Amazon’s Competitiveness in Five Years
Amazon’s continued customer satisfaction originates from the company’s flexibility to adapt to the dynamic nature of the global supply chain. Therefore, the organization has the potential to outshine competitors such as Walmart on a worldwide scale. Firstly, surpassing major competitors to clinch the most valuable retailing organization in 2015, served to improve Amazon’s image as a global brand. For instance, the retail world is transforming very fast, and only the most innovative companies will match the technological pace, which identifies the global supply chains (Porter & Heppelmann, 2014). Customers are likely to align with Amazon over the organization’s significant competitors because of the two reasons.
While Walmart and Amazon’s other competitors deal with physical products, Amazon has improved efficiency in its supply chain management approaches. The introduction of the two-day shipment services under the Amazon Prime service creates more satisfaction to customers through guaranteed delivery of the items within the specified period in comparison to its competitors. Additionally, reaching customers cost-effectively has been the organization’s strength against competitors such as Walmart, through leveraging technology, efficient management of supply chain practices, and excellent inventory management. Consequently, vendors who use the Amazon platform, utilize available customer fulfillment zones, strategically located to ensure the efficient delivery of goods through Amazon.
Nonetheless, Amazon is the retail customers’ topmost choice, but the delivery of low-cost goods such as toothpaste to the customers’ doorstep would not be feasible. Accordingly, customers would buy low-cost goods and services through the brick-and-motor stores. Therefore, an excellent question to ask would be, “Would Amazon review its supply chain strategy to accommodate low-cost goods and services by building the brick-and-motor stores?” Answering the question requires in-depth reflection of Walmart and other competitors who have a relatively large number of brick-and-motor stalls. For example, Amazon could be the best retailer (according to the 2015 report), but Walmart may continue to surpass the organization in annual revenue because of leveraging low-cost goods like toothpaste through brick-and-motor stores.
Relative Prices on Amazon Price and Elsewhere
Amazon Prime is a premium service enjoyed by customers who subscribe either annually or monthly. However, the cumulative price of an item bought through the Amazon Prime is relatively higher than the regular Amazon platform. Reasonably, customers using the service have a mixed interpretation of whether they pay for the service or guarantee of getting the item in two days. The customers pay for the assurance of getting the goods and services in two-days. The service-based aspect of delivering purchased items to the customer in two days makes a weaker interpretation of the Amazon Prime because it does not represent the Amazon’s efficient supply chain management and inventory practices (Christopher, 2016). Therefore, the customers settle for the guarantee of getting the item in two days, contrary to the service of delivering the same item over the same period, albeit at a lower price.
Opportunity to Venture into the Logistics and Supply Chain Business
The logistics and supply chain business is lucrative for the organizations to venture, but it has a disruptive impact on the delivery partners in the industry. For instance, the delivery partners, joining forces with suppliers in the industry, could influence the prices of goods and services (Porter & Heppelmann, 2014). Reduced revenue for the retailers could be the impact, forcing Amazon and other players in the retail industry to shun any attempt of creating the supply and logistics business. Consequently, it is not advisable for Amazon and other players such as Walmart to venture into the proposed business.