Tuesday, January 26, 2010

SWOT analysis

I read an article “Price War Brews Between Amazon and Wal-Mart” from NY Times website(http://www.nytimes.com/2009/11/24/business/24shop.html). It talked about the competition in “price-sniping” of Wal-Mart and Amazon. Wal-Mart originally is a retail grocery store while Amazon is an e-commerce company, yet they both offer many same products. With a technology shift, it is easier for consumers to compare prices and buy products online. Wal-Mart realized a change in shopping trend. It recognized a threat in e-commerce industry from Amazon while spotted an opportunity to expand its market.

From the article, I have summarized Wal-Mart SWOT Analysis compared to Amazon

Strengths
-Reputation in low-every-day price
-Good relationship with suppliers

Weakness
-Amazon has a developed network for web shoppers
-Amazon’s customers do not have to pay taxes while Wal-Mart’s customers do.

Threats
-Technology shift: customer can check prices online and buy products online
-Some customers prefer to shop online rather than go to a store

Opportunities
-Expand its market by creating a better online shopping website
-Develop and implement its 4Ps strategies

I think it is surprising to realize that a grocery store is now facing competitors from internet. I would never think that I will buy grocery online. However, with a shift in technology, it is become normal for people to shop online. This article shows that SWOT analysis is a crucial approach, enabling companies to fully understand and evaluate their performances. It is also a guideline for companies to develop and improve their marketing strategies in a constantly changing market environment.

1 comment:

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