With reference to the article in the February 1, 2014 issue of The Economist titled "Less Amazing than Amazon,"...

With reference to the article in the February 1, 2014 issue of The Economist titled "Less Amazing than Amazon," [http://www.economist.com/news/business/21595435-worlds-biggest-retailer-stumbling-its-genial-new-boss-needs-prove-he-can-push-through-hard-changes], what are your thoughts, and why, reviewing statistics, would one say Walmart is less amazing than Amazon?

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kipling2448 | (Level 3) Educator Emeritus

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For the most part, the worst criticism anyone could make about Amazon.com since its founding in 1994 was that its online purchasing service allowed consumers to avoid paying state sales taxes.  As more and more people looked into Amazon’s background, however, additional blemishes began to appear, including worker conditions and the company’s reputation for hostility towards unionized labor.  By and large, however, it has succeeded at revolutionizing the retail industry and providing a level of service previously unheard of to those born subsequent to the demise of the old Sears, Roebuck and Company catalogue of years  past.  Amazon has, in fact, represented perhaps the greatest transformation in routine manner in which people shop for consumer goods in centuries. 

If one of Amazon’s greatest strengths is its success at ubiquity combined with its invisibility – in effect, it has a very limited infrastructure “footprint” by virtue of its mail-order concept – then Walmart could be considered its antithesis.  While thousands of massive “superstores” have been implanted across the country, visibly altering the landscape while displacing smaller retail operations that can’t compete with Walmart’s pricing system, it has also become associated with allegations of unfair labor practices, disregard for its impact on the communities it purportedly serves, and its practice of forcing wholesalers into disadvantageous business arrangements in order to have their merchandise sold in these huge stores.  In short, while Walmart has become an American – and, increasingly, international – fixture, it has also accumulated more negative publicity than any corporation wants or needs.

In addition to the above, Walmart has also succeeded in reaching its point of diminishing returns.  In other words, it has saturated the market to the point that is beginning to lose returns on investments.  And, finally, it has responded to Amazon’s hold over the online purchasing marketplace by expanding its own operations oriented toward the stay-at-home shopper.  It is in this context, then, that the article, “Less Amazing than Amazon” [The Economist, February 1, 2014], was written.  For a company with the negative image experienced by Walmart to attempt to expand its business empire into the online retail business dominated by Amazon while oversaturating the conventional retail market and transitioning to smaller, neighborhood stores is tantamount to what foreign policy analysts and historians might call “imperial overreach.”  Walmart is trying to become too many things to too many people, and that could stretch its resources and abilities thin.  The fact that Target Corporation has emerged as a serious competitor serves only to further diminish Walmart’s reputation given the latter’s labor issues and the recent allegations of improper business practices in Mexico.  The article’s point, that Walmart has lost its way and may harm itself trying to copy Amazon’s business model, is simply pointing out the obvious.

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