Grocery Wars Case Study PDF

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Q 1. Analyze Amazon and Walmart using the value chain and competitive forces model.Answer: Competitive Forces Model: Focus on the firm, firm’s environment and its competitors.In the retail domain, both Amazon and Walmart are fierce competitors and compete against each other online and offline. From ...

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Q 1. Analyze Amazon.com and Walmart using the value chain and competitive forces model. Answer: Competitive Forces Model: Focus on the firm, firm’s environment and its competitors. New Market Entrants

Substitute Products F Fir

Suppliers

C C Customers

In the retail domain, both Amazon and Walmart are fierce competitors and compete against each other online and offline. From an online perspective, Amazon has established its presence for a very long time as a dominant player by offering various products like groceries, electronics, apparels, etc., for all age groups from kids to older people at very competitive pricing. Amazon has a matured and highly organized supply chain system that maximizes the customers shopping experience. On the other hand, Walmart is a dominant player known for its brick-and-mortar stores and considered the largest seller of groceries in the USA. However, Walmart has little presence in the online market as it is still working to catch up with leading online market retailers like Amazon. Walmart has a loyal base of offline shoppers from where it attracts enormous traffic to drive its grocery sales. As the Porter model focuses on identifying only competitive forces and generic strategies, let’s move to a value chain model that focuses on specific activities on which competitive strategies can be applied and have a maximum strategic impact from the use of information technology. Value Chain Model: Amazon provides Amazon Prime Membership, Amazon Fresh, Prime Pantry and Prime Now to customers. It offers various products at a lower price and quick delivery of products. Along with this, Amazon gives customers across certain Whole Food stores to pick up the food from the lockers and return them as per their convenience. In comparison, Walmart is gradually seeing its sales growth increasing year on year by partnering with Uber technologies and other providers to provide delivery and pick up services to the customers

Q 2. Compare the role of grocery sales in Amazon and Walmart’s business strategies. Answer: 1.

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Amazon After acquiring Whole Foods, Amazon stepped into the physical store’s presence of buying groceries from being an ecommerce player. Amazon sells a variety of products with different delivery options through its multiple platforms. Amazon offered its loyalty program to Whole Food’s customers to provide better prices on the groceries and 5% cashback Amazon uses whole good stores as a warehouse to deliver products faster to customer

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Walmart Walmart is already an established player in the brick-and-mortar model of selling products. Walmart has made a big push into the ecommerce segment to get more of its instore customers to shop online. As per the Euromonitor project, the online market is expected to grow 15 times than the restaurant business. Walmart looks to grab this opportunity and now provides customers with online order and pickup program. Walmart’s Retail Link system links suppliers to stores for superior replenishment system

Q 3. What role does information technology play in these strategies? Answer: Amazon has a decade of experience in the online market utilizing its niche skillset and expertise to always stay ahead in the e-commerce domain.  

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With the addition of Amazon Echo products to its portfolio, Amazon uses Whole Foods store to drive the business of its Echo products and other in-house products. Having built a robust supply chain system over the years and using a whole food network, Amazon is eyeing to reach a more significant number of customers using the best of both companies. With a vast number of suppliers and distributors across the world, the information technology of Amazon has achieved operational excellence and provide a greater sense of customer satisfaction. Walmart is still new to this field and has a long way to get the expertise to use information technology to their advantage. Information technology has considerably reduced the time it takes for a product from placing the order to reaching the customer.

Q 4. Which company is more likely to dominate grocery retailing? Explain your answer. Answer: Amazon is more likely to dominate the retail market due to its online presence across different countries spread across multiple continents. Amazon offers its customer a long list of services like Amazon Prime, Prime Now, Kindle, Echo products, In-House products, etc., which in the current world, not many companies can do so. Also, Amazon has a loyal fan base and provides them with a range of products at a lower price point. Amazon ranks high in customer satisfaction by providing them with delivery from 2 hours to 2 days, depending on the locations. Shorter delivery time has reduced the time a product takes to reach its receiver using the robust information system Amazon has achieved over its

decades of expertise. But that doesn’t mean that Walmart cannot compete. Walmart is a leader in the offline market of grocery sales and loads of other products and still sees enormous sales in its retail business. There is still a large section of society that prefers to visit stores and have an in-store shopping experience. Walmart is still very successful in maintaining this experience with its customers. If somehow Walmart manages to captivate Amazon’s customer to purchase online from its stores, Walmart can give a run for its money to Amazon....