Question
Amazon is the undisputed e-commerce leader. Walmart is the largest retailer in the US and is fast gaining on Amazon in the e-commerce space through
Amazon is the undisputed e-commerce leader. Walmart is the largest retailer in the US and is fast gaining on Amazon in the e-commerce space through a variety of innovative approaches in general market competitiveness as well as its approach to human capital and employee satisfaction. The two leaders have been embroiled in fierce competition for some time and will remain at battle for the foreseeable future.
Herein, we evaluate Walmart's migration from brick and mortar to e-commerce. The firm has largely mastered this move while Amazon has struggled to make the reverse move (see its largely uneventful acquisition of Whole Foods, as an example).
The selected companies in this case analysis are Wal-Mart Corporation as well as Amazon Inc. Both these companies are in the retail industry whose headquarters are based in the United States. These two companies are explicitly antagonistic with each other in the industry. However, it must be noted that the strategic management of Walmart Corporation is considering offering it a competitive advantage over Amazon in the industry. Amazon Inc.'s business is more of online selling than offline selling which is the significant difference between the two companies.
Three of the images of change.
When reviewing the Six Images of Change Management, the three images of change we have selected are the Director, Navigator and Coach.
Analyze how those particular images would affect the ensuing diagnosis and implementation in your team's two selected companies on their change plans.
The three images of Director, Navigator and Coach affect our two companies' ability to create a culture where employees can excel and succeed. These images also keep their organizations in the top of their industries by being creative, staying innovative and being able to change direction when they become stagnant or complacent.
"The director image views management as controlling and change outcomes as being achievable as planned." p. 37 (Buchanan, I.P.R.D. D., 2016).When looking at Amazon's culture that Bezos has created, "One employee told the New York Times, "Nearly every person I worked with, I saw cry at their desk." He lasted less than two years at Amazon. And he's not alone. The median tenure at Amazon is one year; only the driven and obsessed survive. Former Amazon executive John Rossman calls it "the greatest place I hate to work." He even published a book about his experiences with the company titled, "The Amazon Way."The corporate picture painted in the article is one of ruthless brilliance and innovation, with no tolerance for whining or failure." (Smith, S. 2015)
From reading the above article you can see that Amazon's culture was created by someone with a director's image.When analyzing Walmart's culture, you can see how they are working towards several initiatives that will boost the morale of their employees. Let us look at a few of Walmart's initiatives:
Starting salary raised from $9 to $11 per hour
Expanded maternity and parental leave benefits
An adoption benefit of up to $5,000 per child that may be used for expenses incurred in connection with adopting a child
An education program that provides discounted college tuition, books, and fees, along with access to a coach to help guide employees through the process of choosing and applying to a school
The Walmart Academy, a two- to six-week training program geared toward helping supervisors, department managers, and assistant managers advance (Bariso, 2018).
When looking at Walmart's initiatives they are implementing, you can see how theNavigator image fits within CEO Doug McMillion's personality."In the navigator image, control is still at the heart of management action, although a variety of external factors mean that, although change managers may achieve some intended change outcomes, they may have little control over other results." p. 38 (Buchanan, I.P.R.D. D., 2016). Mr McMillion can do all the changes he wants but at the end of the day, every employee is motivated by different factors. For those who want more pay, the increase of $9 to $11 may not be worth them making it a career.
With the Coach image I see both companies falling into this category at times.
"In the coach image, the assumption is that change managers (or change consultants) can intentionally shape the organization's capabilities in particular ways. Like a sports coach, the change manager shapes the organization's or the team's capabilities to ensure that, in a competitive situation, it will be more likely to succeed." p. 40(Buchanan, I.P.R.D. D., 2016).
I would say that both companies are very competitive. Walmart CEO Doug McMillon "felt the company wasn't doing enough to compete with Amazon. The attitudes of consumers were changing, with more and more people shopping online. Additionally, many stores looked run down, and the shopping experience was lacking. Processes were old and broken, and employees lacked motivation." (Bariso, 2018).
