CASE TEMPLATE

Course : Information Systems Concept

Case Study : Walmart vs Amazon
Group Number :3
NO Student ID Student Name
1 2540127010 Devin Jonathan Sulaiman
2 2540126632 Felicia
3 2540121101 Joseph Gunawan
4 2540126380 Matthew Budiharjo
5 2540126191 Sulfi Danivia

This template will help you to describe the real case situation, understand the real problem and
document the problem analysis in properly order, and make a recommendation based on the case.

Case Situation Analysis

Understand about the big picture of the case. Describe the real situation and fact stated on the
case. This case situation can be the company profile, company background, company business,
and other case main points you need for further analysis.

(HINT: reading the first and the last section of the case often provide more information you need
to describe the case situation)

Case Situation Analysis (Min 50 words):

Amazon is the largest and the leader of e-commerce companies, which was founded in 1994. Because
of Amazon, the growth of e-commerce is developing rapidly. There is also Walmart as the largest
traditional brick-and-mortar retailer in the world and was founded in 1962. Both either Amazon and
Walmart are focusing C2C markets. In this case, the journey of Amazon and Walmart will be seen.
They are competing each other with their strategies to develop their own company.
 Problem Analysis: Problem Definition and Problem Statement
Define the problems of the case. You can use an appropriate tool on how to describe the problem
in case. You may find more than one problem in a case. You may find more than one problem in
a case.

Problem Definition (Min 50 words):

There are some issues that we can identify in the study case.

The first thing is having pricing issues. When Walmart launched their own website, they charged
different prices for the online platform and the offline store, which confused customers.

Aside from that, both Amazon and Walmart have their own methods of selling their products. Amazon
allows anyone to sell their own products on their platform, whereas Walmart only allows certain
parties to sell on theirs.

Last but not least, Walmart is expanding their business model in an attempt to outperform Amazon.
Walmart evolved by launching smartphone apps, launching an e-commerce site, and competing with
Amazon. On the other hand, Amazon is also attempting to dominate physical purchases so Amazon has
opened a lot of convenience stores.

After problem is defined using your chosen tool. You can state the problem in one or few more
sentences to be a problem statement or points of real problem faced based on the case.

Problem Statement:
As we all know, both offline and online stores have advantages and disadvantages. To deliver products,
online stores require packing, whereas offline stores require customers to visit the store to purchase
products. As a result, pricing algorithms for both online and offline stores must be properly configured
to avoid any losses to Amazon, and Walmart— especially as a "newcomer" in online transactions,
Walmart must arrange its pricing algorithm for both online and offline stores.

Amazon and Walmart no doubt have a wide range of products ranging from daily needs to hobby
items. Amazon, which allows anybody to sell products, will obviously offer a broader selection of
products to their customers. Meanwhile, Walmart attempted to replicate what Amazon had done
previously, but the results were not good at all so, Walmart strictly permitted their partners and
acquired companies to sell the products in Walmart. Despite the fact that they are now attempting to do
things similar to what Amazon has been doing by allowing third-party sellers to sell products.

Amazon and Walmart both want to dominate the market for selling and buying goods market.
Amazon is gradually expanding its offline stores, while Walmart is trying to expand its online
e-Commerce transactions.
 Diagnosis: Cause and Proof of Diagnosis
After you know about the main problem in the case, next you need to summarize the diagnosis. Diagnosis is the cause of the problem.
Don’t forget to note the evidence that proof the cause of the problem you defined before. Next, simply identify the impact of the
problem if these problems still occur.

