IMAT5211: Walmart's E-commerce Strategy and Recommendations

This report examines Walmart's e-commerce strategies, focusing on its challenges and potential improvements. It begins by identifying the research question, which centers on enhancing Walmart's e-commerce activities by analyzing current strategies and addressing existing problems. The methodology involves interviews with executives and online sales experts, along with data from primary and secondary sources, including customer surveys. The report highlights problems such as the company's struggle to balance online and offline channels, and its lag behind Amazon. It analyzes Walmart's current e-commerce strategy, including its acquisitions, and suggests the adoption of a dynamic e-business model to improve customer experience and sales. The report includes financial data comparing Walmart and Amazon's revenues, and emphasizes the need for a cohesive e-commerce strategy. The study provides recommendations for Walmart to improve its online retail performance and better compete with key rivals. The report is a response to the assignment brief for the IMAT5211 module.

Running head: WALMART AND E-COMMERCE
WALMART AND E-COMMERCE
Name of Student
Name of the University
Author Note

WALMART AND E-COMMERCE 1
Table of Contents
Research question............................................................................................................................2
Methodology....................................................................................................................................3
Sample population...........................................................................................................................4
Report to management.....................................................................................................................4
The present problems faced by the company related to e-commerce..........................................4
The present e-commerce strategy used by Walmart....................................................................5
A new dynamic strategy can be adopted or some changes can be made to the existing strategy. . .7
References......................................................................................................................................10

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Research question
E-commerce strategies that can help in improving the e-commerce activities of the company
after analysis of the present e-commerce strategies and finding out the problems faced by the
present e-commerce strategy of the company.
a.) What are the problems faced by the current e-commerce strategy?
b.) What can be done to improve the present strategies of e-commerce?
c.) What techniques will be used to analyze and evaluate the current e-commerce?
Improvements are needed in the e-commerce strategies due to various reasons (Laudon and
Traver 2016). The new strategies will help in improving the online sales of the company besides
its offline sales. The company has been investing millions of funds for improving its online sales
but still it is facing major decline in the online sales as has been shown by the end of October
2018 which was its fourth fiscal quarter. This slow growth rate in the sales was seen in the
holiday season which has put it in a major disadvantageous position as compared to Amazon
which is one of the major online competitors of the company. Its sales as compared to the
previous three quarters have declined by 50%.
This research question will help in finding out the gaps in the present e-commerce
strategy of the organization and therefore help in improving the strategy such that the company
can increase its e-commerce sales (Hua 2016). The company chosen for the purpose of this study
is Walmart and the states of e-commerce used by the company in order to improve its market
share and sales (Cui et al. 2017). Walmart is a multinational company that is engaged in retail
operations through various supermarkets, stores and others. Presently Walmart is facing many

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problems related to the lag in its sale through e-commerce die to various operational issues that
are being faced related to the online sales (Akter and Wamba 2016). The company is not being
able to manage its operations properly related to the sale of different products through its online
channel (Walmart.com. 2019).
Methodology
In order to carry out the research of the company related to this research question, it is
important to carry out interviews with the senior executives and various online sales channel
experts who can discuss about the problems being faced by the online channel of sales
(Pogorelova et al. 2016). Therefore the data collected for the purpose of this research is the
primary data and secondary data. Primary data will help in getting accurate information about the
operations of the company and the challenges being faced by the company (Rahayu and Day
2015). The secondary data can be got from various book of the company where information
about the sales if the company and other issues are given. By analyzing the secondary sources of
data we can find out the trend of sales in the company and information related to the strategies
adopted previously by the company. Survey can be conducted for the major customers of the
company such that they can give information related to where do they find any problems related
to the online sales of the company and suggestions can be got from them such as what all
techniques is applied by Amazon that makes it a better choice over walmart sometimes.
Confidentiality of all the information will be maintained such that the information gathered from
the customers will be given to the company anonymously (Sharma and Lijuan 2015). This will
help in maintaining the company’s relationship with the company.

