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Amazon is American multination technology company founded in 1994 and is based in Seattle, Washington. Companies main focus was e-commerce but later explored in cloud computing, digital streaming and artificial intelligence. Its now a giant company and comes in Big four along with Apple, Facebook and google. Amazon being a retail company too has many competitors, one of the big competitions is Walmart. Walmart is American multinational retail corporation founded in 1962 that has franchise of hypermarkets, departmental stores and grocery stores. Walmart has around 11,368 physical stores across the worlds. Also, Covers almost all cities of United States. Being old, long held establishments, easy accessibility and reasonable price makes it a big threat to giant Like Amazon. This paper will provide market analysis on both the companies based on 4 P’s like Product, Place, Price, and promotions. Both companies Amazon and Walmart strategies, Objective, strengths and weaknesses. Analysis of target markets and companies’ vision.
Amazon being the world’s largest ecommerce marketplace, started in 1994 as a website that’s sells books but has vision “everything store” (CEO Jeff Bezos). “Amazon” named itself after largest river in the world which discharge of water in the world. Keep this spirit alive, from selling books in Benzos’ garage, company to becoming giant retail ecommerce industry in the world. Amazon is now worth is a Trillion company. Amazon has not restricted its target audience to book buyer also given many retail sellers platform to sell their products. Also expanding its product and service line, Amazon provides Amazon web services, Cloud storages, Amazon Prime, Electronics Like Alexa, Fire tablets, Amazon fresh, Amazon restaurants, Amazon Art, video, Business, Drive, Amazon Basics, STEM Club, entertainments etc. On the other hand, Walmart has its monopoly because it ownes physical retail stores almost everywhere in the world. Walmart being one of the giants provide products such as retail goods in variety of categories. Some of the services they offer are Photo Services, Pharmacy, Financial services, wireless services etc. To compete with Amazon are planning to work on restaurant services too.
Marketing Strategies and Objective
Amazon is now global expanded and has localized portal for every country. With the expansion they have globalized fast delivery. Amazon leadership strategy focus at customer being the priority providing maximum value for them and at lower price. Aims to make Amazon most go to website, easy, simple, and with plenty of products and with customer reviews. Amazon has pioneer in almost all the products in retail store, extending its product line to furniture, Fresh grocery, restaurant and almost all the household things. The specific measures taken by amazon are discount for members through prime members program, free shipping facilities. Various option for delivery like 1-day shipping, 2 days shipping, express shipping options. This ecommerce company provides no state Taxes, hence lowering down the prices. On only in Amazon has products they provide lots of services examples, use big data analysis to map customer behaviors, cloud services, Amazon web services etc. Also, they started producing few products by itself and called them Amazon basics. Most recently amazon started new service called Business, providing customer ability to customize their own pages and make profit by selling Amazon products. Amazon also make good strategies for return policies, like home pickup, and various drop options like UPS, and recently tie up with Kohls.
Amazon as wanted to extend by increasing target audience from internet user to general customer by trying to open physical stores. They are now trying to tie up various companies like Kohls. Last year, Amazon acquired Whole Foods hence strengthening its customer base and getting physical stores to compete with giants like Walmart. Services Like Amazon Go, are first of its kind where customer can shop without standing in long lines and without cashiers or checkouts. Most recent brick-and mortar ventures are Amazon 4-star, aims to sell products in store that has 4 rating.
