Walmart And Microsoft Should Merge To Stop Amazon, Cramer Says

Jim Cramer, a stocks analyst and a television personality has suggested that the only entity capable of defeating Amazon was one resulting from a merger between Walmart and Microsoft. According to Cramer the two companies enjoy distinct advantages individually which would be a game changer if the duo merged.

In the case of Walmart it has a huge customer base. Every week in the United States, one hundred million people do their shopping at Walmart. With the number of Walmart stores being 5,000 in the world’s biggest economy, it means that on average there is a store that is just a few minutes away from just about every household in America. The Arkansas-based retailer also has a decent online presence and has made a couple of ecommerce acquisitions including Jet.com.

Online services business

What Walmart lacks, however, is an online services business which if the merger were to happen would be provided by Microsoft Azure. Currently, Azure is growing fast and though it has been a distant second to Amazon Web Services, it is now a serious threat to the dominance of Amazon in the provision of cloud services.

Amazon has used its technology to mine data with a view to learning the tastes, preferences and habits of its customers in order to entice them to spend more. While Walmart currently lacks this a merger with Microsoft would enable it get its hands on the artificial intelligence technology it needs. With the artificial intelligence technology, Walmart would the mine the data it possesses from the 100 million people who shop at its outlets every week. This exceeds what Amazon currently has by far.

Distribution outlets

Another advantage that the resulting entity would have over Amazon is the huge number of stores that Walmart owns. These stores which also happen to have huge parking lots are a good candidate for food distribution.

With regards to electronic merchandise all that Walmart needs now is a geek squad. Walmart would also have an advantage over Amazon in that it can negotiate for better prices due to the clout it has.

But before such a merger can happen, there would be some hurdles to overcome. First it is hard to see where the incentive for either company in a merger as both Microsoft and Walmart are doing well on their own. The biggest hurdle though is getting regulatory approval for such a merger considering the sizes of both Amazon and Microsoft.

 

No Comments

    Leave a reply