Wal-Mart.com (Essay Sample)

Wal-Mart.com
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Introduction
Wal-Mart Stores, Inc., commonly branded as Walmart, is a large multinational retail corporation in the U.S that runs various chains of huge discount department stores as well as warehouse stores. On other hand, Walmart.com is an online shopping site for the largest collection of electronics, video games, baby gear, home furnishings, groceries, shoes, sportswear, books, and many more assortments. Since its adoption, online shopping has been of great significance to Wal-Mart as it has enormously increased customer turnout and even customer satisfaction. Most interestingly, it has fastened transactions between the company and its customers. Owing to the above alluded facts, this paper seeks to ascertain the actual impact of Wal-mart.com by answering the following questions.
What is the impact of Wal-mart.com on customer borne transactional costs?
Wal-Mart as a company operates under a very simple but lucid business philosophy. Coined by Sam Walton, its philosophy puts all interests of the customer at heart by ensuring that the customer is given the first preference at no cost. In order to effect this hilarious strategy, Wal-Mart developed a thrilling shopping site by the name “Wal-Mart.com” that aims at extending the company’s lucrative philosophy and culture to the internet (Brickley, Smith, & Zimmerman, 2009).
Based upon marketing facts, Wal-Mart.com is a very ambitious site that rationally combines technology along with world-class retailing so that customers can be offered an extensive range of product assortment, friendly service, guaranteed satisfaction, and convenient shopping on an unlimited basis.
Basically, the launch of Wal-Mart.com will significantly reduce consumer-borne costs through a number of means discussed under this subsection. First and foremost, Wal-Mart.com will greatly reduce the expenditure of time spent by consumers as they drive to any of Wal-Mart’s stores within their vicinity. In fact, it will totally subdue the long time spent in the line by consumers as well as the time required to return back to their homes. It is adequately known that, time a better resource. Subsequently, it is said that; time is money and therefore the aforementioned economy of time considerably stands to reduce consumer-borne transaction costs to a larger extent.
Wal-Mart.com will foster the implementation of a “Product Search Engine” that will actually make it easier for customers to locate their desired products and services. Subsequently, customers will stand a better chance of making price comparisons between different brands of various commodities displayed in the site. In the long run, consumers will be able to purchase commodities that comply with their own preference in terms of costs thus reducing expenses associated with impulsive buying of goods.
Above all, the site offers a potential possibility to either pick-up or return products that were initially ordered online in any Wal-Mart store, thus implying a cutback in stiff negotiation efforts. More often, negotiation tends to take a lot of efforts and time, and therefore reducing its threshold will significantly reduce customer-borne transaction costs in the long run.
Finally, as much as Wal-Mart.com offers a reliable opportunity to shrink consumer-borne transaction costs as exposed above, it is paramount to point out that the company should expect a slight increase in the transaction costs during the initial stages of project implementation due to extra time spent in adopting the new online-shopping procedures.
Do you think that Wal-Mart.com is likely to create additional value?
Based upon provisions on Economics of Strategy, it is clear that the launch of Wal-Mart.com will definitely create additional value in a number of ways. First, Wal-Mart.com will significantly lower the production costs or in other words the producer transaction costs. It will be able to reduce the production costs by the fact that it will lead to a reduction in the number of workers, rent, and advertising costs. This is because; doing business online will reduce manual labor required in the discount store to a large margin. As a replacement for intermediate warehousing, the site will deliver the ordered products to consumers directly, thereby lowering producer transaction costs. The abovementioned additional values will eventually shift the company’s supply curve towards the right thus resulting to a positive shift of the demand curve also.
Wal-Mart.com will facilitate a Multi-channel Selling Strategy in the company. This is because; customers can place an order of various products after which they can pick the products from the store at their own convenient time.
Walmart.com will enhance online advertisement of the company’s products and services. Currently, print advertisement is facing out, and therefore the site will facilitate an effective transition of the company from the analog world to the digital world thus creating a significant additional value.
Through offering an extensive choice of high class and quality products under one blog, Wal-Mart.com will give customers an opportunity to make comparisons of products online thus creating additional value. However, for Wal-Mart.com to deliver the desired results and ensure efficiency, the company will need to seek guidance from other online businesses that have experience in the electronic commerce.
Should Wal-Mart have pursued e-commerce more aggressively sooner?
Experts say that; in order for a company to prosper in e-commerce, it ought to get in early in order to keep truck of the changing technological times. However, Wal-Mart.com entered into the World Wide Web too late than most of its competitors. As a result it had to suffer huge losses since competitors had already established themselves in the E-commerce market (Epstein, 2004).
Nevertheless, missing out during the initial migration of companies to E-commerce does not necessarily imply that Walmart will not catch up with other companies. In fact, it is beneficial to Walmart since most of its competitors who rushed into E-commerce without clear interventions faced enormous challenges that threatened their existence to a larger extent. In this regard, Walmart was offered the opportunity to learn from its competitors, after which it can launch a huge step towards E-commerce.
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