Problem Cause Evidence Impact

Before, Walmart didn’t
As stated in the text, Walmart once
develop its e-commerce well
tried to follow Amazon’s price
because the executives
algorithm, but it caused the online
underestimated the power of Walmart’s business model has always set a
prices to be much cheaper than the
online shopping. Then, they consistent “everyday low price” in its
offline store prices. This thing can
started to realize how powerful stores. This strategy caused problems on the
switch customers away from offline
online transactions are and retailer’s website when Walmart followed
stores and influence them to do the
decided to rebuild Amazon’s business model and used pricing
transactions online. Besides that, when
Walmart.com and redesign it to algorithms.
Pricing for Walmart sets higher prices for
make it easier to use for
offline and customers who make online purchases
customers. Walmart then began charging higher prices
online stores rather than in-store purchases,
online than in its stores in an effort to
customers are confused as a result of
But the bigger the business is, reduce shipping costs and drive shoppers to
this pricing algorithm. When
the more internal struggles its stores. Some products on Walmart.com
customers see the difference in prices
happen, especially in finance, listed an online price and in-store price so
between the online and offline stores,
because they have to set low customers would see the difference.
they are dissatisfied with Walmart's
prices every day to compete
terms and request consistency in
with other platforms that
giving them the fixed price.
provide the same thing.
Products Both Amazon and Walmart Another internal struggle at Walmart Walmart took their step closer to build
Selection must try to expand their own involved Amazon’s e-commerce their own online mall and providing
businesses by developing their marketplace strategy, which allows more than products by making a
external, third-party vendors to sell their business relation with other companies
own e-commerce. However,
products on Amazon’s website. in the related industries. A lot of
the outcome was disappointing Significantly, this strategy generates half of companies was acquired by Walmart
due to the limited product Amazon’s sales. to make Walmart online mall came
 One strategy that Walmart employed to
selection on Walmart. increase the number of products it offered
true. Good company acquisition and
Amazon’s market place system online was through acquisitions with other cooperation will become the
makes it easy for users to sell companies. advantages for both parties, either
products. Because of this, Walmart and acquired companies.
This relationship was part of a larger plan to
Walmart needs to increase the turn Walmart.com into an online mall.
product selection in online Walmart plans to house a number of Walmart e-Commerce will have a
shopping by acquiring and retailers on its website, including previous much wider range of products than
before. The acquired companies will
cooperating with other acquisitions. Although Walmart offers more also obtain a potential site to sell their
companies. than 40 million products in its marketplace
products to the general public.
on Walmart.com, Amazon offers 400
million.
The strength People always shop, either to Today, consumers have many options for Amazon's algorithm detects well the
of customers buy all kinds of stuff for their shopping. They can shop at brick-and- customer's behaviors and tendencies to
and daily needs or for pleasure. mortar retail stores, they can shop online purchase specific products from its
technologies Now, there are a lot of ways to and receive home deliveries, or they can customers.
utilizing go shopping, either using apps shop online and then pick up their
While, Walmart with their experiences in
or physically going to the purchases at a store, to avoid checkout the selling and buying industry along with
stores. lines. extensive retail networks and connections
throughout the country.
Amazon and Walmart are the Amazon is ahead of Walmart. Amazon has
market leaders in the selling a distinct competitive advantage with its Having these both online and offline
and buying markets. Both of algorithmic approach to presenting purchases is one of the best services,
them compete with one another particular products to its customers, as well and it really helps many people shop
by implementing their as using real-time data to apply dynamic easily. As customers, we can choose
respective company strategies. pricing to its products. the best option based on the products
In this case, Amazon, as one of that we want to buy.
the early pioneers of online Walmart, in contrast, has lagged behind
shopping, has a strong significantly in these areas. Walmart has
background and strategies in perhaps the best physical distribution and
this field. Walmart also has e- retail network in the world, while Amazon
commerce but has already left is the clear leader in e-commerce. The
 absence of an online platform that can
collect the volume and quality of consumer
behind Amazon.
data needed for more precise decision
making in product placement and pricing
Even though Walmart is not a
has held Walmart back.
newcomer to the selling and
buying market, Walmart has The store uses a combination of sensors,
never really focused on online cameras, and artificial intelligence to
shopping and is still struggling automatically detect the food
to improve their e-commerce items that shoppers remove from shelves, so
to compete with Amazon and they can leave the store without visiting a
on the other hand, Amazon cashier. Amazon is expanding Amazon Go
also facing the same problems nationally. By July 2019 Amazon had opened
with in-store purchases. 11 Amazon Go stores.
 Decision Options/Alternative
List the decision option or alternatives you want to suggest as a recommendation based on the
criteria.

