Wal-Mart Aims for Amazon's Achilles Heel

Amazon.com (NASDAQ: AMZN) has done a lot of things exceptionally well over its 22-year history. The company's whopping market value and constant growth are testaments to its strategy of customer obsession, breakneck innovation, and its "Day 1" philosophy.

But of all the strategic decisions the company has made in its history, none has had a bigger impact than Prime. Launched in 2005, the all-inclusive loyalty program offers members free video streaming, access to the Kindle Lending Library, music streaming, and several other ancillary benefits from $99/year. But the biggest one is clearly free, two-day shipping on millions of items.

With Prime, Amazon solved the two biggest obstacles to online shopping: it eliminated pesky shipping fees and long delivery times, which were often a week or longer in the early days of e-commerce. Over the years, Amazon has stuffed Prime with more and more benefits, making it a nexus of competitive advantages that no other company, retailer or otherwise, can match.

Source: Fool.com