Amazon and Walmart Pricing Strategies and Online Dominance Comparison Paper

Amazon and Walmart Pricing Strategies and Online Dominance Comparison Paper

Q1 “Less than a decade ago, no one considered that Amazon might someday give Walmart something to worry about. But today, Amazon is a $107 billion a year company. Walmart, though, brings in about 4.5 times more sales, at $482 billion. However, Amazon has grown 20 percent annually over the past four years, while Walmart’s growth over the same time period has been essentially flat. Already, Amazon is cutting in to Walmart’s sales. And, if this pace keeps up, Amazon could be the one to ultimately dethrone the king of retail. At the center of the battle is price. While low price may ultimately declare a winner in this game of cat and mouse, both parties also need to take extreme caution when it comes to overdoing it. Reckless price-cutting will likely do more damage than good to both companies. In the process, both companies are trying to find other ways of outdoing each other, like personalized service and delivery options. Amazon seems to have the upper hand in this area, but Walmart is making strides by investing heavily in its fulfillment network and combining the best of its online and off-line operations. The winner will have to do more than offer the lowest price. Selection, convenience, and buying experience will be vital to winning online.”

Please answer the following questions:

1.For Amazon and Walmart, is it more important to have lower prices or to have the perception of lower prices?

2.What pricing strategies do the two companies use? Do they use the same ones? Why or why not?

3.In the battle for online dominance, just how important is low price?

4.How important are other benefits that Amazon and Walmart each deliver? List and discuss these benefits.

Q2 Please read synopsis and answer the 4 questions below completely and thoroughly. Each question is worth 25 points possible. You must upload your answers in a Word document that will be run through Turnitin (answers copied from another source will result in a zero).

“The Uber story shows how a company employing a unique online distribution strategy has disrupted an entire industry and become the dominant market leader. Uber took on an industry of well-entrenched competitors (such as taxis and buses) by breaking ranks from the standard industry distribution model of renting cars, calling taxis, or riding buses. It recognized a gap in the market and targeted customers with unmet needs through a series of totally new distribution approaches.

In just seven years, Uber has revolutionized the urban transportation industry. Once the domain solely of taxicabs, car services, and public transportation, such as trains and buses, Uber allows passengers to call for a ride, choose the driver and type of car, know the fare in advance, and track the vehicle as it approaches. Uber now books more than $10 billion in rides, and operates in hundreds of cities in 67 countries. In addition to traditional competitors, Uber’s success has attracted numerous other ride-hailing services, but Uber is taking full advantage of its first-to-market leadership position. Traditional transportation services are known for the close relationship between cab companies and local governments, high fares, poor service, and little accountability. Uber’s model is changing the transportation industry. Uber’s CEO sees other applications in the company’s future, which may provide the opportunity for growth beyond Uber’s ride-hailing origins.” (Pearson, online)

1.How did Uber become the leader in the urban transportation business?

2.What has been the secret of its distribution strategy? How has Uber managed to provide value to its clients and stay ahead of the competition?

3.How does Uber adding delivery services fit into its distribution strategy?

4.Do you believe that Uber will be successful in the long term? Why or why not?