Walmart Case

1537 Words7 Pages
Walmart case 1. To what extent is Wal­Mart’s performance attributable to industry attractiveness and to what extent to competitive advantage? Wal­Mart´s performance is not attributable to industry attractiveness due to the high internal rivalry within the retail sector. Such rivalry results in margin compression and lower growth for Wal­Mart. By using Porter's 5 forces, we see that supplier power for Wal­Mart is weak because many of Wal­Mart's suppliers are consumer product companies. These companies are commodity companies since their product has little differentiation. As a result, they have little bargaining power against retailers with large market share…show more content…
Internar rivalry Industry competitors: Target, Kmart, T.J Maxx, Costco and more Whole foods, best by­ more service orientated. ­ Highly competitive industry with firms competing on all levels. ­ Industry concentration ­ Differentiation: services, branding, marketing ­ Economies of scope and scale. ­ Industry concentration: Low ­ zero sum game Threats to entry ­ High capital requirements ­ Economies of scale. ­ Advertising ­ Link with suppliers Larger companies that possess the capital requirements can invest in a chain. Smaller independent stores: target niche customer group. (Moderate threat) Supplier power ­ Strong buying power of Walmart. ­ Centralised purchasing. ­ Excessive requirements. ­ Forward integration: own brand products. ­ Suppliers offering wide variety of products possess greater bargaining power. ­ Backwards vertical integration. Buyer power ­ Buyers individually have low bargaining power ­ As a whole they are potentially very powerful due to: a) ease of switching b) Lack of differentiation among discount retailer Threat of substitutes ­ Walmart owns different substitutes in the discount retail market such as Sam's warehouse club, Neighborhood markets and supercentres. ­ Treat from online sellers. ­ Threat from non­food products. 2. In which of Wal­Mart’s principal functions and activities (namely:

More about Walmart Case

Open Document