized Store, and Items to Consider. While some of these features are relative ly easy to implement e. g. 1-click Ordering, others are not so easy and demand an advanced platform. But selling goods isnt the only way to make money with Amazon. com.The sack sites affiliate program is one of the most famous on the Web. Through Amazons Associate Program , anyone with a Web site female genitals post a link to Amazon. com and earn some money. The associate can also take advantage of Amazon Web Services , which is the program that lets people use Amazons benefits for their own purposes. The Amazon Web Services API (application programming interface) lets developers access the Amazon technology infrastructure to build their own applications for their own Web sites. every(prenominal) product sales generated by those Web sites have to go through Amazon. om, and the associate gets a small commission on each sale. On the flip side, Amazon seems to not have kept up with the Web 2. 0 and Web 3. 0 user interface improvements and for most part still incorporates Web 1. 0 t echnology which means you still need a mouse click to view a product as opposed to being able to see product details with a mouse roll-over. Amazon could use a make-over to make for a brighter shopping experience. For my opinion Amazons e-commerce business model is stronger than Wal-Marts e-commerce business model because E-commerce is Amazons core mission and environment.Amazon started with a store that was properly feature-rich for its time and has gone on to fort that foundation. Today, it probably defenses as the leader in terms of the richness of its e-Commerce features, product breadth, personalized recommendations and depth of content available across e-commerce sites. However, there is a need for Amazon to offer a simplified and trendier shopping experience as an alternative which many other sites now offer. I dont think Wal-Mart will deputize Amazon any time soon, if ever, but it gives them a good shot of increasing their overall Web penetration.Amazons value proposition until now has been a broad assortment. This enables Walmart to compete with other companies with big assortments. I would prefer to make my internet purchases at Wal-Mart because this company has a great experience and long term history. Wal-Mart exists almost 50 years, Amazon is a brand new, successful but still doesnt have that experience that Wal-Mart does. Some reviewers have actually built their quest on Amazon. com with good quality reviews. References 1. 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