1. Introduction

The global economy's growing interconnection has increased financial market volatility in recent years, posing challenges for companies worldwide. Supply chain management is significantly impacted by financial swings, brought on by factors like economic downturns, geopolitical unrest, and speculative activity. Businesses frequently face increased uncertainty, making forecasting demand and costs challenging. During periods of financial instability, securing funding becomes difficult, disrupting production schedules and complicating inventory management. Fluctuations in exchange rates and commodity prices directly influence procurement strategies and supply chain costs. Consequently, supply chain managers must strike a balance between stability and adaptability.

Understanding how financial market volatility impacts supply chain decisions is essential for organizations. By examining how businesses adjust their procurement and risk management practices in response to market instability, companies can better navigate these challenges and sustain operations.

The relationship between financial market volatility and supply chain management decisions has garnered substantial attention. Financial fluctuations, such as changes in exchange rates, inflation, and recessions, have a marked impact on procurement, inventory management, and risk mitigation processes. Firms must adapt strategies to maintain operational stability.

Baghersad and Zobel highlighted the significant effects that supply chain disruptions have on firms, especially during periods of financial volatility. Their empirical study demonstrates how supply chain disruptions can lead to higher operational costs and strained relationships with suppliers, thus emphasizing the importance of resilient strategies [1]. Similarly, Bayles discussed the logistics and fulfillment challenges e-commerce businesses face, particularly in uncertain financial environments, underscoring how these disruptions affect customer satisfaction and operational efficiency [2].

Borgman and Rachan provided insight into how risk management in supply chains can mitigate the adverse effects of financial market fluctuations. Their research emphasizes the integration of risk management strategies into supply chain operations to buffer against such volatility [3]. Chowdhury and Quaddus expanded on this idea by investigating how firms can improve their readiness, response, and recovery during periods of economic uncertainty, suggesting that resilient supply chains are built on proactive strategies [4].

Hohenstein et al. contributed to the discussion by defining the concept of supply chain resilience and exploring its application across industries, while Jüttner and Maklan applied this concept to the global financial crisis, showing that resilient firms are better equipped to withstand the disruptions caused by financial volatility [5,6]. McGee provided an example of resilience in the retail sector, specifically focusing on Walmart, which, through its operational scale, has demonstrated the ability to manage fluctuations in supply chain performance during financial market turbulence [7]. Rathi analyzed consumer behavior in multichannel retailing, finding that fluctuations in market conditions impact consumer expectations and, consequently, supply chain strategies in companies like Walmart and Amazon [8].

Selvaraj and Raman discussed how supply chain traceability enhances risk management by providing better transparency during market fluctuations, allowing firms to react swiftly to disruptions [9]. Verhoef et al. investigated the role of digital transformation in enhancing supply chain resilience, noting that technologies such as AI and blockchain are key to improving supply chain efficiency and risk management in volatile financial markets [10].

All in all, while significant progress has been made in understanding how financial market volatility impacts supply chain management, there remains a need for additional exploration into industry-specific strategies that could effectively tackle these issues. Ongoing studies ought to focus efforts toward exploring how particular market factors, like fluctuations in exchange rates or changes in commodity prices, interact with and shape supply chain decisions.

2. Differences in online retail models

E-commerce's explosive growth has fundamentally transformed retail, supplementing or replacing traditional physical stores with online platforms enabling anytime, anywhere shopping. This shift significantly impacts companies like Walmart and Amazon with different retail models.

2.1. Walmart and Amazon

Walmart uses a multi-channel strategy, integrating online and offline channels to offer both online purchasing and in-store pickup. This allows customers to shop online and pick up products at physical stores. Walmart's optimized supply chain and logistics have helped it remain competitive in the digital space [7].

In contrast, Amazon has built its dominance on a purely digital platform, leveraging cloud computing and AI to enhance its operational efficiency. The company's vast inventory, paired with an innovative fulfillment and logistics network, has set a new standard in e-commerce [2]. Amazon's ability to provide quick and reliable delivery to customers worldwide has been a critical factor in its success, especially during financial instability when consumer demand becomes unpredictable [8].