"The company announced plans to invest heavily in e-commerce, an improved shopping experience, along with higher wages and employee benefits." (Bariso, 2018). "To better compete with Amazon, Walmart spent over $3 billion on e-commerce company Jet.com, and $16 billion on Indian e-commerce behemoth Flipkart. More recently, Walmart formed a strategic partnership with Microsoft to accelerate its digital retail efforts." (Bariso, 2018).
Amazon has also made several changes to stay competitive. "1. Delivering packages in new ways. The online retailer has been looking for a while to find a way to have more control over how its packages are delivered. The move gives Amazon more ways to ship its packages to shoppers without having to rely on UPS, FedEx, and other package delivery services. 2. More fulfillment centers.Amazon is expanding its footprint with more fulfillment and distribution centers across the U.S. 3. Brick-and-mortar stores. Amazon is looking at expanding its Amazon Go concept in other markets. Amazon's first store, which has no checkout lanes, opened in Seattle at the beginning of the year. The new concept Amazon Go will give consumers "the world's most advanced shopping technology so you never have to wait in line," according to the online retail giant.4. A closer relationship between Whole Foods and Amazon. 5. Entering the healthcare industry. Amazon.com Inc. is buying PillPack, an online pharmacy that offers pre-sorted dose packaging and home delivery." (Driscoll, 2018)
Explain how the change impacted the companies and who it impacted
"Walmart has been gaining on Amazon's more established online presence. A Deutsche Bank analysis from October of 2018 predicted that Walmart's 11 percent market share in the e-commerce world would swell to 17 percent by 2025 - but would still be dominated by Amazon by that point. The online giant plans to defend its market share by expanding both the Whole Foods footprint in 2019 and, potentially, the number of Amazon Go locations by 2021." (Comparably, 2015)
As far as who is impacted by both CEOs, let us look at both. "Ranked by Forbes last year as the richest man in the world, Amazon CEO Jeff Bezos is also one of the world's most famous chief executives and is thought of as highly driven. "Those who work with him feel he can be difficult. But it is because he knows, or wants to know, all aspects," says one Amazon employee. Another writes, "I think he's out of touch with the demands on the associates at the fulfillment level... the employee is just a number." (Comparably, 2015)
"After leading their Sam's Club division, Doug McMillon was made the fifth CEO of Walmart in 2014. He began with the company as a teenager in 1984. While one employee writes that the general feeling is that "the current CEO has the company headed in the right direction," McMillon is also accused by his workers of being out of touch: "(He) has no idea that the ideas he has implemented are failures." (Comparably, 2015)
Compare some of the similarities and differences between the change in the two companies
Walmart and Amazon are two companies that consumers love to shop at. These two companies offer many of the same products which keeps them at competition nonstop. Both retailers are attempting to gain customer loyalty by being easily accessible to customers and offering a wide range of products. Jooste, I (2018). Walmart and Amazon compete in almost every product category imaginable. These prodigious companies are known for their competition, but they have many similarities and differences between each other.
Walmart has many things in common with Amazon such as both companies being considered giants in the retail sector. These two companies both provide online shopping and they both bring in billions a year from online and in store sales. In 2016, Walmart's net income was 14 billion dollars and Amazon's net worth was 2.3 billion. Jooste, I (2018). They both offer automating self-checkout options at their in-person store locations.
The differences between these large retailers are more significant in physical locations. Walmart originated in 1962 and started off with locations located in many neighborhoods dominating the idea of a one stop shop. Walmart has physical store locations in 27 countries making it accessible for people who prefer shopping in person. Amazon was founded in 1994 as an ecommerce retailer excelling in online shopping for convenience. Although Amazon does not have an abundance of physical locations that are available to consumers in 127 countries all over the world.
