Walmart make sense so shop elsewhere. Amazon’s newer

Walmart and Amazon IT StrategiesWalmart and Amazon’s BusinessModels StrategiesTworetail giants, both with global reach and fantastic revenues, are competing forthe same consumer influence, employing different business models andstrategies.  Walmart, a giant inbrick-and-mortar sales, with its presence in virtually every neighborhood, andAmazon, an online goliath, reaching every corner of the world connected to theinternet.

  Walmart’s business model hasbeen a traditional retail sales model, with a strategy to build a physical storewithin reasonable distance to its consumers, and lower the prices of its goodsto the point where it does not make sense so shop elsewhere.  Amazon’s newer business model is 24-hourpresence at consumer’s fingertips, through its website, with a strategy of easyonline shopping, availability to comparison shop and pick the right productwithout leaving home, while offering cheap or free and fast delivery toconsumer’s doorstep.  Though Walmart hasa fully functioning e-commerce website, it realizes that it is losing itsposition as the leader in retail sales, while leaving a chunk of business onthe table for Amazon to profit from, unless it employs some of the samebusiness strategies as Amazon, and expands the company’s IT capability.  Since IT helped influence Amazon’sorganizational strategies, it is imperative for Walmart to understand that inorder to compete with Amazon, it also has to modify its organizationalstructure and strategic planning to accommodate for the new IT influence (Laudon& Laudon, 2016).    The Role ofInformation TechnologyWalmart’smission is well known: “We save people money so they can live better”(Corporate, 2017).

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 This worked forWalmart for over 5 decades and proved to be profitable and convenient for theconsumer.  With the rise of onlineshopping popularity, however, sites like eBay, Yahoo! and Amazon became moreconvenient for Walmart’s customers. Offering on-demand price and product comparison, and the ability topurchase and receive an item without leaving their home or office, positionedAmazon ahead of its traditional physical retail competitors through its use ofinformation technology. Though they have over 50 fulfillment centers, 23sortation centers, and more than 90,000 full-time Amazon employees, it’s thecompany’s web presence that solidified its success (About us, 2017).  As a matter of fact if it was not for theinternet connectivity around the globe and Amazon’s commitment to cutting-edgeIT development, the organization would not have become the online sales leaderit is today.

Thereare two problems affecting Walmart’s ability to stay in its leadershipposition.  First, Walmart’s averagecustomers who earn $50 thousand or less per year, are now able to use theinternet and smartphone technology to reap the benefits of online shopping.  At the same time, the stabilizing economy isallowing them to no longer have to look for the best bargain, and instead savetheir time and shop at Amazon as a more desirable option.  Second problem is that Amazon is no longerselling just books and CDs, as it now stocks items customarily sold at Walmart.  With Amazon’s sales of $67 billion, comparedto Walmart’s only $9 billion through their online store, the latter isconcerned about the IT development impacting their sales bottom line (Laudon& Laudon, 2016).     There isno question that Walmart has a significant physical presence with over 66% ofthe U.S.

population living within a 5 mile radius of a physical Walmart,totaling over 4,000 stores, supported by an extensive supply chain (Laudon& Laudon, 2016). The question is, how can Walmart harness the power of ITto support not only these stores, but also grow their e-commerce capability,while keeping Sam Walton’s affordability promise to consumers, and reducing theoverall cost of shipping. In order to stay competitive, the company must employIT-enabled organizational strategies to reduce their overhead, while hiring newIT professionals and repurposing their established physical supply chain tosuit their new growing e-commerce capability.OrganizationalStrategies Influenced by ITAmazon’sorganizational strategies have been influenced by Information Technology fromthe beginning.  The company investsheavily into new IT tools to stay on the forefront of technologicaladvancements.  In 2014 the corporationannounced a platform called Fire Phone,  designed to implement its 4-camera capabilityto track a person’s face in 3D, similar to a holographic image.  Amazon’s 24-hour customer support, Maydayallows the service agents to access their user’s screen to assist in website navigationissues.

 According to Laudon and Laudon(2016), Amazon’s Firefly feature can identify over 100 million different items,enabling the consumer to simply point their phone at an item, and immediatelyorder it from Amazon.Walmarthas increased their IT investments by funding over $300 million to acquire 5high-tech organizations, while  hiring hundredsof code writers and engineers.  Thisenabled the company to create an application called Endless Aisle, which allowsits customer to place an instant order through a smartphone.  For the 25% of Walmart customers who do nothave credit or debit cards, this app offers an option to pay with cash (Laudon& Laudon, 2016).

                 The Code Writers hired by Walmart implementeda software application which enabled their merchandisers to view competitor’spricing in real time and lower website prices to stay competitive.  Social Media Analysts hired by Walmart gather datato stock more trendy and upscale items to entice those consumers thattraditionally do not step foot into a physical Walmart store.  App Developers hired by Walmart have beentesting an app, capable of detecting when their customer is physically insideone of their stores, push discount notifications straight to their smartphoneand allow them to scan items on the go, for a faster and easier checkout  process (Laudon & Laudon, 2016).     Both organizationsrealized that their company strategies have to involve IT, for Amazon it isemploying IT for more innovative ways to serve their customers, and for Walmartit is utilizing IT to be able to penetrate the e-commerce market to staycompetitive.  Realizing that physicalstore presence alone is no longer going to guarantee Walmart their leadershipposition in the 21st century, yet letting Amazon do what they dobest, while penetrating online market share and maintaining their low prices,would at least ensure that Walmart can position itself for survival for thenext decade.

  And for Amazon, staying ontop of current technology ­­­­trends would ensure that other large onlinecompetitors would always be playing catch-up to this e-commerce giant.


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