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Implementing Corporate Success Strategies Research Report

Alice Bailey-Brown

Department of Information Systems, California State University, Long

Beach IS 301: Communication for Business Professionals

Professor Morgan Wizel

May 9, 2023
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Implementing Corporate Success Strategies

Prepared for

Doug McMillon

Director of New Product Development

Ford Industries, Inc.

Prepared by

Alice Bailey-Brown, Consultant

Department of Information Systems

California State University, Long Beach

May 9, 2023
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BIOGRAPHY

My name is Alice Bailey-Brown, and I am a senior at California State University, Long Beach. I
am a business major with a concentration in finance. My current priorities are my studies,
networking, and my spring internship with the T. Howard Foundation. For this upcoming
summer, I am pleased to announce that I have already secured an internship with DirecTV as one
of their summer interns. When I am not at school, you can usually find me spending quality time
with my family or reading a book in my garden.
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1250 Bellflower Blvd,

Long Beach, CA 90840

March 8, 2023
Doug McMillon
702 S.W. 8th
St.
Bentonville, AK 72716

Dear Mr. McMillion:

Attached is the report you requested last month, entitled Implementing Some of Amazon’s Success
Strategies into Walmart’s strategies to create a better company and overall better profit.

This report examines Amazon's success strategies and how they can be applied to Walmart's
strategies. The following strategies were examined in this report: Amazon's success metrics,
Amazon's emphasis on customer satisfaction, and the types of services Amazon provides to its
customers that are frequently used. This report explains how implementing Amazon's strategies
will help Walmart grow as it transitions to new retail platforms. I have double-checked all of the
research for this report to ensure that we received accurate information.

I hope you find this report useful in incorporating the best Amazon strategies into Walmart's
current strategies. If you have any additional questions, please contact me at
Alice.Bailey.Brown@csulb.edu

Sincerely,
Alice Bailey-Brown
Alice Bailey-Brown

Encl: Analytical Report

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Table of Contents

EXECUTIVE SUMMARY.............................................................................................................6

INTRODUCTION...........................................................................................................................7

ONLINE & IN-PERSON SHOPPING CONCERNS FOR WALMART.......................................7

AMAZON VERSUS WALMART IN TERMS OF SERVICES....................................................8

WALMART+ HAVING A HARD TIME TAKING OFF...............................................................8

AMAZON’S SUCCESS STRATEGIES: METRICS & PRIORITIZATION CUSTOMER

SERVICE........................................................................................................................................9

CONCLUSION & RECOMMENDATION: IMPLANTING AMAZON’S BEST STRATEGIES

AT WALMART...............................................................................................................................9

REFERENCES...............................................................................................................................11

LIST OF ILLUSTRATIONS

List of FIGURES

1. AMAZON’S QUARTERLY REVENUES FROM 1997 - 2017........................................8

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Executive Summary

This analytical report focuses on comparing and discovering what Amazon’s success strategies
are and how to implement them into Walmart's strategies. The strategies that will be discussed in
this report are the following: customer shopping experience, metrics for real-time data, and the
prioritization of customer service. By doing so, I will be recommending which strategies should
be added to Walmart’s business strategies to become a better competitor. In order to do this
report, I used various peer-reviewed articles that can be found in the library of California State
University, Long Beach, to help me find the necessary and more reliable articles. Within Long
Beach’s library, I used OneSearch and filtered each search to get the most accurate and recent
articles.

Amazon itself is a very competitive and ambitious company. Therefore, the strategies that are
presented in this report are meant to help Walmart become a better competitor and an ambitious
company so that there are more profits coming in and more customer satisfaction. The
recommendations that are given at the end of this report are the following:

Metrics:
Incorporating metrics will help Walmart have real-time data on how its strategies and
ideas are impacting the company and its customer base.

Customer Prioritization:
Prioritizing customer obsession as one of Walmart's strategies will help them become
more aware of what their consumers are seeking from them. By prioritizing customers, it
will help them retain and develop their customer base through referrals from other
customers who believe they’re giving the best customer service.
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Introduction

Over the years, Walmart has attempted to stay ahead of the competition, but there has
been an increase in competitors, the most notable of which is Amazon. Companies understand
that no industry is safe from Amazon's relentless ambition. Amazon has become a formidable
competitor in a wide range of industries. Industries ranging from retail to the grocery industry.
As a result, customers no longer feel obligated to purchase many of their products from Walmart
because they can find them on Amazon’s website and in its stores. The purpose of this research
is to assist Walmart in implementing a few of Amazon's success strategies in order to meet the
evolving demands of its diverse consumer base, such as better online and in-person customer
service. Secondary research will be used to collect data for this report. The secondary research
report will include a review of recently published articles as well as studies on the strategies that
Amazon employs across all of its services. Furthermore, this additional research will be used to
find information on Walmart's strategies that are and are not working for them. Lastly, secondary
research will assist in determining which strategies Walmart should implement in its business.

