Course Project Tasks: Compile the information you have gathered on your companies in weeks 1-4 to answer the following questions. What is the relationship between your companies and their respective e

Running Head: WALMART AND AMAZON

WALMART AND AMAZON PROJECT SUMMARY

Jessica Arroyo

South University

3-8-2021

Summary of the two companies

Amazon has invested in the line of technology whereby it runs several operations such as cloud computing activities (Amazon.com). On the other hand, Walmart is a major retail distributor of different products not only in United States but also in other different countries around the world. The main similarity of the two companies is that they both depend on technology in order to reach out to as many clients as possible.

For example, Amazon advertises its items all over the world and can deliver them effectively to the clients. Walmart on the other hand also reaches out to many clients all over the world through the online platforms. The companies have also invested in several countries hence widening their market size instead of depending only on the market that is available in the United States.

The companies also have different investment approaches which are visible in their balance sheets, despite each of them being major market leaders, there is no common strategy of approaching the market. Both companies have also invested in different areas especially in human resources and also in the environment.

Amazon ensures that it has employed and retailed the best employees while on the other hand, Walmart focuses on corporate governance. It has fostered activities such as ensuring that there is integrity, excellence and other factors that are meant to foster a conducive working environment. All this show that the companies possess a common strategy of investing in developing a positive working culture hence motivating the employees to give better results.

The two companies have invested in highly competitive fields where they compete against each other especially when it comes to retailing electronics. They also have several other competitors both in United States and other parts of the world. However, they have been able to retain their profits through making several strategic steps and also in determining the most appropriate steps of approaching the competitive market.

Financing Activities

Walmart use shares as one of its financing activities, whereby it has set an attractive price of $41.83 per share. This is different from the $4.75 price per share that is being used by Amazon. To Walmart, the higher the shares that clients invest the higher the capital that will be available for making higher investments. (Macrotrends. 2021).

Another financing strategy that is used by Walmart is through obtaining different types of resources from different producers in order to sell them on their behalf with a guaranteed profit on their investment. It also uses the strategy of borrowing cash which is to be returned on a long-term basis. This helped the company to retain a long-term flow of varies of products which are sold inform of retail in both online and physical Walmart outlets in different countries.

Amazon also uses a similar strategy of acquiring different manufacturers of different technological products which it sells on its behalf with a guaranteed profit after the sales. This way, the company’s capital is not limited as different technological gadgets producers depend on it for the purpose of accessing a market in different parts of the world where Amazon has created market. The company also depends on shares although they are relatively cheap compared to those of Walmart.

Investing Activities

Walmart’s main investing activity is through the use of distribution strategy, whereby all its stores offer similar items and runs through similar processes. At the same time, the items sold in their shops are similar to those that are sold online. This distribution strategy has guaranteed clients that they will always get the right products despite of the method that they will use. Another key investing strategy that has been used by the company selling a variety of items. This has helped in creating a higher market as the client is always assured that they will get all their needs under one roof.

The main strategy that is being used by Amazon is through ensuring that the price of products is cheaper than that of all other competing companies. These attractive prices tend to pool a large number of customers to the company hence increasing the amount of profit made. Amazon makes little profit per sold item but through selling several items, higher profits are made.

Another strategy that Amazon uses is through investing in a future oriented strategy. It has invested in solving the needs of better technology hence attracting a higher number of clients who depends on the evolving use of technology such as cloud computing activities.

Comparison of the Two Companies

Walmart has invested more on the stocks which means that it possesses less cash in hand compared to Amazon. For example, in the year 2021 January, Amazon has a balance sheet of $84.396 billion while Walmart had $17.741 billion.

Another major different between the two is on accounts receivable whereby Walmart had $6.516 billion while Amazon had $24.542 billion. This shows that the two companies use different approaches on their investment strategies.

When it comes to the general setup and property investment of the company, Amazon has property, plant, and equipment worth $113.114 billion, while Walmart has similar property worth $92.201 billion.

Walmart has less liabilities compared to those of Amazon has Amazon has liabilities worth $227.791 billion while those of Walmart are $164.965 billion. At the same time, Amazon has higher value total assets worth $321.195 billion compared to those of Walmart which are $252.496 billion. (Macrotrends. 2021).

Opinion on the Strategies

Amazon has invested more on its own property which is different from the strategy that has been used by Walmart. My opinion is that Walmart’s strategy seems to be yielding higher income current but then the strategy cannot be said to be sustainable. On the other hand, Amazon is future oriented as it is setting up equipment and strategies that will be effective in long term bases as future technological trends may depend on well-equipped organizations so that to enhance their productivity.

References:

Amazon.com. (2021). Corporate Governance. Retrieved 21 February 2021 from https://ir.aboutamazon.com/corporate-governance/default.aspx

Macrotrends. (2021). Amazon Balance Sheet 2005-2021 | AMZN. Retrieved 28 February 2021 from https://www.macrotrends.net/stocks/charts/AMZN/amazon/balance-sheet

Macrotrends. (2021). Amazon Income Statement 2005-2021 | AMZN. Retrieved 28 February 2021 from https://www.macrotrends.net/stocks/charts/AMZN/amazon/income-statement

Walmart. (2021). Governance. Retrieved 21 February 2021 from https://corporate.walmart.com/esgreport/governance