Wal-Mart - Case Study - Student Number and Number Name of Professor Number of Words: 3,285 Q.1 How attractive was the discount retailing industry in the USA when Wal-Mart first began operations in the 1950s. In 1950s, Wal-Mart started its grocery retailing business in rural and small towns particularly in Arkansas, Rogers, and Walton (Scholasticus, 2011; Gross, 1997, pp…
30). To determine how attractive the discount retailing industry in the United States when Wal-Mart started its business operations back in 1950, Porter’s five forces framework will be used in analyzing external business environment. Porter’s Five Forces Analysis Framework Barriers to Entry and Industry Competitors Specifically the low capital requirement in establishing small- and medium-scale grocery retailing business tightens the market competition within the grocery retailing industry in rural and small town areas. Using the Porter’s five forces framework, the threat of entry is high since anyone can easily establish small- and medium-scale supermarket retailing store outlets throughout the different geographic areas in the United States. In order to gain competitive advantage as compared to small- and medium-scale grocery retailers in US, Wal-Mart decided to continuously expand the number of its existing retail store outlets in Arkansas, Rogers, and other parts of the United States (Scholasticus, 2011; Gross, 1997, pp. 269 – 272). ...
Bargaining Power over Suppliers As the number of Wal-Mart discount retail store outlets in the United States increases, the volume of food and non-food supply requirements also increases. It is the ability of Wal-Mart to order food and non-food consumer items by bulk makes the retailing store outlet’s bargaining power over its accredited suppliers high. Since Wal-Mart’s demand for food and non-food supplies is continuously increasing, the company has been exerting effort in locating local American manufacturers of food and non-food items that are willing to supply consumer products to all Wall-Mart discount retailing stores at the lowest possible price (Ungson and Wong, 2008, p. 164; Taub, 1986, pp. 30 – 31). Bargaining Power over Buyers Wal-Mart is selling homogenous food and non-food products. It means that any small- or medium-scale grocery retailing stores can easily sell the same commodities that Wal-Mart is selling. This makes Wal-Mart’s bargaining power over its buyers relatively low. Selling homogenous products at a higher selling price as compared to other sellers would make price-sensitive consumers decide to purchase their grocery items from other grocery stores that sell cheaper consumer products. Upon analyzing the case of Wal-Mart, it is clear that Wal-Mart is not in the position to dictate the selling price of its basic consumer products. Threats of Product Substitution Any person can easily establish their own grocery retailing business. Having in mind that the threat for food and non-food product substitution is high, the target buyers of Wal-Mart have the power to simply decide on purchasing its preferred grocery items from other nearby grocery stores. Discussion Back in ...
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6 How sustainable is Wal-Mart’s competitive advantage in discount retailing in the USA 9 With reference to Dunning’s Eclectic Paradigm of foreign direct Investment (FDI), compare and contrast Wal-Mart’s entry into the German market in 1997 with its subsequent entry into the UK market in 1999.
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.
Wal-Mart started its international operation by entering the emerging markets. Its approach to emerging markets illustrates a link between globalization of markets and competitive strategy. Strategic management helps to understand and define the goals, vision, mission, objectives, roles, and responsibilities of the organization.
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.