Summary
This is a case study of Walmart which is, the biggest retailer in US. The study is on the online market entry of Walmart, considering their competitor i.e. Amazon. The study tells about the revenue deficit of Walmart over its competitors, which has largely been decreased because of the lack of strategy implementation by the company. The study has told about the financial and the retail condition of Walmart, and tactics that the company can acquire to overcome the deficit.
Case Study
Competitive environment:
Recently, Walmart has decided to expand their business into online shopping. For the retail business, there is no other business which matches Walmart. But, online shopping can be very competitive for the company, because online giants like Amazon and Ebay have been largely in the business from a long time. The case which was discussed about Walmart, tells us that they have a great competition with Amazon, when they plan to go online. Amazon has been in business for a long time and their grounds are strong in online business. Analyzing the companys’ performace, there is a big competition for Walmart.
There are a lot of barriers for their entry, which mostly include the risk of decrease sales due to new market entry (Hendricks, 2014). The environment of online shopping is followed with the existing trends in the market, which the competitors have mostly introduced, like Amazon. The case also tells about different strategies like locker strategies, which have largely been acquired by Amazon to offer to their customers.
Legal issues faced by Walmart:
Generally, Amazon is the direct competitor of Walmart, and Amazon has taken all of its business to online stores. It generally is now a direct competitor of Walmart, because Amazon sells all products online which, Walmart sells in stores and it is feasible for customer to get everything at their doorstep, instead of going to the store and buying it. So, this has been the main issue for Walmart in their processes.
Resource Management:
Referring to the case, Walmart have the required set of sources to deploy in their business practices. Whether online or offline, Walmart has the skills which they can use in their business. It talks about the set of skilled staff, they have in their departments, and the efficient work they can take from them. Walmart is the biggest retail store organization, and they have the set of resources, like skilled staff, IT staff, and other resources which can be used in the development of their business core. There is no need to have any new resources because they can deploy the existing ones, as the case tells.
Financial challenges and opportunities:
Financial challenges for Walmart are discussed in detail, in the study chosen. Since Walmart has been involved in the online business, they create $9B annually, while Amazon has an annual income of $50B. It is a great threat and a challenge for Walmart, that why they are lacking behind. Getting into the online business also discusses that Walmart is new to the business and has to create appropriate measures to overcome it. However, it is a challenge for Walmart to overcome it by creating strategies and making new opportunities to enter into.
Marketing and brand development:
As the case about Walmart tells us, about the company being entered in the online shopping and making strategies to overcome their competitors. Developing new techniques and having different approaches is also beneficial for the company (Xavier, Moutinho & Moreira, 2015). The senior management had to develop different marketing techniques and developing their brands, because it is a new market for them now.
Other aspects of strategic dilemma:
The case tells us that Walmart directors had the locker tactics, where the customer can buy a product online, and get it from a dedicated locker at a Walmart store. Another technique was to make customers deliver products to their customers. It means that Walmart can make customers buy products for their neighbourhood customers, and in return Walmart will pay them. Merging with delivery services (UPS or FedEx) and making them deliver products to the customers is also considered by the company.
Recommendations for the strategic dilemma:
Walmart should acquire the strategy of locker tactics, which is a different approach and will help in achieving the overall revenue target for the company. Locker tactic will help Walmart in attracting more customers, and will enable them to shop online, and get that from the retail lockers.
Conclusion
It is important for a company to make certain strategies, when they compare themselves with the condition of the competitors. When entering the online business, referring to Amazon’s condition is very important for the Walmart directors, because the overall revenue deficit cannot be overcome without ignoring it.
References
Hendricks, K. S. (2014). Changes in self-efficacy beliefs over time: Contextual influences of gender, rank-based placement, and social support in a competitive orchestra environment. Psychology of Music, 42(3), 347-365.
Xavier, J. M., Moutinho, V. F., & Moreira, A. C. (2015). An empirical examination of performance in the clothing retailing industry: A case study. Journal of Retailing and Consumer Services, 25, 96-105.
