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Amazon and Walmart on Collision Course Case Solution

Solution Id Length Case Author Case Publisher
2324 867 Words (4 Pages) Nirmalya Kumar, Sheetal Mittal Singapore Management University : SMU445
This solution includes: A Word File A Word File

The challenge identified in the case for both the companies was that they were stepping into the horizons of the other. Walmart is the largest retailer in the world with its focus being on brick-and-mortar retail. It has opened these physical locations in different parts of the world providing easy access to customers with grocery being its best-selling category. Amazon is the largest e-commerce retailer in the world and is seeing significant growth as more people are switching online. Amazon has captured the majority of the e-commerce sector in the US and is seeing more growth than Walmart. 

Following questions are answered in this case study solution

  1. The Challenge

  2. Review of Alternatives

  3. Solution for Amazon and Walmart

  4. Action Plan

Case Analysis for Amazon and Walmart on Collision Course Case Solution

The problem for both these retail giants is that they are moving towards omnichannel. This means that Walmart is investing more into its online segment to compete with Amazon there. Walmart’s website has been running since 2000 and they are seeing an increasing number of people using their e-commerce channel as it has introduced a number of online services to increase their market share. Similarly, Amazon is stepping into brick-and-mortar retail to complement its online presence because they believe that Amazon cannot grow beyond a certain point without having a physical presence. The challenge is that as each of these retailers moves towards omnichannel the competition is increasing which is creating problems. They have to cut down on the cost and have to step into an area in which they do not have much experience. There might be one clear winner at the end of this battle, and it is affecting both retailers. The challenge for both would be to come up with a strategy where they can switch to an omnichannel while maintaining their profitability and market share growth and continue to expand. 

2. Review of Alternatives

Now, both the retailers must devise a strategy to keep growing. Both of them has abundant resources and are able to make this a prolonged fight which will bleed them out as well as the retail industry at large. One option for them would be to continue with their existing strategy rather than focusing too much on omnichannel. The loser in this case, however, would be Walmart because the online sphere is growing significantly especially during the covid19 times, and it may not be able to keep up with Amazon. The other alternative would be to coexist and identify themselves differently. A number of retailers have operated in the US for a long period of time profitably, however, since both of them are market leaders in a way, they would want to continue being that way. Currently, Amazon seems to be winning the race, but Walmart can only grow and with their EDLP model and physical locations, Amazon would not be able to compete with them as things stand in groceries. Walmart needs to build its apparel sector especially online and work on its private labels. Amazon can achieve a lot with its acquisition of whole foods and groceries which was a major hurdle in e-commerce with logistical issues.

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