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Sample population
The sample population for the purpose of this research will be the executives of the
company who can discuss about the operations of the company and information will also be
collected from the major customers of the company of UK. Interviews will be conducted with 50
executives handling the online operations of the company and the survey will be conducted with
100 customers of the company (Laudon and Traver 2018).
Report to management
The present problems faced by the company related to e-commerce
E-commerce has become a major part of the organizations strategy who wish to satisfy
the needs the customers because the customers if present generation are tech savvy and they
want convenience in all their activities. If a company adopts e-commerce activities it will be
better able to attract the customers but for that a robust strategy is needed. The major problems of
Walmart is that it needs to meet the needs of the customers through Omni-channel of channels
but the company is currently not able to decide whether it should focus in its offline channels of
distribution or it should invest more in improving its online channel of operations (Turban et al.
2017). The main problems with Walmart is that it is a company that used to follow the brick and
mortar technique of sales and since it has started its e-commerce business so it is facing many
issues related to the same. Amazon which is one of the major competitors of the company,
increased market value over Walmart by 264 billion dollars and through this it can be said that e-
commerce is a major threat in retail industry. In order to improve the efficiency of operations’
and to increase sales it is necessary for the company to carry out its online operations. The e-
commerce strategy adopted by Walmart is causing it to lag behind in online sales (Effing and

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Spil 2016). According to a recent report, the company has lost its sales growth in the fourth fiscal
quarter of the company. This included the holiday shopping period where the sales should have
been more by the company faced a lag. The company’s growth of online sales has declined from
the previous three fiscal quarters (Tan et al. 2016). The company’s chief executive said that the
online sales had declined because of various operational challenges of the company. This
strategy of the company has put it in a disadvantageous position to its major competitor if
Amazon. The company needs to change its present e-commerce strategy in order to improve its
operations’ online and to take advantage of online retailing (Ghezzi, Cortimiglia and Frank
2015).
The present e-commerce strategy used by Walmart
Walmart has decided to carry out acquisition activities of other online retailers such that
they can meet the needs of the customers in a better way. The company decided to carry out the
acquisition of the Moosejaw company that is outdoor retailer and this strategy is expected to
represent the company’s lack of proper e-commerce strategy. Amazon is continuously occupying
the online retail market through is e-commerce strategies whereas Walmart is only carrying out
strategies such as acquiring the smaller unprofitable retailers of the market. Amazon’s is seen
occupying the retail market as it occupied about 41% of the online purchases. It occupied about
half of the e-commerce growth in US through its e-commerce strategy. Walmart is not being able
to compete Amazon irrespective of its biggest advantage- its size but the company is lacking a
proper e-commerce strategy that is causing it lag behind other giant retailers. E-commerce
occupies only a proportion of the company total sales. The return on investment for the inline
activities of the company is not sufficient when compared to the huge amount of the investment
made in order to improve its online sales. Walmart is trying to improve is sales inline and catch

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up with the giant companies through the use of product assortment technique and the expertise of
the smaller retailers like Moosejaw and jet.in. However, for a company like walmart these
activities are not sufficient. Its online sales can be improved through carious techniques and
online strategies of the company as the company’s e-commerce strategies have a scope for
improvement. The company lacks any proper plan and strategy that can help it to increase its
growth in online retailing and to reach the growth rate of 27% as has been reached by Amazon.
This strategy of the company in combining with other smaller retailers can help the company to
attract new customer base. About 50% of the customers if the online channel of the company
have an annual income of 60000 dollars and the online customers of Moosejaw earn about 60000
dollars. The order value of Moosejaw is more than that of Walmart and therefore by acquisition
of the same the company can increase its overall order value and increase its customer base of
people earning an annual revenue of 60000 dollars. There have been various scenarios in which
acquisitions led to strategic advantages of the company such as Apple’s acquisition of BroadMap
has helped the company in improving its mapping activities. A cohesive strategy demands high
scale acquisitions therefore if the company announces acquisition of large number of smaller
retailers that will be a strong strategy o part of Walmart. Through its present strategy the
company is trying to create better relationship with small retailers of shoes and apparels and that
will help the company to sell its products at modest process and therefore attract new customers
who are price conscious.

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Figure 1: the revenues of Walmart and Amazon
Source: (Walmart.com, 2019)
From the above diagram, it can be seen that the revenues of Walmart and Amazon differs
from each other to great extent as Amazon occupies a greater portion of online retailing and is
continuously growing in the same. On the hand, Walmart is not taking much actions to defeat
Amazon in online sales.
A new dynamic strategy can be adopted or some changes can be made to the
existing strategy
The e-business strategy is not only used for organizations that carry out its operations
online but also for all the organizations which wants to improve their performance and become
successful. The e-business has changed the supply chain of the organization by saving the
organization from flow of information from one person to another in the supply chain (Lipitakis