2.2. Traditional retail vs. online retail models

Amazon's online transaction model allows customers to review purchases and ship goods online, eliminating barriers related to physical location and working hours, and has significant advantages in terms of convenience. The range of products in online markets is also wider and is not limited by the volume of shelves, and online retail costs are lower than traditional retailers. The traditional retail model, which is based on personal communication and is centuries old, typically operates in brick-and-mortar stores where customers can touch and inspect the goods. The company can provide personalized services.

2.3. Advantages and challenges of online retail

The e-commerce model has obvious advantages in terms of convenience. Consumers can inspect goods and conduct transactions at any time without leaving the house, which saves them from having to shop in person at brick and mortar stores.In addition, digital sellers often have a variety of stocks of goods that are enough to meet the needs of customers around the world. Amazon's vast product inventory, accessible to a global customer base, confers a distinctive competitive edge over conventional brick-and-mortar retailers, although the e-commerce model is not devoid of challenges, particularly in the realm of delivery logistics. Providing efficient, reliable, and cost-effective delivery solutions, especially for international customers, requires substantial capital allocation toward both physical infrastructure and cutting-edge technological systems. Furthermore, e-commerce platforms encounter the critical challenge of managing extensive volumes of consumer data, underscoring the necessity for robust cybersecurity frameworks to ensure the protection of sensitive information.

3. Financial market volatility's impact on Walmart and Amazon

Financial market volatility profoundly impacts supply chain strategies, forcing Walmart and Amazon to adapt procurement strategies, refine inventory systems, and enhance risk mitigation practices in response to fluctuating financial conditions. Both companies have navigated market instability by leveraging their business strengths, despite operating under different retail models. Financial instability affects supply chain continuity, causing disruptions and impacting the responsiveness to shifting demand patterns.

Table 1 shows the financial data and key metrics for Walmart and Amazon for the years 2020 and 2021. All data related to the inventory turnover, debt-to-equity ratio, and stock price performance have been provided based on public financial reports.

3.1. Financial volatility and its influence on supply chain management

Financial instability is reflected in changes in financial markets, and large retailers such as Walmart and Amazon are experiencing this deeply.Such fluctuations can rapidly change consumer demand, costs, and financial stability, as well as have a significant impact on corporate performance and decision-making.

The coefficient of supply turnover is an important indicator that is most susceptible to such fluctuations. It reflects the frequency of selling and renewing a company's stock over certain periods of time to reflect the efficiency of stock management.High volatility in financial markets can lead to excessive stock accumulation due to unpredictable fluctuations in demand or to situations where suppliers cannot meet demand. This can lead to additional obstacles in the supply chain.

Walmart's supply turnover ratio fell from 9.4 in 2020.at 8.46 in 2021. This change indicates that the movement of supplies may be slowing down. Supply chain failures or insufficient response efficiency to financial fluctuations may be some of the influencing factors.Although Amazon is in similar market conditions, its stock turnover rate is relatively stable and has only dropped slightly from 10.54 in 2020.at 9.66 in 2021. years, which is a minor decline.

This difference may indicate the different strategies these companies apply under conditions of financial wobbling.Walmart's relatively low level of supply turnover may indicate problems in managing the global supply chain, which is especially evident in times of financial uncertainty; Amazon relies on technological logistics and manufacturing infrastructure to maintain a high level of supply turnover. The company has demonstrated a greater ability to maintain a high level of stock turnover.

