Lê Đức Hiếu – BABAIU21396 – Individual assignment 2

Case study questions:

1. Analyze Amazon.com and Walmart using the value chain and competitive forces models.
2. Compare the role of grocery sales in Amazon and Walmart’s business strategies.
3. What role does information technology play in these strategies?
4. Which company is more likely to dominate grocery retailing? Explain your answer
Answer:

1. Analyze Amazon.com and Walmart using the value chain and competitive forces models.
Forces model:

Amazon and Walmart are aggressive rivals in the retail sphere, competing both online and offline. From
an online standpoint, Amazon has long been a prominent competitor, offering a wide range of things such
as groceries, electronics, clothes, and so on at extremely reasonable prices. Amazon has a developed and
well-organized supply chain infrastructure that maximizes and excels in offering the biggest purchasing
experience to its customers. Walmart, on the other hand, is a prominent company recognized for its brick-
and-mortar stores and is the largest physical seller of food in the United States. However, Walmart has
minimal online presence since it is still attempting to catch up with major online merchants such as
Amazon. Walmart has a large offline customer base from which it draws a lot of traffic to fuel its grocery
sales.
For competitors: Amazon and Walmart frighten competitors because it can provide such low pricing on
so many different types of things and through online programs, apps. Stocks for
(Kroger, Costco, and Dollar General all fell > 6% when Amazon announced the Whole Foods acquisition)
For customers: Grocers are also responding to rising consumer demand for fresher foods, tailored
selections, and the use of technology to enhance the food-buying experience
Value chain:

However, only when Amazon bought Whole Foods, Walmart's supremacy in the retail business would be
called into doubt. Amazon, the e-commerce titan, may soon overtake Walmart in the retail business.
Amazon now is well- known for its online services and its physical services. Now that Amazon has
entered Walmart's territory, they have recognized the need to reinvent their online capabilities.
For Amazon: customers may get Amazon Prime Membership, Amazon Fresh, Prime Pantry, and Prime
Now from Amazon. It provides a wide range of items at affordable prices and speedy product delivery. In
addition, Amazon allows consumers at some Whole Foods locations to pick up food from lockers and
return it at their leisure.
For Walmart: In comparison, Walmart is progressively boosting its sales year on year by working with
Uber technology and other companies to give clients with delivery and pick up services.

2. Compare the role of grocery sales in Amazon and Walmart’s business strategies.

Walmart
After acquiring Whole Foods, Amazon
transitioned from an e-commerce player to a
physical grocery store presence
Sells a wide range of items with various delivery
choices via its many platforms
Extended and giving many its loyalty program to
customers (Amazon Prime Membership, Amazon
Fresh, Prime Pantry, and Prime Now).
Amazon
Has made a significant investment in e-commerce
in order to encourage more of its in-store
consumers to purchase online
Through researching, the internet market will
develop 15 times faster than the restaurant
industry. Walmart sees this as an opportunity and
has launched an online order and pickup scheme
for customers
Walmart's Retail applied technology into
connecting suppliers and shops for better supply
and deliver services.
 Utilizes Whole Foods Market as a warehouse to
deliver items to customers faster.

3. What role does information technology play in these strategies?

Amazon:
- The time it takes for a product to reach the customer has been significantly shortened because to
advances in information technology. Amazon also provides a 2-hour delivery program via a well-
designed logistics operation.
- Amazon has created and implemented technology for stores that allows customers to pay without
having to wait in lines, lowering the cost of hiring cashiers and other personnel.
- Using technology to improve client food purchasing experiences.
Walmart:
The importance of grocery sales in Walmart's business plan is radically different since the company
intends to compete with Amazon in e-commerce. Walmart has contributed 18% of the US food industry,
and in order to meet its objective of 40% growth in online sales, Walmart needs expand online and invest
in technology. Grocery sales account for 56% of Walmart's overall revenues, and if it loses the battle with
Amazon, it has little prospect of replacing Amazon as the world's largest e-commerce firm.

4. Which company is more likely to dominate grocery retailing? Explain your answer

Because of its online presence in several nations across multiple continents, Amazon is more likely to
dominate the retail business. Amazon provides its customers with a large range of services such as
Amazon Prime, Prime Now, Kindle, Echo gadgets, In-House items, and so on, which very few firms can
accomplish in today's market. Amazon rates well in customer satisfaction by offering delivery times
ranging from 2 hours to 2 days, depending on region. Using Amazon's sophisticated information system,
shorter delivery times have lowered the time it takes for a product to reach its recipient. This has greatly
increased customer satisfaction and is evidenced by many high-income families who have spent
thousands of dollars using amazon products.