Assignment 2

1. Analyze Amazon.com and Walmart using the value chain and

competitive forces models
Value chain model of the foremost common business level are:
● Being a producer of the product with low product prices:
- Both have the upscale food market chain
- Purchasing Whole Foods helps Amazon become a major player in the
grocery industry.
● Differentiate their product and services
- Products: Analyze Amazon.com and Walmart are both chain stores that
sell a wide variety of products, such as food, household goods, hand-
carried goods, ... and products that suit human needs.
- Services: In order to attract a lot of customers, service is an indispensable
part, such as fast payment service to help customers not have to wait for
Walmart, fast and convenient safe delivery service for Amazon, and
discount services of both, or try all kinds of products ... The purpose of
the service is to make customers feel comfortable and fast when buying.
● Both Walmart and Amazon ever-changing the scope of the competition
either by means of increasing its market reach to the world market and to
slim the market.
The market capture is also done very well by the two businesses.
Sometimes they want to expand the market abroad to find customers, create
great profits for the business. At other times, they narrow the market for the
purpose of letting customers remember them. and loyally buy products from
them.
→ The value chain model, a model that specializes in primary and
support activities that add price to products and services within which the
data system is best applied to realize a competitive advantage.

● Some of Walmart's competitive advantages from a value chain

perspective include:
- Distribution capabilities: efficient distribution (e.g. cross docking),
predominance of Walmart’s own distribution centers and “inside-out”
location strategy
- Partnership relationship with suppliers: integrates suppliers via IT &
treats them well in terms of pricing, they are more partners than “value
takers”
- Advanced data mining: active collection and usage of customer purchase
behavior info
 - Workforce culture: customer-oriented workforce motivated through
generous monetary participation and belief in Walmart’s culture
- EDLP: maintenance of “Everyday Low Prices”
● Some of Amazon's competitive advantages from a value chain
perspective include:
- Strong technological infrastructure with a single platform
- High investments in technology development (e.g., Kindle)
- To be the best leverage digital products
- Great product forecasting system
- Print on demand
- Constantly soliciting suggestions on new products
- Easy and fast payment system
- 24 hour operations
Competitive forces model, wont to describe the interaction of external
influences, specific threats, and opportunities that have an effect on the
structure of the business by:
· Provide technology that allows competitors to contend in terms of worth
and new players within the market.
· Improve the data obtainable to customers in terms of accelerating the
negotiation power on the worth
· Reduce power provider
· Substitute merchandise.
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. They are both competitors in the real world
as well as in online retail.
- Amazon already has a giant presence on the internet with everyone purchasing
electronics to books to now grocery with Amazon acquiring Whole Foods. This
new form of grocery shopping has made the task easy for everyone, a few clicks
on a screen and you have a week’s worth of groceries. Where Amazon exceeds
the most is their variety of goods and many price tags, giving different kinds of
buyers different kinds of options.
- However, Walmart is stuck to the confines of its physical stores, and their
online shopping is in its infancy while Amazon has been around for a while.
- The competitive forces models:
● Traditional competitor: Amazon vs Walmart competition in the
marketplace
● Low-cost leader: Amazon and Walmart provide the lowest price to
customers and keep competing in the lowest price
● Newmarket entrants: both are the biggest company in E-commerce and
physical stores
● Substitute Products and Services: the competition in discount of two
companies is prominent

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

business strategies.
Amazon and Walmart come from two different retail platforms: Amazon
is online shopping and Walmart is physical shopping.
Amazon purchased Whole food to raise service for Prime membership
service customers. Amazon has ceaselessly been committed to net commerce
and doesn't have a standard physical store. Be that as it may since the company's
procedure adjusted, Amazon took AN imaginative approach to interfacing on-
line and offline. Amazon employs a substitution trade show to provide later
items from physical stores to clients in an exceedingly pile of your time.
Amazon also employs tons of cashback offers in its association with
Wholefoods. Amazon and Wholefoods are integration deals frameworks to
serve customers.
As the largest retailer in the United States, Walmart maintains its position
in the retail sector through a series of oversized physical stores. Walmart uses
E-commerce to support its physical store system. In any case, because of the
great advancement of e-commerce, Walmart must increase its net commerce.
Walmart's advantage is that it has a few physical stores to promote e-commerce.
To get ahead of Amazon, Walmart had to grow its online basic needs trading
business. Walmart partners with Uber and differentiated carriers for
transportation
In short, both want to expand their market size and customer network.

