Introduction

Although Walmart has been around for 30 more years than Amazon, recent years have found the

two companies fighting for many of the same customers. Walmart was founded in 1962, while

Amazon was founded in 1994. Walmart started as a grocery and big-box store that relied on

physical locations, while Amazon’s beginnings were as an online bookseller. Over the years, the

lines between the stores have started to blur as Amazon has expanded its online offerings and

moved into the brick-and-mortar space, and Walmart has created a large e-commerce presence.

At the same time, both stores have added additional services like Amazon web services, video

and music and Walmart pharmacy. However, it wasn’t until Walmart bought Jet.com and

Amazon acquired Whole Foods that the true competition got started.

This case study will analyze my understanding of the role that information technology plays in

each of these businesses and the role of the various IT professionals involved in this case.

Understanding how IT influences organizational strategies will allow me to explain how IT

helped influence Walmart and Amazon's organizational strategies and how that influence

affected the organizational strategic plan.

Walmart & Amazon's Business Models and Business Strategies

When analyzing Walmart and Amazon's business models it is easy to see that both

companies strive daily to get customers who are interested in their products or services, give

these services or products to that customer in a timely manner while offering competitive prices

all while ensuring that you do this in a way that pleases the customer ensuring they return for

future purchases. Each company is a powerhouse in their own lane of business while operating
in areas where they have carved out a niche for themselves however both have risen to the

success they have thanks to being pioneers.

Laudon & Laudon (2016) noted that Walmart is within 5 miles of two thirds of the

American population making it more than just a household name it is part of our community,

which is another reason that Walmart has earned and maintained the title of World's largest

successful retailer. This is accomplished through offering customers the ability to shop at

Walmart, Walmart Super Center, Walmart Neighborhood Market, Sam's Club, as well as online.

Excluding online shopping, each of these Walmart Retail establishments offer the opportunity to

shop locally, have items the same day, the ability to order store items online, layaway during

holiday season, and doing this in such a manner as to out work and out sell their competitors.

Amazon had a humble beginning as an online bookstore which offered customers the

opportunity to buy books new or used for a reduce price however it wasn't long before Amazon

realized that there was an untapped market which offered an opportunity to expand. Amazon

began selling household items; clothing, shoes, and later food items, car items and nearly any

and everything you can think of or need is available from Amazon. This vision has allowed

Amazon to become the leader in online sales, which led them, expand into music, movies, and

now they are looking towards offering their own Amazon logistics. Amazon logistics would

offer the company the opportunity to reduce their need for UPS and FedEx according to Laudon

& Laudon (2016).

The Role that IT Plays in Each Company and their IT Professionals Roles

Each of these businesses have strong IT departments and rely heavily on their hard work,

knowledge, and creative ideas to help secure them success in customer service, being first
movers, as well as strengthening their triple bottom line. When speaking about triple bottom line

IT departments are where the action begins and ends because they help influence how consumers

see the company socially, they also help the company make good environmental decisions, and

help keep profits within the company, which is the financial welfare of the corporation.

"Companies improve their social framework by offering a good product or service at competitive

prices while supplying superior customer's service. This helps improve the overall reputation of

the company, increasing profits, increasing customer loyalty, as well as helping to retain

employees." (Noe, Hollenbeck, Gerhart, & Wright, 2011, p.12) This is something that both

Amazon and Walmart both have very successful in implementing due to strong personnel

especially the Chief Knowledge Office (CKO) and Information systems managers who run the

day-to-day operations.

Corporate Strategies are an all-encompassing process that a company does to ensure that

they are performing their best by systematically making a detailed plan. This plan will point out

strengths, weaknesses, and changes that need to be made accordingly. Corporate Strategy is a

process that lets organizations/businesses adjust their plans based on competitive need and a

desire to stay effective (Stefanovic, Tadic, Arsovski, Pravdic, Abadic, & Stefanovic, N. (2015).

These corporate strategies are evident in each company however more so in Amazon as they

were able to see a future in taking a chance on expanding from online book sales to the online

power house they are today with the vision of a strong IT department. This would not go

unanswered by Walmart as they also increased their online sales, although they have much work

to do in this department, the ability to order online and pick up in a physical store is very

appealing to many people. Each of these stores took chances and those chances were backed by
data that was gathered, researched, and implemented due to hard work from the chief data

officers and chief knowledge officer of each company.

