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Stategic Management in Wal Mart - Case Study Example
The discount retailing industry was an attractive prospect for any new company with new ideas that wished to enter it during the 1950's. The model for discounting existed, but was ripe for perfection and development by the right company. That was Wal-Mart.
The basic model for Wal-Mart had thus been created.
There were a number of competitors for Wal-Mart however, companies such as Mammoth Mart, WT Grant and Woolco were already successful within the field, but through Walton's business expertise, luck and vision they eventually fell to the competition that Wal-Mart offered them. Porter's Five Force Model is a useful tool for analyzing what Wal-Mart faced as it began to move into competition with much larger retailers during the 1950's and 1960's. Thus the overall category of "rivalry" was based upon a combination of a number of forces, including supplier power, threat of substitutes, buyer power and barriers to entry.
These forces were fairly fluid and easy to negotiate if Wal-Mart came up against them because the sector was fairly new and still in the process of bring molded into more rigid characteristics. Thus Sam Walton was able to create his own supplier relationships in the first few decades of the company through adapting the existing model to his own ends. Wal-Mart was able to create its highly one-sided supplier relationships through the fact that it became the largest potential market for such suppliers.
There were no barriers to entry for Wal-Mart because Walton chose to locate many stores in areas that other retailers normally avoided. ...