Module 1 Critical Thinking Case Group Assignment

Assignment Instructions

To complete this assignment, you will work in a group assigned by the instructor.  Designate one group member as the group recorder that will respond with the group's response. Please address all the questions in full and cite your sources.

This group discussion activity is worth 15 points.

Walmart Gets Serious about E-Commerce

As the world’s largest retailer, Walmart has built thousands of brick-and-mortar stores in the United States, Mexico, and elsewhere. Although a success story when it comes to traditional retail locations, Walmart has struggled with its e-commerce efforts, with recent online sales accounting for about 3 percent of the company’s $300 billion in annual sales. Online sales started for Walmart started trending upward in 2020, and in 2021, the company held 7.2% of all online sales in the United States. The company has tried several different e-commerce strategies in the past, but none of them was an overwhelming success. Some company insiders objected to the pricing strategy used for online purchases; they were fearful that Walmart’s lower prices online would take customers (and sales) away from the retail locations.

Doug McMillon, Walmart’s CEO since 2014, believed a significant change was needed in the company’s e-commerce business, and he recently made changes in a big way. Over the past two years, Walmart spent billions to acquire several online companies to expand its e-commerce business in an effort to take a small bite out of retail giant Amazon’s success. In 2016, Walmart purchased Jet.com, an e-commerce site that sells a little bit of everything (books, clothing, electronics, etc.) at discount prices. Once the $3 billion acquisition was completed, Jet’s cofounder and CEO, Marc Lore, who now runs Walmart’s e-commerce platform, worked with McMillon to identify other established online companies to add to their e-commerce portfolio, and add they did.

First Walmart purchased footwear e-tailer ShoeBuy for $70 million in January 2017. The following month, Walmart bought outdoor specialty retailer Moosejaw for $51 million. Then in March, Walmart paid $75 million for ModCloth, an eclectic shopping site for women’s fashions. In 2017, Walmart purchased Bonobos, a hip fashion retailer geared to millennial males, for $310 million.

Reaction to the acquisitions has been mixed, depending on whom you ask. Retail analysts applaud the company’s radical move, pointing out that several well-known traditional retailers have closed their doors or filed bankruptcy because they failed to take part in the e-commerce revolution. Fashionistas, on the other hand, are lukewarm about the move. However, McMillon’s decision to allow the online retailers to operate independently may help retain loyal customers. The new e-commerce strategy may also lure typical in-store shoppers to take advantage of the expanded offerings available through both Walmart.com and Jet.com.

This group discussion addresses the following chapter outcomes, which cover:

• How do businesses and not-for-profit organizations help create our standard of living?

• What are the sectors of the business environment, and how do changes in them influence business decisions?

• What are the primary features of the world’s economic systems, and how are the three sectors of the U.S. economy linked?

• How do economic growth, full employment, price stability, and inflation indicate a nation’s economic health?

• What are the basic microeconomic concepts of demand and supply, and how do they establish prices?

• What are the four types of market structure?

• Which trends are reshaping the business, microeconomic, and macroeconomic environments and competitive arena?

Additionally, it addresses the following course goals:

• Demonstrate an understanding of the forces that shape the business and economic structure of the United States of America in a global marketplace and compare it to other economic systems.

• This group discussion activity is worth 15 points.
• The course discussion rubric is applied to this discussion

Note

This group discussion activity is additionally is located in the corresponding chapter of the course textbook. Accompanying the activity are sources related to this topic that students may wish to review.