Online and In-person Shopping Concerns For Walmart

Amazon is widely regarded as one of Walmart's main competitors. Through online and
in-person shopping, Amazon has been able to dominate various industries, including retail,
grocery, home entertainment, and so on. Walmart also sells products in those same industries,
but now that Amazon has discovered a method to dominate those fields, Walmart is attempting
to make a comeback and become one of Amazon's most significant competitors in all fields, but
more specifically in the grocery industry. As is well known, Walmart is a massive discount
department store that has been selling groceries since 1988, long before Amazon entered the
market. In 2007, Amazon Fresh was introduced as a benefit for Prime members. Within a 2-hour
span, Amazon Fresh delivered same-day, free-shipping groceries to its customers' doors. After
noticing its success in the grocery industry, it decided to make a power move, “In January of
2018, AMAZON.COM Inc. (Amazon) opened its first self-service Amazon Go convenience
store in Seattle, Washington. (Ives, B., Cossick, K., & Adams, D., 2019). Customers would walk
in, look for what they wanted, and walk out without having to wait in line to pay. This type of
experience was well enjoyed by customers, but the real question is whether Amazon’s grocery
stores are a concern for Walmart. The biggest concern that Amazon’s grocery stores bring to
Walmart and many other grocery stores is the loss of customers. Research shows that between
2015 and 2017, nearly 80% of customers purchased groceries online. (Ives, B., Cossick, K., &
Adams, D., 2019). This shows that customers prefer to shop online, where it is most convenient
for them, rather than having to drive to the store, wait in long lines, and drive back home. In the
same research article, it states that
“30% of Millennials (ages 21-34) and 28% of Generation Z (ages 15-20) respondents say
they’re ordering groceries online for home delivery, compared with 22% of Generation X
(ages 35-49), 17% of Baby Boomers (ages 50-64) and 9% of Silent Generation (ages
65+) respondents. Younger respondents are also the most willing to use all of the
e-commerce options in the future” (Ives, B., Cossick, K., & Adams, D., 2019).
As was shown from the data, many young people prefer shopping online, while the older
generations prefer shopping in person. Amazon's strategy of using online and in-person grocery
stores helps them gain and retain customers of all ages. Moreover, using strategies such as
grab-and-go makes them stand out from other grocery stores. Many of the new generations are
looking for a better experience when shopping online and in person, and Amazon is offering that
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through Amazon Go and its Amazon Prime membership. Offering these types of shopping
experiences has helped Amazon increase its revenues. Figure 1 represents Amazon's revenues
from 1997, three years after it was founded, to 2017, when it started entering the grocery
industry.

Figure 1
Amazon’s quarterly revenues
from 1997- 2017 (Ives, B.,
Cossick, K., & Adams, D., 2019).

Amazon Versus Walmart in Terms Of Services

One of Amazon's extraordinary services is the support and help it provides to

independent sellers, whether they are small or medium businesses, to succeed through
Amazon.com. According to an article written by Amazon, “60% of the sales of physical products
sold in the Amazon store (by value) are now made by…entrepreneurs and other mostly small-
and medium-sized businesses” (Amazon, 2020). Amazon assists small and medium-sized
businesses as well as people who just have a passion for selling by sharing store data, such as
which products are their greatest sellers so that if they want to sell a product, they can have an
idea of which product is selling the most. Furthermore, Amazon knows that in order for their
independent sellers to have a positive experience selling via their website, they must feel secure,
so Amazon safeguards their private information while offering the data and tools they require to
advance their brand.
Walmart offers a similar service where qualifying businesses can sell their products on
Walmart’s Marketplace. Similar to Amazon, Walmart also doesn’t share information with any
seller. Walmart also has a badge system where “Walmart regularly reviews seller performance.
Sellers who gives the best service earn a Pro Seller bandage on the item page” (Walmart, 2023),
which helps the seller stand out from the rest of the sellers in the Walmart marketplace.

