International business (Case Analysis- Wal-Mart) Contents How attractive was the discount retailing industry in the USA when Wal-Mart first began operations in the 1950s. 3 With reference to the key components of its Business Model, describe the sources of Wal-Mart’s competitive advantage in the USA…
Why was Wal-Mart unsuccessful in Germany, withdrawing in 2006, and relatively successful in the UK? 12 Reference 16 How attractive was the discount retailing industry in the USA when Wal-Mart first began operations in the 1950s. The US retail industry has considerably changed over the few decades due to two related trends, one being the discount retailing and second factor is the increasing prevalence of the large retail chains. The discounting retailing sector is controlled by chains. The concept is fairly new and the first discount store appeared in the 1950s. Discount retailing is one of the most dynamic sectors in the retail industry. Until 1990s two important retail chains were Wal-Mart and Kmart (Jia, 2007, p. 5). The retailing industry is known to be the second largest industry across the globe with respect to total number of establishment as well as total number of employees. The retail industry generates about $3.8trillion annually. The top five retail industry operating across the world are Wal-Mart, Target, Home Depot, Costco and Kroger. Wal-Mart apart from being the largest retailer globally is also the largest company and generates approximately $256billion sales annually. In discount retailing industry the two main competitors are Wal-Mart and Target. ...
With regards to Wal-Mart, suppliers who do not maintain or live up to the expectation of Wal-Mart point of system are thus replaced. Wal-Mart being a big brand and is powerful enough to make the suppliers recognise the fact and the situation when they do good business and thus can very conveniently switch suppliers at its convenience when they do not perform the work as expected. The suppliers also cannot afford to lose on the big brands, the key players and hence the supplier power tends to be low. As shown above the bargaining powers of customer are relative high as discount retail purchase can be substitutable and thus consumers has the power to go between the competitors depicting a high bargaining power. The switching cost involved in shifting from one competitor to another is also low and the consumers demand for high quality products at discount price. It is important to understand that consumer as individual does not have bargaining power with the retail stores but as a group consumers can demand a higher quality product at low price. Consumers are also price sensitive as a result the suppliers need to keep the price low to succeed indicating high customer power. Threat of new entrant is particularly low in the discount retailing industry as there exist a high barrier to enter the discounted retail industry with respect to investors, capital and competition. The huge capital required by a new entrant to compete with all the established retailers will take a longer time and establish them in the retail market. Although the switching cost is low for the consumers but brand loyalty towards a particular brand are relatively high and consumer would not like to shift towards a ...
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From the turn of the century until post-World War II, it was common practice for retailers to deny removal of merchandise from retailer shelves, instead providing in-house talent to assist customers directly at the store counter (Hesterly 2008). The expense of providing top quality, customised customer service was no longer worth the return on investment for human capital development and training as department stores began to emerge in the 1950s, representing an abundance of new competitive threats.
269 – 272). Since the establishment of small retail store outlets in isolated areas made it easier on the part of Wal-Mart’s target consumers to purchase consumer products without having the need to travel to far-away places, Wal-Mart as a brand has created a positive image which made the company gain the loyalty of its existing consumers (Taub, 1986, p.
There must be an environment that the organization operates in. The business organization contains both internal and external factors that affect the day to day running of organizational activities. The external environment consists of customers, competitors, technology, laws, regulations and resources.
In the age on increased business competition, it has become very vital to ensure organizational efficiency. One such example can be found in the business strategies of Wal-Mart. Wal-Mart is the global retailer in the retail industry and has a niche for itself in the market. The history of this company can be traced to the year 1962.
Besides, uncovering the reasons behind the popularity and prominence of Wal-Mart as a customer-oriented super-shop has also taken a significant place in the present study. The study also attempts to erect an entire organogram of Wal-Mart concerning its transaction process dealt between the Stakeholders in the Wal-Mart business Shareholders, Suppliers, Distributors, Dealers, transportation, Bankers, Advertising/Marketing/Market research agencies and impact upon them arising out of its business.
It shows the percentage of a company's equity that has been financed by external debts. The debt-to-equity ratio for Wal-Mart has been calculated as:
In the Weighted Average Cost of Capital (WACC) involves the calculation of separate items in the capital employed and then weighting the cost of each element by its proportion of the total capital employed.
The organization initiated its activities in the year 1962 by opening its first shop in Arkansas. Years later, the organization developed into Wal-Mart stores; opening the first supply center and home administration center at Bentonville. The organization launched the first super center in 1988 whilst initiating the first global unit in Mexico.
Wal-Mart Stores, Inc. is an American multinational retail corporation that operates the warehouse and departmental stores. The company was founded in 1962 and has its headquarters in Bentonville, Arkansas, US. Since its inception, the company has grown by leaps and bounds.
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