Amazon.com – the WalMart of the web ?

An article in the Economist (Oct 1, 2011) reports that Amazon.com’s are 11 % lower than other retailers with physical stores for 100 products selected randomly.  The prices at Amazon were even lower compared to store websites. Amazon.com’s low profit margin, scale, the Kindle as a storefront, Amazon prime shipping for $ 79 a year – all make its web strategy akin to the Walmart in the physical world.  But, unlike Walmart, Amazon competes with Apple for the tablet, Barnes and Noble for the ereader, IBM and Apple for Cloud services, WalMart for physical goods and Best Buy for electronics.  Do you think that Amazon.com’s supply chain execution capability sufficient to enable it to compete on all fronts ?  Given the razor thin margins and increased warehousing costs as delivery lead times are kept low and inventory is distributed, how do you expect Amazon to compete locally if sales tax requirements are imposed on the company ? Is Amazon’s key to competitiveness its customer service and ability to absorb competitors (like Diapers.com) ? How should the company leverage its capability globally ?

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About aviyer2010

Professor
This entry was posted in Ecommerce, Global Contexts, Operations Management, Service Operations, Supply Chain Issues and tagged , , , , , , . Bookmark the permalink.

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