Wednesday, July 03, 2019
Expensive
Walmart is learning that taking on Amazon is expensive. It is set to lose a billion dollars this year as it grows its online business. This has apparently ignited tensions inside the company as executives jockey for power. Walmart might be forgetting that Amazon itself lost billions as it built market share. There was a point when financial analysts were asking if Bezos could pull it off. Even when the company turned the corner, its profits were small as Bezos kept diverting funds for other growth prospects. Walmart might be facing the same road to gaining online presence, and it is a question of how long the company can accept the bleeding. The company might not be used to this kind of profitless growth. One shouldn't be surprised if Walmart cuts back on its online effort, which would be a PR blow.
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