What are Wal-Mart’s resources, capabilities and competitive advantages which will help it compete with Amazon?
Wal-Mart has plenty of resources to compete with Amazon. The firm owns 4,574 stores
in the U.S. and 6,299 stores abroad, this provides a competitive advantage due to the large
network of customers Wal-Mart can reach. Each week, Wal-Mart serves approximately 260
million customers through its stores and 11 e-commerce websites. Walmart.com even attracts
an average of 85 million unique visitors each month. In 2015, Wal-Mart reached $482 billion in
revenue, a figure nearly five times more than Amazon’s sales. With $14.7 billion in net income,
Wal-Mart totaled 2,350% more profits than Amazon as well. Wal-Mart overall is a more
profitable business but is still behind Amazon when it comes to market valuation.
Wal-Mart is capable and already is competing with Amazon, but in regards to ecommerce sales Amazon is vastly ahead. It seems that Wal-Mart understands that Amazon is
winning and is trying to catch up and compete in e-commerce. By providing customers a
“ShippingPass” program, the company is promising customers 2-day shipping, a feature that
Amazon already had in place. It was a good idea on Wal-Mart’s part to provide 2-day shipping
all year for $49.99 but this doesn’t necessarily give the company a competitive advantage. The
reason is because of customer brand loyalty to Amazon. If a customer already has an Amazon
Prime account, chances are that they will not spend an additional 50 dollars to get a
“ShippingPass.” On another note, acquiring companies like Jet.com and others is a great way for
Wal-Mart to gain ground on Amazon for the future.
Overall, Wal-Mart is doing the right things to help compete with Amazon. Wal-Mart hits
a wide variety of customers when it comes to sales at their store locations but currently lacks in
comparison to Amazon when it comes to e-commerce. If they continue shift their focus and
spend more capital on e-commerce, then they will be in good shape for sustainably competing
with Amazon in the long run.
