FIVE STARS GROUP

Le Thi DaoDo Thu TrangTran Thi Tuyet NhungTran Hai HaLe Anh TuanMarch 25th, 2014 AMAZON vs WALMART

Which Giant Will Dominate E-commerce?

1/ What concepts in the chapter are illustrated in this case?2/ Analyze Amazon and Walmart.com using the value chain and competitive forces models3/ The management, organization and technology factors that have contributed to the success of both-Wal-Mart and Amazon?4/ Compare Wal-Mart's and Amazon's e-commerce business models?5/ Choosing Amazon or Walmart?

Project Description

E-commerce UbiquityGlobal reachDigital goodsB2B- B2CTransaction broker

1.What concepts in the chapter are illustrated in this case?

2. Analyze Amazon and Walmart using the value chain and competitive forces models.

Business Value Chain Model

Views firm as series of activities that add value to products or servicesHighlights activities where competitive strategies can best be appliedAt each stage, determine how information systems can improve operational efficiency and improve customer and supplier intimacyUtilize benchmarking, industry best practices

Methodology

Walmart: can lose money selling a hot product at extremely low margins and expect to make money on the strength of the large quantities of other items it sells.

Wal-Marts efficiency, flexibility, and ability to fine-tune its inventory to carry exactly what customers want have been enduring sources of competitive advantage.

Wal-Mart also has a significant physical presence, with stores all across the United States and in many other countries, and its stores provide the instant gratification of shopping, buying an item, and taking it home immediately, as opposed to waiting when ordering from Amazon

Amazon: We bring the items to your doorstep. You dont have to fight through traffic or find a parking space.

The value chain model:

Michael Porters competitive forces modelProvides general view of firm, its competitors, and environment

Five competitive forces shape fate of firmTraditional competitors New market entrants Substitute products and servicesCustomersSuppliers

Methodology

Porters Competitive Forces Model

Traditional competitor: Amazon vs Wal-Mart competition in marketplaceLow-cost leader: Amazon and Wal-Mart provide lowest price to customer and keep competing in lowest priceNew market entrants: both are the biggest company in E-commerce Substitute Products and Services: the competition in discount of two company is prominentCustomers: no mentionSuppliers: no mention

The competitive forces models

Amazon developed a value chain of itself to internal it can operationally best add value and maintain a competitive advantage. They used the value chain model from Michael Porter's book, "Competitive Advantage: Creating and Sustaining Superior Performance."

AMAZON.COM

3.What are the management, organization, andtechnology factors that have contributed to thesuccess of both Wal-Mart and Amazon?

The management, organization, and technology factors thathave contributed to the success of Wal-Mart:

The management, organization, and technology factors thathave contributed to the success of Amazon:

4. Compare Wal-Mart's and Amazon's e-commerce business models. Which is

stronger?

Amazon has expanded from a Business-to-Consumer (B2C) that functionly focuses on business buyers1-Click Ordering, Customer Viewing, Recently Viewed Products, Keyword Auto-fill on the product search, Your Personalized Store, and Items to Consider.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 technologyWALMARTThe greatest success story of e-business and B2B implementation that dominance the North American retail market.Using a pull model where customer demands drive the suppliers. But not always good for suppliers and customersEDI 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 reliableAMAZONe-commerce business models

Consumers associate Wal-Mart with the lowest price, which Wal-Mart has the flexibility to offer on any given item because of its size and ability to keep overhead costs to a minimum.

* Wal-Mart is clearly the bigger and stronger of the two.

Compare Wal-Mart's and Amazon's e-commerce business models. Which is stronger?

We choose to make my internet purchases in Amazon with considerations as:5. Where would you prefer to make your Internet purchases?Questions & Discussion