Both Wal-Mart and Amazon are considered as the biggest companies in the retail industry, with Wal-Mart considered as a leader in the traditional retail business, while Amazon is a leader in e-commerce. The business strategies that the two companies have adopted make them two of the world biggest organizations globally. In this light, both of the companies have developed and implemented business strategies that have enabled them to reach their scales regarding business success. The growth of the two businesses has been tied to the exploitation of information technology to ensure that they maximize their internal business processes.
From the case study, it is identifiable that Wal-Mart has been increasing investments in its online business, consequently acquiring five tech companies, and hiring more than 300 code writers as well as engineers. The information technology teams enable the company to build rather than purchase innovative provisions that allow the company to implement its strategic systems. The advantage of using an in-house strategic system is that it enhances the alignment of an organization business strategy and the solution to be derived from the system (Khosrow-Pour, 2018). This provision could be used to indicate that Wal-Mart has been successful in enhancing the provision to maximize advantages related to harnessing the power of e-business, internal business adjustment processes, and e-procurement.
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On the other hand, Wal-Mart cannot be regarded as a technology company since technology is not a fundamental enabler of its business strategies. However, IT has been a critical component of Wal-Mart’s competitive advantage since the company focuses on allowing the technology executives, including the leaders of the different business units to collaborate on projects being implemented and when making strategic decisions. Kabiraj and Mukherjee (2000) describe such an arrangement, especially in the implementation of IT projects, as an IT duopoly. During the collaborative efforts, the affected business units are required to acknowledge different IT provision, consequently incorporating them in the business plan after the derivation of a suitable business strategy. In this light, the technology staffing mix, as well as the organizational structure, enables Wal-Mart to overcome retail challenges from competitors, therefore adapting to remain competitive in the online retail market.
Even though Amazon does not have an extensive selection of products for sale as Wal-Mart does, the platform provides the organization with a competitive advantage. Amazon began as a store that was initially focused on books and music, but it expanded into different segments with time. The fundamental model that the organization uses is the Business-to-Consumer (B2C) business, model to provide different projects and online store features for customers. To ensure that its business model functions effectively, Amazon uses data to make business and strategic decisions (Rankin, 2015). In this regard, a considerable number of people know that Amazon’s algorithmic approach to the manner in which the company presents different products to customers, including the use of real-time data for the pricing. The implementation of such a technological provision enables the company to collect volumes of data that could assist in the realization of a stronger decision-making capability.
From the data collected, Amazon focuses on tracking trendy items through tracking purchase patterns. During the tracking process, the company uses social media data as well as data from other sites to select trendy products that would fit the need of their customers (Rankin, 2015). For this reason, Amazon could be considered as a company that keeps up to date with trendy commodities, which is a strength that enables it to not only expand its offerings but also provides their customers with competitive product prices. Conversely, the company has permitted third-party sellers to sell their products using the company’s website, which is one of the opportunities that the organization is harnessing to ensure that the product selection at the disposal of customers is more extensive than it has been. It is possible for an individual that has been using the platform for years to take note of the increasing number of products. Conversely, Amazon is using Smartphone technology to acquire data that can ensure that the platform improves regarding ensuring that the needs of consumers are met. The strategic decision is informed by the need to use technology that is convenient for customers.
To conclude, it would be suitable to take note of the provision that Wal-Mart and Amazon are both large retail organizations that have been using technology to inform their strategic decisions. As indicated, Wal-Mart uses in-house strategic systems that make it easier for the company to align its technological systems with its business strategy. On the other hand, Amazon is making it possible for third-party sellers to use the company’s platform to sell their commodities. The strategic decision is informed by the need to expand the product offered by the company, which is one of the elements that might attract more customers. The strategies considered for use by the two organizations work to their benefit since they not only follow the business models developed by the organizations, but they also enable them to harness the opportunities available in the market.
Reference
Kabiraj, T. & Mukherjee, A. (2000). Cooperation in R&D and Production: A Three-Firm Analysis. Journal of Economics, 71 (3), 281-304.
Khosrow-Pour, M. (2018). Advanced methodologies and technologies in business operations and management . Hershey, PA: Business Science Reference.
Rankin, J. (2015). Third-Party Sellers and Amazon – A Double-Edged Sword in E-Commerce. Retrieved from: https://www.theguardian.com/technology/2015/jun/23/amazon-marketplace-third-party-seller-faustian-pact