How IT Influences Walmart & Amazon's Organizational Strategies

Information Technology (IT) influences both Walmart & Amazon's organizational

strategies by changing their business strategies as needed as well as helping with the

implementation process through a SWOT Analysis where the company's strengths, weaknesses,

opportunities, and threats are addressed. Once the IT Department completes this and they share

this information with management, they are able to fine tune the strategic planning and begin

implementing these strategies. Strategy implementation occurs once the SWOT Analysis has

been managed, once the strategic planning has been done, once the internal & external analysis

have been performed and the corporate social responsibilities have been addressed according to

Datsyk, Podgornaya, Grudina, & Avdonina (2016). Strategy implementation requires a very

strong, capable, and involved leader that can communicate the company's needs, goals, vision,

while encouraging others to help the company through their work and behaviors. Accomplishing

this requires having tools in place that will help measure the progress of the plan while being

aware of future pitfalls that may arise.

Walmart and Amazon.com competitive forces and value chain models

1. Competitive Forces-

a. Walmart is entering a new market through their entry into the online retail space,

competing directly with online retailer giant Amazon, who is a well-known and

recognized leader in e-commerce. Because Walmart has been focused on physical

 stores for the majority of their existence, online retail capabilities only became a

concern once Amazon began stealing market share.

b. Walmart and Amazon are creating substitute services by offering an alternative to

their competitor for their customers. Many Walmart customers are also Amazon

customers, and the ability for customers to purchase similar goods at similar

prices at both Amazon and Walmart puts more purchasing power in the

consumer’s hands, drives down costs, and forces both entities to make

technological and operational changes to increase their competitive advantages.

c. Both Amazon and Walmart have incredible leverage over their suppliers due to

the breadth of their supply for similar products. This gives them both the ability to

drive down the prices they pay for their suppliers’ products to then offer the

savings to their customers.

2. Value Chain-

a. Primary Activities-

i. Inbound and Outbound Logistics-

1. Both Walmart and Amazon build warehouses close to their target

customers to store product. Where the two companies differ is in

their outbound distribution. Amazon’s core business is in storing

product at fulfillment centers to ship to customers, or acting as a

technological middleman for 3rd party vendors who want to sell

their products to a wide audience. Walmart is rapidly developing

their online capabilities, but is still much smaller than Amazon in

online market capitalization and thus less efficient in door-delivery

 distribution. Through Amazon Prime, for instance, customers are

able to receive shipments cheaply and within 1-2 business days.

Walmart is slightly more expensive, and their shipping takes a few

more days. However, Walmart offers customers instant

gratification and the lowest prices by way of scale of their supplies

and the availability of all their products in many physical stores.

ii. Sales and Marketing-

1. Walmart has built a retail empire being known as the place to go

for low prices on many popular items. As a result, they can afford

to lose money on certain products expecting to make up the profit

on others with greater scale and margins. Walmart is also beefing

up its investments in technology, buying up e-commerce startups

in order to direct more traffic and awareness to its online channel,

offering its customers the ability to purchase goods in larger

quantities for larger discounts, and using web scraping techniques

to identify when competitors are offering lower prices on a product

so that their own prices can be automatically lowered. Amazon has

invested heavily in facial and product recognition through camera

applications in order to identify products that customers snap

pictures of to find on their website. In addition, Amazon has a

robust network of compatible devices like the Firefly that enables

customers to view their e-books and interact with other online

content and purchases they’ve made. Both companies have

 competitive advantages- Amazon in e-commerce distribution and

quick delivery, and Walmart in physical presence, instant

gratification, and low pricing. The ultimate winner will be decided

by whichever company makes the best business decisions in their

respective strengths.

References:

Datsyk, A. A., Podgornaya, A. I., Grudina, S.I., & Avdonina, S. G. (2016). The formation of
Organization Flexible Development Strategy. Academy of Strategic Management
Journal, 1575-82

Laudon, K. C., & Laudon, J.P. (2016). Management information systems: Managing the digital
firm [VitalSource Bookshelf Version] (14th ed.). Retrieved from
https://bookshelf.vitalsource.com/#?books/9781323309568/

Noe, R. A., Hollenbeck, J. R., Gerhart, B., & Wright, P. M. (2011). Chapter 1. In Fundamentals
of human resource management. Boston: McGraw-Hill/Irwin.

Stefanovic, M., Tadic, D., Arsovski, S., Pravdic, P., Abadic, N., & Stefanovic, N. (2015).
Determination of the effectiveness of the realization of enterprise business objectives and
improvement strategies in an uncertain environment. Expert Systems, 32(4), 494-506.
doi:10111/exsy.12102