Walmart+ is Having A Hard Time Taking Off

Companies have success tactics, but there are always techniques that aren't totally
working for them. To begin with, one of Walmart's strategies that struggled to take off was its
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Walmart Plus subscription, which was launched in September 2020. Walmart's idea behind
Walmart Plus was to become a “direct competitor equivalent of Amazon Prime, for which
customers pay a USD $12.95 monthly subscription fee” (Bradford, 2022). Walmart Plus offers
similar benefits to Amazon Prime, such as same-day delivery and savings on online purchases.
However, the difference is that Walmart Plus offers USD $0.05 gas reductions for its customers.
All the perks sound good. Unfortunately, Walmart didn’t receive the positive feedback it thought
it was going to receive. For instance, “some customers aren't willing to pay the fixed subscription
fee to activate these benefits. Also, some customers were put off Walmart Plus because their
coupons weren't accepted on the platform” (Bradford, 2022). Customers believed that Walmart
did not provide them with what they had requested. Customers desired quality, fresh food
delivered to their door, as other online shopping businesses do without exception.
Unfortunately, another strategy that has not worked for Walmart is not having customer
obsession as one of its top three priorities. According to the 2018-2019 American Customer
Satisfaction Index (ACSI), “Walmart, which had fallen to an index score of 71 in 2017, rose a
point to 72 last year, but it still finished as second-worst in the category" (24/7 Wall St, 2019).
This demonstrates that this is an area of Walmart's company that needs significant improvement.
Having high customer satisfaction may help Walmart acquire new customers, retain existing
customers, and improve its revenue. Thus, if Walmart does not learn to take into consideration its
position as one of the worst customer satisfaction companies, it might not see growth in different
areas, ranging from new customers to referrals to its services and profits.

Amazon's Success Strategies: Metrics and Prioritization of Customer Service

As stated before, Amazon is one of the biggest competitors for many companies, not just
Walmart. Therefore, let's uncover which two main strategies are making Amazon the biggest
competitor. The first strategy that Amazon uses is the strategy of using metrics to drive its
success. Metrics are designed to disclose the facts that must be discovered in order for an
organization to thrive. Unfortunately, in most large businesses today, measurements are
frequently utilized to support senior management's ambitions and assumptions about recent
business history. Despite how other businesses use metrics, “At Amazon, by contrast, metrics are
established in advance of every activity and specify what actions are expected to happen in ways
that can be measured in real-time. If the metrics show that activity is not having the impact that
was expected, action is required” (Denning, 2019). This technique allows Amazon to evaluate in
real-time if the activity they planned is providing consumer happiness. If it isn't, they know they
need to act and make certain modifications to increase their activity.
Furthermore, the second strategy that has helped Amazon become one of its most
powerful competitors is its prioritization of customer satisfaction above all else. Amazon has
learned that customer satisfaction is what makes their business successful, and “although there
are 14 leadership principles at Amazon, Leadership Principle #1 is ‘Customer Obsession’"
(Denning, 2019). Moreover, Amazon has been able to create an environment where every worker
knows that they need to have a passion for their customers. This environment arose from the
realization that in order to give online customers the best experience, Amazon had to
significantly improve its speed, quality of delivery, and flexibility, as that is what customers
wanted.
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Conclusion and Recommendation:

Implementing Amazon’s best strategies at Walmart

Amazon is often recognized as one of Walmart's primary competitors. Amazon has dominated
numerous industries, including retail, food, home entertainment, and so on, through online and in-
person shopping. Walmart also offers products in those same areas, but now that Amazon has
discovered a way to dominate those fields, Walmart is seeking to make a comeback and become
one of Amazon's major competitors in all fields. Therefore, the best recommendations that can
be made to assist Walmart in making a return and becoming a superior competitor are as follows:

1. Enhancing their online shopping experience. Walmart Plus, as pointed out before,
has run into the challenge of not having much growth. Customers felt that they
didn’t receive what they were expecting; quality, fresh food delivered to their
door, as other online shopping businesses do without exception, and lastly, the
ability to use their coupons online and in-store without running into any problems.

2. Using metrics for real-time data. This technique will allow Walmart to determine
in real-time if the activity they planned is providing consumer happiness. If it
isn't, they know they need to act and make some modifications to increase their
activities before it affects the company.

3. Prioritization of customer satisfaction. As stated previously, Amazon has scored

second-worst in the category of American Customer Satisfaction (ACS).
Therefore, by improving customer satisfaction, customer retention rates can
increase, as can customer loyalty.

Implementing these strategies that have worked for Amazon can help Walmart improve in areas
where they need it the most. As is well known, Amazon has dominated many of Walmart's retail
categories because it has figured out how to apply all of these methods to all of these services.
Thus, by implementing these strategies, Walmart has a high possibility of becoming one of the
biggest competitors in all the services that it already provides for its loyal customers.
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