When analyzing the advantage points of Amazon vs. Walmart, the value chain and competitive force mode for each company is the most important aspect in competing in the e-commerce market. As a quick overview, Walmart was established as a physical retailer back in 1962 and is recognized as the world’s largest retailer and recently entered into the world of e-commerce a few years ago. Amazon joined the dot-com scene back in 1995, and has grown into the largest e-commerce retailer in the world, without a physical location.
Amazon and Walmart both sell electronics and general merchandise, which is the most prominent area of competition between the two companies. It was said e-commerce is estimates indicate that e-commerce could account for 15-20 percent of total retail sales in the U.S. over the next ten years, as more and more customers prefer to purchase items online. In this case, Amazon is in the best position to benefit.
Amazon’s powerful technology platform is large enough to support sales of other companies on their website. This gives them an advantage over other e-commerce websites because they can focus on their own business while integrating other products into their website and collect 10-20 percent on the sale. This allows them to carry a wider array of products, while keeping inventory costs low and increasing their revenue. On the other hand, Walmart has a much larger brand than Amazon. They are known to the lowest price because of its size and ability to keep overhead cost to a minimum. They can afford to sell a hot product at a low price because they will make it up in volume of sales. In addition, they have the most efficient inventory system that restocks merchandise as soon as the item reaches the checkout counter. This gives them an advantage to carry exactly what customers want at all times.
Walmart believes Amazon’s “Achilles’ heel” is the