Strategies for Success Wal Mart and Amazon

¶ … AMAZON'S AND WAL-MART'S DISTRIBUTION CHANNELS

Understanding Amazon's and Wal-Mart's Distribution Channels

It is common knowledge that a change in the business strategy has a serious implication on the performance and success of a company in any industry. For example, Amazon Company is popular for the sophisticated e-commerce and most of its customers shop their products from the company online. However, if the company creates many stores in the different parts of the world to improve the speed of service delivery, its sales volumes will have negligible changes. Wal-Mart is the largest retailer, and it has many stores in different countries (Nardini & Abbott 2001. If Wal-Mart resolves to invest in e-commerce, the company will experience changes in sales volumes.

The resolution by both the Amazon and Wal-Mart to improve on the distribution channels has different implications on the business practices. Notably, the Wal-Mart has already established the stores in different countries around the globe. In essence, the creation of many branches has been one of the expansionary and the cost reduction strategy. The introduction of e-commerce as the culture will help improve the marketing strategies for the company (Amit & Zott 2012). Comparatively, it will be cheaper and faster for Wal-Mart to implement its decision of online market compared to the Amazon. For example, Wal-Mart is already marketing its goods online because it has a website. Ideally, the resolutions of the Wal-Mart Inc. to invest in e-commerce will bring positive results faster compared to that of Amazon. It is relatively expensive to build structures in different parts of the countries. Additionally, it will be a long process for Amazon to recruit employees to work in the new stores. However, although the idea of establishing stores in different location helps the company to reduce the cost of distribution, it will take long before the new strategy thrives.

Amazon will face challenges on the decision to deliver its products in both the rural and urban areas like the Wal-Mart Inc. Comparatively; it is easier for Wal-Mart to invest in the online market than for the Amazon to invest in the creation of new stores. The majority of Amazon's customers are used to the online marketing. Traditionally, the creation of new stores in the different parts of the globe requires that the company carry out the pre-feasibility study to confirm that the areas are suitable for the venture (Nardini & Abbott 2001). Traditionally, most countries may not be suitable for the establishment of the company because of the security and the number of customers in the region. Most of the customers are from various geographical regions around the globe. The company may have to carry out market research to establish the locations with the most number of customers. Most of the products in the Amazon are books that are needed for a short period. For this reason, the resolution by the company to build stores in the different parts of the globe may not invoke a significant benefit.