3.2. Walmart’s response to financial volatility

As the world's largest retail company, Walmart is extremely vulnerable to market fluctuations, especially when it comes to inventory management.Decrease in stock turnover seen between 2020.and 2021. it may reflect a company's strategic direction to overcome financial fluctuations and market uncertainties.Walmart's consistent strategy aims to maintain a high level of inventory to meet consumer demand, but when financial risks often arise, factors such as high operating costs and abrupt disruptions in the global supply chain can pose significant obstacles to effective inventory management.This sign shows that in the cycle of economic fluctuations companies not only need to flexibly balance the proportions of investment in stocks, they already need to pay attention to efficient integration and distribution of supply and demand to ensure a smooth transition to solving complex managerial challenges.

A turnover rate of 9.4 to 8.46 may indicate that Walmart has become more dependent on a "just-in-case"stock management model.When uncertainty over the shortage of goods in stock, caused by supply chain dynamics or changes in consumer demand, increases, a higher stock level can be maintained.This phenomenon is often observed during periods of financial instability. At this point companies may keep more stock to reduce the risk of interruption, but this situation is often accompanied by longer storage periods and increased stock costs. It is not surprising that problems such as inefficiency lead to an increase in the cost of supplies.

3.3. Amazon’s strategy in response to financial market volatility

Amazon’s relatively smaller decline in inventory turnover (from 10.54 to 9.66) indicates that the company may have been better positioned to navigate the effects of financial market volatility. Amazon's business model, heavily reliant on technology and automation, allows for a more agile and responsive supply chain. With sophisticated forecasting and real-time data analysis, Amazon can better manage inventory, thus reducing the impact of financial volatility.

Moreover, Amazon's diversified supply chain, which integrates third-party sellers and direct fulfillment, gives it more flexibility in responding to market shifts. This flexibility might explain why Amazon’s inventory turnover remained strong despite global economic disruptions. Furthermore, the company's ability to quickly scale or scale back operations allows it to adapt to changing financial conditions, which helps maintain a relatively stable inventory turnover rate compared to Walmart.

3.4. Comparative analysis of Walmart and Amazon

Comparing Walmart and Amazon's response to financial fluctuations, one can examine the different effects of their business models and strategic methods of supply chain management amid market volatility.This type of comparative analysis helps to gain a deeper insight into the impact of differences between them.

Stock turnover: Walmart's stock turnover ratio fell from 9.4 to 8.46, while Amazon only dropped from 10.54 to 9.66. This change shows that Walmart may face a more serious dilemma in maintaining ideal supply efficiency.Reducing the level of a company's stock turnover means that it is necessary to improve the efficiency of the supply chain or that the company has made a strategic decision to overload its stock in order to combat uncertainties in the market.

Gross margin: Amazon's gross margin is much higher than Walmart, reaching 40.20% in 2020.year and increasing to 40.30% in 2021. year; while Walmart remained at 24.10% and 24.30% in the same period.This high gross profit margin indicates that Amazon can more accurately control its cost structure and pricing strategy, thereby reducing the risk of shocks in its financial position that will affect its profitability and supply chain management.

Capital ratio: Amazon's asset-liability ratio reached 80% in 2020.year, but fell to 54% in 2021. years. These data indicate the company's shift to a more financially conservative strategy.By contrast, Walmart's asset-liability ratio fell slightly from 73% in 2020.at 62% in 2021. years, showing a relatively stable trend.Amid market turbulence, Amazon can build its strategic supply chain more flexibly or make more targeted adjustments thanks to its own financial strength.

4. The root causes of financial market volatility’s impact on supply chain management decisions

4.1. The role of exchange rate fluctuations

In times of economic instability, companies such as Walmart and Amazon must take into account an important factor of currency fluctuations that have a direct impact on the cost of international purchases, especially when buying goods in foreign markets.For example, in the case of a devaluation of the U.S. dollar against other currencies, companies operating globally may face an increase in the value of imported goods, which in turn prompts them to make strategic adjustments to the volume of procurement, such as negotiating contracts with suppliers or changing procurement centers to alleviate financial turmoil.For Amazon, given its global structure and vast product range, currency fluctuations require an urgent adjustment of price models to maintain competitiveness and maintain yield rates.

