WALMART/AMAZON CASE STUDY ASSIGNMENT
Walmart has been the major player in discount retailing for decades with its vast number of physical stores distributed across both rural and urban areas in the United States. Amazon has been the major player in online retailing and has had dramatic growth in recent years. After struggling for decades to develop their own online retailing business, Walmart purchased Jet.com in 2016 which provided Walmart with important expertise in, and constituted a significant commitment to, online retailing. In 2017, Amazon purchased Whole Foods which included 460 brick-and-mortar grocery stores. These acquisitions clearly signaled competition between Walmart and Amazon in both in-store grocery sales and on-line grocery, as well as merchandise, sales.
Your 500 words analysis of the case study entitled â€œWalmartâ€™s Omnichannel Strategy: Revolution or Miscalculation?â€œ should address the following issues/questions.
- What are the comparative advantages of Walmart and Amazon and how will these comparative advantages affect the payoffs from their different strategic decisions?
- Discuss the strategic interaction between Walmart and Amazon. Why did Walmart think it necessary to enter the on-line retailing industry and why did Amazon think it beneficial to have a brick-and-mortar grocery store presence? Did Walmart decision influence Amazonâ€™s decision and vice versa?
- How do the payoffs from their possible strategic decisions depend on the types of customer who are more likely to select purchases from Walmart over Amazon and purchases from Amazon over Walmart? When considering types of customers think in terms of different demographics and geographic location (rural versus urban for example).
- Why do both Walmart and Amazon consider it important to have both brick and mortar stores and a significant on-line presence?
While I do not want you to necessarily discuss the question below in your writeup (unless you want to), I think it is important to think about the competition between Walmart and Amazon in the short run and long run.
- Is Walmart or Amazon currently in a stronger strategic position? Who will be in a stronger position in 10 years? What important strategic decisions will Walmart and Amazon have to make in the future?
To complete this assignment, please carefully read the case study. To gain additional knowledge on the strategic decisions of Walmart and Amazon, feel free to read some of the over 300 articles cited in the case study (some are very interesting and provide additional details not contained in the case study), as well as any other sources you find (make sure you appropriately cite these other sources and do not plagiarize). I expect your 500 word writeup to be your thoughts in regards to the strategic interaction between Walmart and Amazon – I am not interested in quotes from others.
- The strategic interaction between Walmart and Amazon is too complicated to analyze using the basic game theoretic tools discussed in class to date. Therefore, I would suggest not presenting some normal form game or some basic extensive form game in your write up.
- I realize this assignment is somewhat open ended and students will have very different writeups â€“ which is great. This assignment is about synthesizing a large amount of information on a complicated strategic environment and then present a coherent analysis on the strategic alternatives available to Walmart and Amazon. and the tradeoffs associated with these strategic alternatives. The next two case studies assignments will be much more narrow in terms of the write up and will relate to specific game theoretic material discussed in class.