Amazon

Strengths.

Amazon is a profitable organization. In 2005 profits for the three months to

June dipped 32% to $52m (£29.9m) from $76m in the same period in 2004.
Sales jumped 26% to $1.75bn. Until recent years Amazon was experiencing
large losses, due to its huge initial set up costs. The recent dip is due to
promotions that have offered reduced delivery costs to consumers.
Customer Relationship Management (CRM) and Information Technology (IT)
support Amazon's business strategy. The company carefully records data on
customer buyer behaviour. This enables them to offer to an individual specific
items, or bundles of items, based upon preferences demonstrated through
purchases or items visited.

Amazon is a huge global brand. It is recognisable for two main reasons. It was
one of the original dotcoms, and over the last decade it has developed a
customer base of around 30 million people. It was an early exploiter of online
technologies for e-commerce, which made it one of the first online retailers. It
has built on nits early successes with books, and now has product categories that
include electronics, toys and games, DIY and more.

Weaknesses

As Amazon adds new categories to its business, it risks damaging its brand.
Amazon is the number one retailer for books. Toy-R-Us is the number one
retailers for toys and games. Imagine if Toys-R-Us began to sell books. This
would confuse its consumers and endanger its brands. In the same way, many of
the new categories, for example automotive, may prove to be too confusing for
customers.

The company may at some point need to reconsider its strategy of offering free
shipping to customers. It is a fair strategy since one could visit a more local
retailer, and pay no costs. However, it is rumoured that shipping costs could be
up to $500m, and such a high figure would undoubtedly erode profits.
 walmart

The Strengths of Walmart

• Globally Recognized

• Global Organizational Size

• Cost Efficiency •

Efficiency in Supply Chain

First, it is globally a recognized brand. People from all over the world know the
brand, therefore, it does not take much time to make trust over the brand
Walmart Second, as the size is big, it brings many benefits for the business
which work as an internal strength for Walmart It can hire people from any
country it wants. So. for hiring skill people and people from other culture. it can
easily do it Second. it can set-up a new retail shop in a new place easily.Third.
as it produces a large scale. it can achieve economies of scale, As a result it can
produce goods at a price much lower than its competitors. And finally,
efficiency in the supply chain takes place when you can have all of the
information about your business efficiently. By that, you can conduct your
business efficiently. Wal-Mart has developed a strong network among its global
retail shops. It can efficiently control and monitor its goods.

The Weaknesses of Walmart

• Thin Profit Margin

• Easily Copied Strategic Business model

The products of Wal-Mart are known as low priced products. And for this low
price, it has been dominating the industry. If the price goes up, people will start
leaving the products of Wal-Mart. That's why the company cannot offer a
bigger price and make more profit. Also, the business model of Wal-Mart is
easily understandable. The model can be copied by anyone, even by the new
companies who want to enter the market. As a result, it can make more
competitors in the market which may lessen the profit margin.

Omni channel how to illustrate this case

Walmart's strategy includes the acquisition of Jet.com (in 2016), as well

as a number of specialized e-retailers (Shoes.com, Moosejaw, Bare
 Necessities) and digital local vertical brands that have developed their
products. And sold them directly to consumers such as ModCloth,
Bonobos, and Eloquii
In addition to creating an online marketplace, Walmart wanted to use its
current assets in the fight against Amazon, which is a large network of
retail stores and a growing food business.

Private label:

Walmart’s private labels now contain a wide variety of products designed to

increase loyalty and profits. The strategy responds to consumer demand, only
exceeding the re-love price of private labels.

Once private brands were seen as ‘cheap’ alternatives, many consumers now
prefer them. A recent study found that 81% of consumers buy private label
products every time they shop.

Another found that store brands are buying 25% more than they were five years
ago. That’s not all. Seven out of ten shoppers say private labels offer good value
for money and 62% say they are smarter when buying a private label.

With these results, it is easy to see why Walmart places so much emphasis on its
private label products. First, the retail company broke its “everyday low price”
image. When this was successful, the company began to invest in high levels
such as wine and fashion. And the movement for success continues. Amazon
private labelling is a very simple concept. You buy your products from the
manufacturer, but label and sell them under your own brand.

The best example of a successful private label is Amazon Basics. Amazon does
not produce products, but only gets them from other manufacturers.

The e-commerce company sells them under the Amazon Basics brand.

In 2018, the private label business grew 4.4% to $ 5.5 billion in profit (source -
plma.com).

According to the Association of Private Label Manufacturers, about one in

every 4 products sold in the United States is a private label or store brand
product. With such stunning growth, private brands allow Amazon (FBA)
vendors to create an incredible opportunity to build the trusted brand that
Amazon has accomplished.
 You do not have to worry about production, and Amazon will take care of
logistics and customer service. You need to find a great overall product and
reliable supplier!