JET VS AMAZON Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Jet vs Amazon Case Study Solution

Resources and Capabilities

Amazon

The resources and capabilities needed by the Amazon to compete in the industry and makes it difficult for the other e-commerce companies to imitate are due to its many diversified products, strong technological infrastructure, and logistics. Amazon deals with almost all the products online which people could easily access for buying or selling with just one click. This is one of the major reasons that Amazon is the leading e-commerce website. The other strategy which had also made Amazon occupy the position is because of its leadership and employees. The employees are motivated, trained; their knowledge and experience are improved through employee empowerment programs. The strong technological infrastructure is like the one click payment which makes easy for the customers to make purchases on Amazon websites such as the EC2 and S3. The strong logistics of Amazon make high availability of its services through multiple zones. The company deals in almost all the regions of the world where countries have access to PayPal.[1]

The other capabilities which make the company compete in the industry are the discounts offered in the products, quick delivery, and strong revenue growths which have made company the leader in the e-commerce industry. These resources and capabilities such as diversified products, strong technological infrastructure, logistics, online marketing channel, and promotions create value for the company. These resources and capabilities also lead the company to gain a competitive advantage in the online market.[2]

JET VS AMAZON Harvard Case Solution & Analysis

Wal-Mart(Jet)

Wal-Mart is an American multinational retailer which operates hypermarkets, discounted departmental stores, and grocery stores. Walmart is one of the largest companies to make strong revenues in U.S through retailing. It started dealing in the online industry. Its first initiative was acquiring Jet.com in the year 2016 on September 19 when Jet.com became a subsidiary. This made Walmart enter the online retailing industry,where it would face heavy competition in the market. [3]

The resources and capabilities that make Jet.com compete in the online retailing market are due to being a subsidiary of Wal-Mart, a strong multinational retailer, it would use Wal-Mart’s own product in Jet.com and sellers could also use this platform for selling its products. By joining hands with Wal-Mart, Jet.com gains billions of dollars in infrastructure, relationships with thousands of Wal-Mart vendors and along with many diversified products.

One of the biggest advantages which Jet.com gains from Wal-Mart is the improvement in the logistics and distribution. Currently, 90% of the Wal-Mart stores are situated near every American residential society fifteen minutes in the U.S. This would lead the company to be cost effective for transporting the goods to the buyers. Other resources and capabilities necessary for Jet.com to compete in the online industry are the strong technological infrastructure such as easy payment system and attractive website. Jet.com had launched a program called Jet Anywhere in which the Jet users would receive Jet cash during their purchases which then could be spent on its website for purchasing items. The resources and capabilities such as being the subsidiary of Wal-Mart, strong logistics, and jet pricing programs create value for the company. The other resources and capabilities which also create value and gain competitive advantage are the low prices, fast delivery due to strong logistics, cost saving and Wal-Mart’s distribution centers and stores.[4]

Firm’s Performance

Amazon

Due to the increase in the technology and advanced technological system being implemented nowadays, people have started to switch their buying and selling activities online. Most of the people now prefer to buy items online because of the ease instead of going to shopping malls and outlets. Amazon strategy is first to understand the needs of the customer and monitors as what the customer does when it visits its website. The overall strategy is to provide diversified products to the customers online which they could easily purchase through one click payment. Amazon becomes the leader in the online e-commerce industry by targeting the entire world and also through acquiring online channel and partnering with distributors.

The financial performance of the company is that its net sales had been increasing throughout the 5 years (2011 – 2016), although it has failed to show profits as they had been going through loss until in 2016 it had posted a revenue of around $43.7 billion in the fourth quarter. The overall sales of the year 2016 were around $136 billion in which 94.7 billion came from the products while remaining came from providing services. The company had been suffering from losses due to the high operating costs which resulted in a net loss.[5]

Comparing Amazon’s financial performance results with the e-commerce industry for the last five year, its growth rate was 28.30 for the last five years while the industry growth rate was around 18.90. The growth was determined by the company’s net sales meaning that its sales were better compared to the industry. However, the net profit margin was around 1.28% for the last five years while the e-commerce industry profit margin was around 4.96%. The reason for the net profit margin was mainly due to the heavy operating cost because of which the company suffered net losses during the year 2013 and 2014, but it started to earn profits after 2015. The operating costs consist of the purchasing of equipment, shipment costs, packaging supplies and also including the Prime Video and Prime Music. The main reason for the operating costs to increase was due to rise in the shipping rates and also the FBA fees........................

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