Decision Option Description

a) Sellers should adjust their product's a) If there is a pricing gap between offline and online
selling price to the standard selling stores, a benchmark price that can be used as a
price (market) established by previous reference for the price of items for consumers must be
dealers. applied in order to reduce the price difference. This is
the ethical method to ensure that a healthy competition
system is preserved.

b) Amazon and Walmart have different b) The marketplace's main stars are the sellers and
terms in their sellers. But in the end, buyers. Sellers will be nothing if there are no buyers,
both Amazon and Walmart must and vice versa. Customers will be happy with their
regulate their sellers respectively. orders and may order again in the future if the seller is
trustworthy.

c) Either Amazon or Walmart focus c) Amazon and Walmart have room to improve and
their own fields. Amazon will be expand each other's businesses, but they still need to
focusing in online like subscriptions focus on their main business focus.
and Walmart in the offline stores.
Amazon can reach and increase the number of
consumers with online stores so that consumers get the
convenience where they can access the Amazon
market more easily wherever and whenever they want.

Meanwhile, Walmart will concentrate on offline

transactions, — especially for groceries, furnitures,
and other products that most people prefer to purchase
in-store.
 Recommendation
Provide the best recommendation to solve the problem, write down the recommendation and the
reason why you choose that recommendation from several alternatives.

Selected Option Reason

Because, we think that if they focus on their
own sector, they will earn more income. Why?
It's because they already master it. We think
they just have to develop their company. It
doesn’t matter if they want to expand their
Rather than competing with each other, Walmart company in another sector, but we think it
and Amazon should concentrate on their businesses should be prepared well. Expanding business
now. In the end, Walmart will have the world's best to another sector isn’t easy, they need a lot of
physical distribution and retail network, while time and money to expand it. They also need to
Amazon will be the leader in e-commerce. analyze their new “environment” well so they
can get a lot of customers to gain more income.
That’s why it’s better to improve what they
have with their own market without trying to
competing each other, except they’re in the
same sector from the very beginning.

Conclusion (Min 50 words):

These days, market trends are often changing, and good adaptability is required to survive.
More and more businesses are popping up, more severe the competition is. To be successful
and long-lasting, company must pay attention to their customers' interests and convenience. It
must also establish a price range for the benefit of the customer and to avoid confusion.
Walmart and Amazon must keep improving their performance, innovations, software such as
their own websites and apps, use of cloud computing, and communication with third parties
and companies in order to survive and give the best services to customers while also avoiding
falling behind others.
 1. Discuss and analyze the reasons why Walmart is moving so decisively into electronic
commerce.
2. Discuss and analyze the reasons why Amazon is moving so decisively into traditional
brick-and-mortar commerce.
3. Do you think one company will “win”? If so, which one? Support your answer.
4. Speculate on the reasons why Amazon’s market capitalization was so much larger than
Walmart’s in July 2019.

Answers:
1. Because more people now prefer online shopping to in-person shopping. As a result, Walmart's
sales in 2000 totaled only $25 million, with $100 million in clothing and other inventory
remaining after the holiday season. As a result, in order to survive and thrive in this business,
Walmart is attempting to enter the e-commerce industry in order to attract more customers and
investors.
2. Amazon is making a crucial move into traditional brick-and-mortar transactions in order to
expand their market lead, attract customers who choose in-person purchasing, and increase the
transactions that most of people prefer to do it offline like buy fresh groceries, etc.
3. We think it depends on the sector. We can’t say either Amazon or Walmart will win the
competition because they each have their own field and master different fields. If you are talking
about e-commerce, we will say Amazon will win because Amazon is the leader in e-commerce.
But, if it’s brick-and-mortar commerce, then we will say Walmart will win because Walmart has
the best physical distribution and retail network. But Amazon will be a winner if Walmart doesn’t
change anything in their businesses model. Because from the overall revenues and their
improving performances, we can see the growth of Amazon.
4. Because nowadays, most people prefer e-commerce, People will prefer Amazon, which started
early and is the market leader in e-commerce, over Walmart, which is just started working to
develop their marketplaces. A report from the Consumer Intelligence Research Partners report
(www.cirpllc.com) and the reading Group Case: Walmart vs. Amazon state Amazon accounts for
48% of all online sales, and 50% of US households have Amazon Prime. As a result, investors
will prefer to cooperate and capitalize with Amazon over Walmart, ensuring continuity and
investment in Amazon.