Page 3 - Case Study_Grocery Wars

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118 Part One Organizations, Management, and the Networked Enterprise

There are other forces at work affecting opening U.S. locations and smaller-format stores are
Amazon-Whole Foods, Walmart, and the grocery likely to be part of the mix.
industry’s competitive landscape. Money spent on
dining out has surpassed grocery sales. Instead
of shopping weekly at the supermarket for gro- Sources: Kate Taylor, “Here Are the Changes Amazon Is Making
to Whole Foods,” Business Insider, March 2, 2018; Adam Levy,
ceries to prepare meals at home, consumers are “Walmart’s Grocery Efforts Probably Aren’t Enough to Overcome
increasingly snacking and using prepared foods. Amazon,” The Motley Fool, March 17, 2018; Matthew Boyle,
Companies in the $1.5 billion meal kit industry “Walmart to Expand Grocery Delivery as Amazon Battle Rages,”
Bloomberg, March 14, 2018; John Cook, “Walmart Counterpunches
(such as Blue Apron) have moved into the market, Amazon with Plan to Expand Grocery Delivery Service to 100
though grocery chains are creating their own pre- U.S. Markets,” GeekWire, March 14, 2018; Toby Clarence-Smith,
packaged food kits as well. “Amazon vs. Walmart: Bezos Goes for the Jugular with Whole
Foods Acquisition,” www.Toptal.com, accessed March 21, 2018;
Grocers are also adapting to surging consumer de- Tom McGee,” Perspective for the Grocery Wars: Shoppers Crave
mand for fresher items, personalized options, and use Experience,” Forbes, September 13, 2017; Derek Thompson, “Why
of technology to improve the food-buying experience. Amazon Bought Whole Foods,” The Atlantic, June 16, 2017; and
Deloitte researchers found an overwhelming majority Nick Wingfield and Michael J. de la Merced, “Amazon to Buy
Whole Foods for $13.4 Billion,” New York Times, June 16, 2017.
of shoppers are deploying digital devices to research
the groceries they intend to buy. Deloitte also found CASE STUDY QUESTIONS
that shoppers spend more when using digital tools. 3-13 Analyze Amazon.com and Walmart using the
Despite the growth of online food shopping and value chain and competitive forces models.
these other shifts in the competitive landscape, ex- 3-14 Compare the role of grocery sales in Amazon
perts believe the market for supermarkets is strong. and Walmart’s business strategies.
According to brokerage and advisory firm Marcus & 3-15 What role does information technology play in
Millichap, there will be a wave of grocery store open- these strategies?
ings consuming 25 million square feet of commercial 3-16 Which company is more likely to dominate
space over the next five years. Domestic chains and grocery retailing? Explain your answer.
German discount supermarkets Aldi and Lidl are

MyLab MIS
Go to the Assignments section of MyLab MIS to complete these writing exercises.
3-17 Describe the impact of the Internet on each of the five competitive forces.

3-18 What are the main factors that mediate the relationship between information technology and organiza-
tions and that managers need to take into account when developing new information systems? Give a
business example of how each factor would influence the development of new information systems.

Chapter 3 References

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Andriole, Stephen J. “Five Myths About Digital Transformation,” York: HarperCollins (2003).
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Ceccagnoli, Marco, Chris Forman, Peng Huang, and D. J. Wu. Cohen, Daniel, and Joshua S. Gans. “Warding Off the Threat of
“Cocreation of Value in a Platform Ecosystem: The Case of Digital Disruption.” MIT Sloan Management Review 58, No. 2
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