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and Phillips 2016). With the help of e-businesses, the consumers can get all the information
easily and at a faster rate. Internet allows the interaction of the customers with the company.
Information flow in case of traditional business strategy was from the producers to the
consumers. The e-commerce strategy helps in the flow of information in both ways- from
producers to consumers and from consumers to producers and this helps the company in
becoming a customer centric organization. When the flow of information is from the customers
to the producers then the producers can produce goods that will help in meeting the needs of the
people. E-commerce business strategy helps the organization in improving the customers
experience by giving them multichannel opportunities. The company increases its sales with the
help of this e-commerce strategy. The e-commerce strategy business model will help in
transforming the company into a place where the buyers and the sellers can work together and
therefore help in improving the processes. It becomes important to have a system of enterprise
resource planning in organizations in order to carry out the activities of e-business effectively. It
is also important for the organization that are going to apply the-business strategy model to have
inter-organizational systems. Using this strategy, the organization can change its organizational
structure, carry out knowledge management activities, carry out new business process and many
others. In order to carry out these strategies within the organization, it is important to plan and
carry out innovation activities (Cortimiglia, Ghezzi and Frank 2016).

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Figure 2: the dynamic e-business model
Source: (Lipitakis and Phillips 2016)
From the above diagram, it can be seen that the company looking for application of the e-
business strategy model, undergoes the above mentioned stages. There are certain events that
makes it compulsory for the organization to carry out e-commerce activities. The organization
may adopt this model in order to improve their knowledge building capabilities and for other
purposes. A model is designed depending upon the goals of the company. For instance if an
organization has the objectives of improving sales of the company they will design an e-
commerce model for achieving the same. Next the business needs to plan for the application of
the model designed. The application needs to be modified from time to time and it needs to be
developed. Walmart can apply this model in order to improve their e-commerce operations. The
company is presently facing challenges from giants such as Amazon and others so in order to
defeat them the company can apply this model.

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References
Akter, S. and Wamba, S.F., 2016. Big data analytics in E-commerce: a systematic review and
agenda for future research. Electronic Markets, 26(2), pp.173-194.
Corallo, A., Errico, F., Latino, M.E. and Menegoli, M., 2018. Dynamic business models: a
proposed framework to overcome the death valley. Journal of the Knowledge Economy, pp.1-24.
Cortimiglia, M.N., Ghezzi, A. and Frank, A.G., 2016. Business model innovation and strategy
making nexus: evidence from a cross‐industry mixed‐methods study. R&D Management, 46(3),
pp.414-432.
Cui, M., Pan, S.L., Newell, S. and Cui, L., 2017. Strategy, resource orchestration and e-
commerce enabled social innovation in Rural China. The Journal of Strategic Information
Systems, 26(1), pp.3-21.
Effing, R. and Spil, T.A., 2016. The social strategy cone: Towards a framework for evaluating
social media strategies. International journal of information management, 36(1), pp.1-8.
Ghezzi, A., Cortimiglia, M.N. and Frank, A.G., 2015. Strategy and business model design in
dynamic telecommunications industries: A study on Italian mobile network
operators. Technological Forecasting and Social Change, 90, pp.346-354.
Hua, N., 2016. E-commerce performance in hospitality and tourism. International Journal of
Contemporary Hospitality Management, 28(9), pp.2052-2079.
Laudon, K.C. and Traver, C.G., 2016. E-commerce: business, technology, society.
Laudon, K.C. and Traver, C.G., 2018. E-commerce 2017.

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Lipitakis, A. and Phillips, P., 2016. On e-business strategy planning and performance: a
comparative study of the UK and Greece. Technology Analysis & Strategic Management, 28(3),
pp.266-289.
Pogorelova, E., Yakhneeva, I., Agafonova, A. and Prokubovskaya, A., 2016. Marketing Mix for
E-commerce. International journal of environmental & science education, 11(14), pp.6744-
6759.
Rahayu, R. and Day, J., 2015. Determinant factors of e-commerce adoption by SMEs in
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pp.142-150.
Sharma, G. and Lijuan, W., 2015. The effects of online service quality of e-commerce Websites
on user satisfaction. The Electronic Library, 33(3), pp.468-485.
Tan, F.T.C., Guo, Z., Cahalane, M. and Cheng, D., 2016. Developing business analytic
capabilities for combating e-commerce identity fraud: A study of trustev’s digital verification
solution. Information & Management, 53(7), pp.878-891.
Turban, E., Whiteside, J., King, D. and Outland, J., 2017. Introduction to electronic commerce
and social commerce. Springer.
Walmart.com. 2019. Walmart.com | Save Money. Live Better.. [online] Available at:
https://www.walmart.com/ [Accessed 27 May 2019].