Another huge difference these two large retailers have is the number of products they offer to their audience. Walmart offers more than 4 million products across all categories while Amazon offers 250,000 million products varying as well across all categories. Walmart offers free shipping to their consumers while Amazon charges a membership to their consumers. The results of both companies competing have brought in so many opportunities and wealth as they are expanding their locations both in store and online thus creating more jobs for people and building the economy. These results have also allowed both companies to succeed by stepping out the box and offering a variety of products for everyone no matter their culture, race, or religion. These differences as well as similarities spark up continuous competition between the two retailers and it does not look like they will slow down anytime soon.
When looking at all three change management images, the Director, Navigator and
Coach you can see that both companies are able to interchange between the three images as needed to compete. They are both working to gain more of each other's market share. Walmart is doing more to move into the ecommerce space while Amazon is putting up more brick and mortar stores. They are also working on establishing a work culture that makes them distinctly different from other organizations.
Both CEO's operate in the Director image by implementing plans and directives that they want to see happen within their respective organizations. They take control and expect orders to be carried out as outlined. When they are operating in the Navigator image, they still have control but also have outside things that influence the outcome of the change.We can take the Corona Virus for example; more people are wanting to shop online with many states that have mandatory stay at home orders.This can affect the sales at Walmart to decrease during this time with having to limit the number of customers in the stores and those who do not want to shop from fear of being exposed to the virus.
When operating in the Coach image, they both are very competitive companies.However, we see Amazon doing more to push their team members to not stay complacent but strive to excel and think outside the box.Walmart's culture does not seem to have that same drive for competition with its employees, but the company is very competitive with Amazon and others in the same industry.
The combination of all three images seem to work so far with both two companies.If we pick two of the three images as a combo, the Director and Navigator seem to work the best.
A director is a general image representing the organizational image. This is because this is the image that oversees various operations within the organization. On the other hand, a navigator is an image that initiates, leads. It supports the expansion of new working ways of the organization with a focus on simplicity, which translates to a competitive advantage in the market.
Finally, a coach is an image that tends to assist as well as guide the organizational owners in running the business. It is this same image that tends to help the business owners in the clarification of the organizational vision as well as how to fit in their personal, organizational goals. It is important to note that these images have a standard comparison in that they aim to attain organizational success (Casadesus-Masanell, & Elterman, 2019).
The contrast between these images is that each image has specific tasks with different approaches to fulfilling the tasks. Since our companies of choice belong to the same industry, the discount retail industry; the director image will react in a manner as to question or even terminate the employment of some employees within the organization, including even the navigator and the coach. This can happen more precisely when the performance of the organizations has failed. The coach and the navigator will behave strictly to those under their supervision during the change in the organizations. The reaction of the director's image will, to a large extent, improve the performance of the organization since every employee will be under pressure to deliver or his or her contract be terminated (Onyusheva, & Seenalasataporn, 2018).
The same will tend to replicate the changes of the coach and the navigator. Since they will be more vigilant in ensuring that what they say is what is being done on the ground, there is a high possibility that the performance of the two organizations will increase. However, the margin of change will be more significant for Walmart as compared to Amazon. This is because, at Walmart, the employees greatly determine the sales since they are directly in contact with the customers. On the other hand, Amazon's operations are more online, where the marketing and advertising team is the most important in boosting sales (Onyusheva & Seenalasataporn, 2018).
Summary and Conclusion
We set out to identify the images of change used by Amazon and Walmart and then to determine how each company performs from a competitive standpoint. Our conclusion is that in its core area of retail, Walmart's slightly kinder, gentler (but still competitive!) approach lends to a higher probability of long-term success against Amazon's ever-growing retail ambitions. This is not to say Amazon will not excel in the many other areas in which it competes - but retail, even e-commerce, largely remains Walmart's game to lose over the long-term.
Walmart takes a more collaborative and inclusive approach to change than does Amazon. Rather than force necessary change on its employees, Walmart accomplishes its goals by achieving widespread buy-in. Amazon is notorious for employee burnout largely because the firm never ceases its hard-charging, competitive drive for ever-greater success.
Question #1) Create a SWOT analysis for each of the two companies (Amazon and Walmart) change plans/programs, utilizing information obtained in the diagnosis (strengths, weaknesses, opportunities, threats).
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