Page 6 - [STUDY CASE_GROCERY WARS] Report

QUESTION 1

Analyze Amazon.com and Walmart using the value chain and

competitive forces models.

Competitive forces model

In the retail domain, both Amazon and Walmart are fierce competitors

and compete against each other online and offline.

From an online perspective, Amazon has established its presence for a
very long time as a dominant player by offering various products like
groceries, electronics, apparel, etc., for all age groups from kids to
older people at very competitive pricing. Amazon has a matured and

highly organized supply chain system that maximizes the customer's
shopping experience. For the competitive force model, Amazon’s
suppliers have low bargaining power because Amazon is a giant in e-
commerce space and for sellers to get a space they must give Amazon

a cut. The bargaining power of the buyer is also low because the price
is also pre-set and cannot be bargained with. Amazon does have much
threat from substitute products because it acts as a middle man and is
the biggest e-commerce in North America. Been the biggest e-

commerce it has a minimal threat from new entrants. However, the
rivalry is high among the existing player like Alibaba its cheap
counterpart from China. It also has physical retailers like Walmart,
Best Buy as a competitor because of grocery and electronics. As

Amazon acquires new markets its competitors are going to grow.

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