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All of which, ironically enough, was Walmart's original playbook: grow huge, realize economies of scale so drastic that nobody else can hope to compete on price

All of which, ironically enough, was Walmart's original playbook: grow huge, realize economies of scale so drastic that nobody else can hope to compete on price, then use your size and buyer power to put even more downward pressure on supplier prices. Amazon vs. Walmart is an extremely interesting battle to watch. Amazon has massive advantages in technology; Walmart has massive advantages in size, distribution, and logistics. Amazon is gaining a lot of ground in the US; Walmart is much stronger than Amazon internationally. If I had to place bets, I'd take Amazon in the long run. They're much more forward thinking and are playing a much more strategic game. Walmart has become overly reliant on price leadership and has had a very hard time orienting toward the future of retail. The Innovator's Dilemma will catch up to it eventually -- but it'll take awhile, because Walmart is so damned massive and dominant right now.

josh2600 13y ago
Don't forget: All else being equal, Walmart takes a profit. That's why I'm bullish on Amazon from an economic perspective. Culturally, I often wonder about the consumer value of monopolized markets.
- jonnathanson 13y ago
  Traditional economics holds that monopolies are bad for consumers. Essentially, this is because the monopolist can do whatever it wants, and the consumers have no alternative. The monopolist has no incentive to keep prices low, to innovate, or to improve its service level, because the consumer can't exactly go elsewhere. These days, however, the threat of new entrants into any given market is much higher. Starting costs are drastically lower than they were when conventional microeconomic theory was being worked out. All things being equal, as a consumer, you still don't want a monopolist owning the market -- but the monopolist has to be somewhat cautious, for fear of disruption. It seems highly unlikely that Amazon will ever operate a true monopoly over all categories of retail. Nor will the government (and competitive lobbying) allow it to get there. But an oligopoly is certainly possible. (On a micro level, Walmart has basically functioned as a de facto monopolist in certain regions where it has virtually no competition. Those days are over, though.)
  - chrismealy 13y ago
    Monopoly profits, from the very beginning of capitalism, have always been necessary for significant investment. Micro textbooks are just wrong. For most businesses the supply curve slopes down, not up.
revelation 13y ago
Walmart is much stronger internationally? They crashed and burned in Germany, and the map of their international locations is.. not very impressive. Frankly, looking at the US map, as a non-american, even there their presence isn't particularly exhaustive. The USA just happens to be a big market.
- bane 13y ago
  Despite being a rich country, the US has a surprisingly wide wealth disparity. Walmart targets the lower end of that wealth gap. It seems that Walmart struggles in countries with a smaller wealth gap (at least w/r to local economics).
  - alexeisadeski3 13y ago
    The US has a smaller income disparity than Germany...
    - wwosik 13y ago
      Huh, on what scale? http://en.wikipedia.org/wiki/List_of_countries_by_income_equality http://en.wikipedia.org/wiki/List_of_countries_by_income_equ... I just hate people saying what-not about easily verifiable facts.
      - alexeisadeski3 13y ago
        At your own link: http://en.wikipedia.org/wiki/List_of_countries_by_income_equality#Gini_coefficient.2C_before_taxes_and_transfers http://en.wikipedia.org/wiki/List_of_countries_by_income_equ...
    - sveme 13y ago
      Citation? The OECD says otherwise (figure 4, Gini Coefficients for a number of OECD countries): http://www.oecd.org/els/soc/OECD2013-Inequality-and-Poverty-8p.pdf http://www.oecd.org/els/soc/OECD2013-Inequality-and-Poverty-... The US is on level with Turkey, only Mexico and Chile are worse.
srik1234 13y ago
Walmart is quickly catching up on technology. It acquired bunch of startups recently and opened walmart labs in the valley. Their website also improved quite a bit in terms of recommendations and other services. I think they are improving quite a bit in this regard.

josh2600 13y ago

Don't forget: All else being equal, Walmart takes a profit. That's why I'm bullish on Amazon from an economic perspective. Culturally, I often wonder about the consumer value of monopolized markets.

jonnathanson 13y ago
Traditional economics holds that monopolies are bad for consumers. Essentially, this is because the monopolist can do whatever it wants, and the consumers have no alternative. The monopolist has no incentive to keep prices low, to innovate, or to improve its service level, because the consumer can't exactly go elsewhere. These days, however, the threat of new entrants into any given market is much higher. Starting costs are drastically lower than they were when conventional microeconomic theory was being worked out. All things being equal, as a consumer, you still don't want a monopolist owning the market -- but the monopolist has to be somewhat cautious, for fear of disruption. It seems highly unlikely that Amazon will ever operate a true monopoly over all categories of retail. Nor will the government (and competitive lobbying) allow it to get there. But an oligopoly is certainly possible. (On a micro level, Walmart has basically functioned as a de facto monopolist in certain regions where it has virtually no competition. Those days are over, though.)
- chrismealy 13y ago
  Monopoly profits, from the very beginning of capitalism, have always been necessary for significant investment. Micro textbooks are just wrong. For most businesses the supply curve slopes down, not up.

revelation 13y ago

Walmart is much stronger internationally? They crashed and burned in Germany, and the map of their international locations is.. not very impressive. Frankly, looking at the US map, as a non-american, even there their presence isn't particularly exhaustive. The USA just happens to be a big market.

bane 13y ago
Despite being a rich country, the US has a surprisingly wide wealth disparity. Walmart targets the lower end of that wealth gap. It seems that Walmart struggles in countries with a smaller wealth gap (at least w/r to local economics).
- alexeisadeski3 13y ago
  The US has a smaller income disparity than Germany...
  - wwosik 13y ago
    Huh, on what scale? http://en.wikipedia.org/wiki/List_of_countries_by_income_equality http://en.wikipedia.org/wiki/List_of_countries_by_income_equ... I just hate people saying what-not about easily verifiable facts.
    - alexeisadeski3 13y ago
      At your own link: http://en.wikipedia.org/wiki/List_of_countries_by_income_equality#Gini_coefficient.2C_before_taxes_and_transfers http://en.wikipedia.org/wiki/List_of_countries_by_income_equ...
  - sveme 13y ago
    Citation? The OECD says otherwise (figure 4, Gini Coefficients for a number of OECD countries): http://www.oecd.org/els/soc/OECD2013-Inequality-and-Poverty-8p.pdf http://www.oecd.org/els/soc/OECD2013-Inequality-and-Poverty-... The US is on level with Turkey, only Mexico and Chile are worse.

srik1234 13y ago

Walmart is quickly catching up on technology. It acquired bunch of startups recently and opened walmart labs in the valley. Their website also improved quite a bit in terms of recommendations and other services. I think they are improving quite a bit in this regard.