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We focused on online retail and services this week. Why were so many entrepreneurs initially drawn to start businesses in the online retail sector?

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https://brainmass.com/business/entrepreneurial-issues/online-retail-558996

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This took place for a few different reasons. The main reason was due to ease. Entrepreneurs saw that with an internet connection, minimal equipment, and a few additional resources, the business could be 'up and running' in a short amount of time, when compared to attempting the same type of business through a traditional brick and mortar location. With the internet, businesses of all different sizes and types find it easier when compared with traditional means, in the majority of cases. Another reason is due to cost. ...

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This solution explains why entrepreneurs are originally drawn to start businesses in the online sector.

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Porter's five forces competitive framework - Online Retail Industry

Abstract

Walmart.comâ??s sales are less than a fifth of Amazon.com, but a new division, @WalmartLabs, is experimenting with social media and mobile apps. Since Wal-Mart Stores first ventured into cyberspace 15 years ago, the Bentonville, Ark., company has struggled online. Early on, Walmart.com featured a clunky digital version of the greeter who welcomes shoppers at each store. Walmart.com still doesn't excel at features that are commonplace on other major e-commerce sites, such as personalization and recommendations.

The company doesn't disclose its online sales, but analysts say Walmart.com does about $6 billion a year in business, less than 2 percent of total sales and well below Amazon.com's $34 billion in 2010 retail revenue. For a long time, Wal-Mart's poor online performance didn't much matter. The retailer built hundreds of Supercenters every year in the late 1990s, and profits soared. Over the past two years, however, the company has cut its new U.S. store development by half. Sales at domestic Wal-Marts open for at least a year have declined in each of the last eight quarters. Over that time e-commerce has exploded, even among the lower-income households that are Wal-Mart's core customers.

Chief Executive Officer Mike Duke has recently focused his company's considerable firepower (and an $11 billion cash hoard) on improving its use of the Web. He bought a Chinese online merchant, is testing home delivery of fresh groceries ordered online in San Jose, and most significantly, has created @WalmartLabs. Run by Silicon Valley veterans Venky Harinarayan and Anand Rajaraman, the division is charged with bringing Wal-Mart up to speed with innovations such as smartphone payment technology, mobile shopping applications, and Twitter-influenced product selection for stores. Itâ??s an ambitious attempt at a technological makeover, but still might not be enough. One goal of @WalmartLabs is to use social media and mobile apps to get shoppers to spend more at Wal-Mart's physical stores. One-third of Wal-Mart customers own a smartphone, and the company is investing in tools for them. The plans for increasing online sales are more vague. The @WalmartLabs division is testing an app that allows Facebook users to give gifts without ever clicking away from the social network.

Based on the above abstract from the article, Wal-Mart's Rocky Path from Bricks to Clicks, how to apply the porter's five competitive forces framework to the online retail industry? Using the Resource Based View of the firm framework, discuss Wal-mart's online strategy? From the perspective of Competitive Advantage framework, what is Wal-mart's online strategy?

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