Walmart and Amazon’s Business Models and Business Strategies
As the world’s largest discount retailing company with $476 billion in fiscal 214 sales, Walmart operates retail stores, warehouse clubs, supercenters, and websites (Banjo, 2014). It has 11 e-commerce websites in 11 countries and over 11,400 stores across the world with 4,000 retail stores in America (Banjo, 2014). Over the years, Walmart has steadily beaten other retailers in both growth and profitability as well as pay increasing dividends through competence in storage, distribution, and purchasing operations. On the other hand, through its website Amazon.com, Amazon is considered the largest online retailer in the world. Although it previously focused its services in North America and on the sale of books, Amazon is now increasing its global presence and sells other goods that are on demand in the marketplace, including furniture, apparel, software, food, video games, and jewelry. Also, the company manufactures consumer-friendly electronics, for instance, the Amazon Kindle e-book reader.
Amazon’s primary business strategy is based on its low prices, a variety of selection, as well as reliable and fast shipping (Schuman, 2013). The company has also invested in Amazon Logistics which is a department that is tasked to reduce its dependence on FedEx and UPS for shipping. Although Walmart was founded as an off-line retailer, it has changed its business strategy from the traditional physical store to online retail store due to competition from other e-commerce companies. However, the company’s supply chain requires over 4,000 global physical stores (Laudon & Laudon, 2015). Conversely, Amazon has established a highly successful and recognizable brand in online retailing through its development of extensive warehousing facilities that allow them to distribute their merchandise efficiently. Moreover, Amazon has premium shipping service which provides fast and affordable two-day shipping. Compared to Amazon, Walmart is associated with the lowest prices as and has the flexibility to offer its customers on any specific item.
Role of Information Technology in Walmart and Amazon
Information technology has played an essential role in the success of both Walmart and Amazon in their everyday low prices. Barcode scanning which Walmart first innovated and the point of sale analysis have enabled the company to deliver services fast to its clients. The company’s websites use software to observe prices of the multiple online retailers in real time and lower some of its items if necessary. Walmart is also able to select more popular products by tracking patterns on social media and search data (Laudon & Laudon, 2015). On the other hand, Amazon has relied on information technology in delivering services to its clients. Notably, people can order various company’s products via its website. At Walmart, various IT professionals such as apps developers, as well as digital and online developers, are involved in ensuring efficiency in the delivery of services and products. Amazon has a team of IT professionals who work round the clock to provide security of its websites and apps.
How IT Helps Influence Walmart and Amazon’s Organizational Strategies
Technology has dramatically influenced Walmart’s organization strategy as its structure has been divided into two features based on function and hierarchy. The hierarchy feature is about employees being ranked according to their authority. Conversely, the function-based element involves groups of workers performing specific duties. Walmart has an online and digital division that deals with technological functions. Information technology has enabled Amazon organization structure to have extensive control over its worldwide e-commerce operations (Schuman, 2013). The company has a functional organization structure that establishes a system of interaction among its over 2 million workers. Notably, through the function-based groups, Amazon can facilitate successful e-commerce operations in the whole organization. The company seeks to establish its operations in new markets with its ongoing global expansion.