Walmart on other side has colonized all the world with their physical stores. Now they strategize to grow online. Recently Walmart acquired many online companies like Jet.com, Hayneedle.com, Shoes.com, Moosejaw, and Modcloth.com, commitment to becoming a key ecommerce player. Walmart is trying to add more items to its website in different ways:
Partnering with brands like Lord & Taylor, for its extravagant dresses, and Fanatics, for its sports apparel. It has acquired online-first brands like Moosejaw, which now has room on Walmart.com exploring furniture options, along with other services also rolled out a grocery delivery service across the country. “Food is a main part of Walmart’s online business, and the retailer is planning to have 1,600 stores equipped for grocery delivery, and 3,100 grocery pick-up hubs, by the end of this year” (www.CNBC.com). “I think the winning play in grocery will be order online, pick up in store, and I think Walmart is best positioned to do that,” Bill Simon, former president and CEO of Walmart U.S., said. “Don’t underestimate how important the grocery business is for Walmart” (www.CNBC.com)
Walmart also launched its own home furnishings brand called “MoDRN”. Walmart is also having in-house apparel brands. It’s also recently working together with celebrities like Sofia Vergara and Ellen DeGeneres for clothing lines exclusive. Walmart is now leaving no stone un-turn to compete with Amazon. Having upper hand by owning retail store, now focusing is on ecommerce. Walmart aims to increase ecommerce by acquisitions of many ecommerce brands like Modcloth, Bonobos, Art.com and Bare Necessities and also aiming to increase its in-house brands.
Most recant accomplishment of Walmart is acquisition of Flipkart, Indian ecommerce giant, large logistics network and competitor of Amazon in India. Walmart primary focus in this acquisition is to make grocery marketplace using Flipkart.
Amazon, in its own quest for growth, has similarly been investing in its in-house along with attracting more third-party sellers. Business analyst thinks Walmart still lacks behind in this fight even though having monopoly in physical stores.
Below is the revenue chart of Amazon and Walmart. (Nadir Yurtoğlu – History Studies International Journal of History – 2018)
Strengths and Weaknesses
Amazon strength is its ecommerce business which targets global market. It provides platform to all the third party sellers, in-house products and provide addition services like AWS(Amazon web services), Cloud services along with many others at very reasonable rate cutting down state taxes. Customer are attracted as they get many options and customer reviews. But its weakness it physical stores. To overcoming this, Amazon is acquiring many companies like Whole Foods etc. But as they are competing globally, they need to make better strategies to acquire more in-stores worldwide and warehouses for better delivery.
Contrary to this, Walmart has pioneer in in-store and has thousands of stores world-wide. Providing non-internet user platform to buy products. They have wide range of product line similar to Amazon and has in-house products. But lacks in ecommerce, in recent years they found Amazon as their biggest competition, hence started working on excelling on this side. They are acquiring many giants worldwide in ecommerce to increase their markets, Walmart recently made biggest acquisition of Filpkart.com.
But both companies are struggling to find foot in china, because of local e-commerce giant Alibaba.
4 P’s and Target Market
Amazon has long list of product line starting from grocery to all home goods, apparel brands to pharmacy, cosmetics, electronics, Alexa. Provide services such as AWS (Amazon Web Services), Cloud Services, Amazon prime, Digital content distribution services, Amazon videos, Publishing, Prime pantry, Restaurant delivery etc. They have third part sellers as well as in-house production called Amazon basics.
Walmart product is its retail services and provides all ranges of retail good from grocery to home goods, apparel brands, pharmacy, cosmetics, electronics. They are trying to open restaurant by collaborating with fast food like Mac Donald’s etc. to open stores inside walmart.
Amazon and Walmart both targets globally people all generations as they sell almost everything. Walmart was initially targeting non-internet user in earlier days, now to keep up with the market they are increasing ecommerce and speed up to extend their target audience to internet users.
While Amazon being originally and ecommerce website targeted internet user of all ages globally, now to keep up with the competition Amazon biggest challenge is in-store retail.
When talking about price both provide wide range of product line in low price to attract customers. Amazon uses market-oriented pricing as its main pricing policy. They evaluate competitors’ price as basis of their prices. While Walmart uses Everyday Low Price (EDLP) pricing strategy. This attracts large customer population in stores.
Amazon aims customer to visit their websites and pay for online services. They promote through Advertising, Sales promotion but giving discounts on holidays or special days. Public relations by donations such as Amazon Smile. Also by direct marketing, they communicate and collaborate with business to use it services, such as digital content distribution, publishing, cloud storages, AWS etc.
While on the other hand Walmart promotion is through Advertisement mainly on newspaper, website and social media. Secondary method is sales promotions, discounts offers on special occasions and holidays. Personal selling is through in-stores where rep peruse to try new products and package deals. Public relationship also plays key roles in promotion, Walmart releases press to inform about charity programs.
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