4.2. Technological advancements as a buffer against volatility

Technological innovations play a pivotal role in mitigating the effects of financial market volatility. The digitalization of supply chain processes—such as real-time data analytics, demand forecasting, and automated inventory management—helps companies better respond to the unpredictability of the financial landscape. By utilizing advanced algorithms and artificial intelligence, retailers like Amazon can continuously monitor market conditions and adjust inventory strategies in real time. This technological capability allows for greater flexibility in meeting demand spikes or curbing excess stock, effectively stabilizing supply chains during periods of volatility.

5. Forward-looking strategies: future directions for retailers in the era of financial volatility

As the retail industry continues to adapt to the evolving global financial landscape, companies must invest in forward-thinking strategies that build resilience and minimize the risks posed by financial market volatility. Both Walmart and Amazon provide useful case studies for smaller retailers aiming to navigate these challenges effectively.

5.1. Building strategic supplier relationships and diversifying sourcing options

Diversifying suppliers and sourcing regions is crucial for mitigating supply chain disruption risks stemming from geopolitical tensions or market fluctuations, with both Walmart and Amazon strategically fostering robust supplier relationships to enhance their bargaining power during periods of market instability. Furthermore, the implementation of multi-sourcing strategies, which involve procurement from diverse regions and suppliers, effectively reduces dependency on a singular source, thereby alleviating risks linked to regional disruptions.

Retailers can mitigate volatility by securing long-term supplier contracts, which ensure price stability and shield against abrupt market fluctuations, while fostering adaptable yet robust supplier relationships to effectively navigate future uncertainties.

5.2. Enhancing inventory flexibility with just-in-time and just-in-case models

One of the central debates in supply chain strategy is whether to adopt a just-in-time (JIT) or just-in-case (JIC) inventory model. JIT inventory systems, which focus on keeping stock levels low and replenishing supplies only when needed, minimize holding costs but can be risky in volatile environments. On the other hand, JIC models involve maintaining higher levels of inventory as a safeguard against supply chain disruptions.

Both Walmart and Amazon demonstrate how businesses can balance these models. Walmart, with its massive global network, often utilizes a more conservative JIC approach, especially in times of financial uncertainty, to avoid stockouts. Amazon, however, with its strong data analytics capabilities, blends JIT practices with real-time supply chain monitoring to optimize its inventory without overstocking. Retailers should tailor their inventory models based on the specific needs of their business and the market conditions they face.

5.3. Future focus: sustainability and ethical supply chains

Looking toward the future, retailers must also embrace sustainability as part of their risk management strategy. Financial market volatility can be exacerbated by environmental crises and resource scarcity. Companies that are proactive in creating sustainable, ethical supply chains will not only improve their resilience but will also meet the growing demands of environmentally conscious consumers. Implementing green practices such as energy-efficient logistics, sustainable sourcing, and reducing carbon footprints will become increasingly important in maintaining long-term supply chain stability.

6. Conclusion

This study examined the impact of financial market volatility on supply chain management decisions, with a focus on Walmart and Amazon. The findings highlight that both companies have successfully navigated financial instability by leveraging their distinct business models. Walmart’s multi-channel strategy and Amazon’s technology-driven supply chain have allowed them to adapt procurement strategies, optimize inventory management, and enhance risk mitigation practices during periods of financial uncertainty. The main takeaway from this study is that financial market volatility significantly affects supply chain operations, particularly in inventory turnover and procurement strategies. Walmart's slightly reduced inventory turnover in 2021 suggests challenges in managing supply chains during volatility, while Amazon’s stable turnover underscores the importance of technology in maintaining efficient operations. Additionally, both companies emphasize the value of strong supplier relationships and technological integration to remain resilient. Looking ahead, businesses should focus on integrating advanced technologies and balancing inventory models to improve flexibility. The study also points to the growing importance of sustainability in supply chain strategies to mitigate future risks. Ultimately, this research provides valuable insights for companies seeking to strengthen their supply chain resilience in response to fluctuating market conditions.