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

Amazon:
 - Amazon Go; Amazon Fresh: a combination of artificial intelligence,
computer vision, and data pulled from multiple sensors to ensure
customers are only charged for the stuff they pick up. Cameras, smart
shopping carts, Dash carts are used to track items as they're taken from
shelves. => Customers scan, pick the items they want, and go. No lines
and no checkout.
- Sensors and software to let shoppers pay for purchases without waiting in
line to check out.
- the app that permits users to scan the product and get them organized via
Amazon
- The app gives caretaker service and 24-hour client support for patrons,
and simple accessibility with one-tap access to talk to a service agent
who’ll assist customers
- Amazon Prime, E-commerce are soaring and food-delivery businesses are
taking off because people are too busy or otherwise occupied to leave
their homes to go out and shop, and 2 hours delivery => the upscale
market should grow, even as it offers discounts to lower-income
Americans.

Walmart:
- AN app, website => Customers order things online from Walmart.com
=> to bridge the gap between in-store pickup and wait time so customers
will place an order and devour in-store while not having to face in line.
- Click-and-collect programs -> customers stand-alone grocery pick-up
sites, and scanning and paying for items with smartphones => No need to
queue and wait a long time.
- Online grocery sales were a key part of Walmart’s, home delivery, e-
commerce sales growth => expand the market
- Deliveries are handled by Uber Technologies and other providers with
fast delivery.
- Create highly efficient transportation routes, and manage customer
relationships and service response logistics.

In conclusion, the role of information technology playing in these

strategies is improving customer services, developing business, expanding the
market, reducing human resources, and competing with other companies in the
market.
 4. Which company is more likely to dominate grocery retailing?
Explain your answer.
They both have undeniable strengths in grocery, and their prospects for the
future are bright. Amazon and Walmart both expect to be #1 in every venture
that they enter into. It depends largely on their business model.

It’s very easy to say Amazon is more likely to dominate grocery retailing
because they have such an online presence and a loyal following from every
customer purchasing things daily. Amazon is a master at providing what it calls
"consumer convenience". Americans are ordering more of their groceries and
meals online. A study commissioned by market research firm Euromonitor
predicts that the online market is expected to grow 15 times faster than the rest
of the restaurant business until the end of the decade. Not to mention their
products and prices, Amazon Prime services with many discounts (As of
September 2017, Prime had 49 million subscribers in the United States,
representing about 44% of households),... and now Whole Foods that increase
physical store competitiveness in the grocery market. It takes Amazon’s
physical presence to a new level, with more than 460 stores in the United States,
Canada, and Britain. Amazon may continue to sell groceries online, but it may
also establish a presence in physical retail stores. To be clear, Amazon is not
only a great online store at your fingertips with goods delivered to your door
within 1-2 business days but it is also doing a great job when it comes to
providing a great customer experience about direct grocery shopping. The
primary goal of Amazon’s grocery growth is to continue its vision as a one-stop
shop for all of a consumer’s needs. The ultimate goal will eventually be to
dethrone the incumbent Walmart and redefine the way consumers shop for
groceries. So yes, Amazon is more likely to dominate grocery retailing.
 But that’s not to say that Walmart can’t compete, they have the potential. It
has been the United States’ top grocer for many years, but it isn’t the main e-
commerce destination of choice. Its e-commerce growth has been impressive in
the United States, Walmart’s online order and pickup service were available at
2,000 stores by the end of 2018. If Walmart can somehow captivate more and
more customers into purchasing online, they can surely have a competitive edge
against Amazon, especially with the presence of their physical stores. Time will
tell if it is enough to make Walmart.com the #1 grocery destination or if it will
remain in a distant second place.