Wal Mart Industry AnalysisEssay Preview: Wal Mart Industry AnalysisReport this essayBusiness PolicyWal-Mart CaseIndustry Analysis – Analyzing the Task EnvironmentAnalyzing important stakeholder groups such as suppliers and customers in a particularCorporations task environment.Short History of Wal-MartFounded by Sam Walton. He was in business since 1940 but in 1962 decided to focus on low price-high quality discounter. His personal charisma, simple upbringing and a dedication towards hard work has made his business a success. He found a right market niche, also the main focus was customer oriented and employees were made to feel part of the team and called “associates” to make them feel part of the company and give them the drive for success. Also there is a scheme where employees get shares in the company. This was later copied by such giants as Microsoft. Wal-mart is the largest and most profitable retailer in the USA.
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Wal Mart has no other company named after it. The Wal-Mart brand, while strong, can be weak and the reputation does not provide a foundation for its success. Wal-Mart is a national leader in reducing cost in this market, it has the highest revenues and the highest capital spending on inventory, to the extent even Wal-Mart has low profit margins. Wal-Mart has the highest base turnover in the history of Wal-Mart, up from 21% in 1940 only. Although Wal-Mart has been making products, Wal-Mart continues to invest in other businesses such as building stores, marketing and retail products and services and investing in other assets such as finance, real estate and real estate investments. It was in this way that Wal-Mart took the lead in creating this brand of retail and restaurant. Wal-Mart is the most successful local supermarket and also the most successful restaurant chain. Wal-Mart has a strong reputation that has the support of other multinationals including the European Union, United States. Wal-Mart offers a variety of local food and entertainment stores and is also a supplier to multiple Fortune 500 companies which has helped in many markets like China. There are many companies in Wal-Mart, from China to the United States and Europe, that are also the leading distributors of American food products. In the last two decades Wal-Mart has expanded into two different markets across different provinces. There are also many companies outside of this world that are located within Wal-Mart’s borders. It is worth noting that in this article we focus on different segments of the sales force. WalMart’s largest sales volume is mainly from its restaurants. The second largest volume is from its retail stores, retail stores of some 5,000 stores worldwide. Wal-Mart is the largest non-Wal-Mart food and beverage company in retail and restaurants worldwide, it has been in business for more than 100 years with sales at more than 90,000 restaurants. Other main exports are packaged products to China as well as to Japan and to the United States. Wal-Mart has also added 1 million retail locations to China in the last few years, we have added 40,000 small restaurants in China, 20,000 retail and 5,500 restaurants to India, Hong Kong and Singapore now in 2014. The main selling points or competitors of Wal-Mart from the beginning was the low prices. The company made many high quality products and services and also had a lot of innovative products built-in to its products. To this end, the company has launched a new technology called Wal-Mart Food Delivery System to help with the delivery of food to children and youth. This service is based on the idea that it is a way for children to eat more nutritious food. The company plans to expand this technology
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Wal Mart has no other company named after it. The Wal-Mart brand, while strong, can be weak and the reputation does not provide a foundation for its success. Wal-Mart is a national leader in reducing cost in this market, it has the highest revenues and the highest capital spending on inventory, to the extent even Wal-Mart has low profit margins. Wal-Mart has the highest base turnover in the history of Wal-Mart, up from 21% in 1940 only. Although Wal-Mart has been making products, Wal-Mart continues to invest in other businesses such as building stores, marketing and retail products and services and investing in other assets such as finance, real estate and real estate investments. It was in this way that Wal-Mart took the lead in creating this brand of retail and restaurant. Wal-Mart is the most successful local supermarket and also the most successful restaurant chain. Wal-Mart has a strong reputation that has the support of other multinationals including the European Union, United States. Wal-Mart offers a variety of local food and entertainment stores and is also a supplier to multiple Fortune 500 companies which has helped in many markets like China. There are many companies in Wal-Mart, from China to the United States and Europe, that are also the leading distributors of American food products. In the last two decades Wal-Mart has expanded into two different markets across different provinces. There are also many companies outside of this world that are located within Wal-Mart’s borders. It is worth noting that in this article we focus on different segments of the sales force. WalMart’s largest sales volume is mainly from its restaurants. The second largest volume is from its retail stores, retail stores of some 5,000 stores worldwide. Wal-Mart is the largest non-Wal-Mart food and beverage company in retail and restaurants worldwide, it has been in business for more than 100 years with sales at more than 90,000 restaurants. Other main exports are packaged products to China as well as to Japan and to the United States. Wal-Mart has also added 1 million retail locations to China in the last few years, we have added 40,000 small restaurants in China, 20,000 retail and 5,500 restaurants to India, Hong Kong and Singapore now in 2014. The main selling points or competitors of Wal-Mart from the beginning was the low prices. The company made many high quality products and services and also had a lot of innovative products built-in to its products. To this end, the company has launched a new technology called Wal-Mart Food Delivery System to help with the delivery of food to children and youth. This service is based on the idea that it is a way for children to eat more nutritious food. The company plans to expand this technology
2 Main Slogans of Corporate Strategy of Wal-MartCustomers will be provided with what they want, when they want it and all at valueTreat each other as we would hope to be treated , acknowledge our total dependence on Associate-partners (employees of the company) for our success.Forces Driving Industry CompetitionIndustry CompetitorsWal-Mart, Kmart, Khols Corporation, Sears, Woolworths, others.Rivalry among existing firmsNumber of competitors – Around 5 major players, medium threat of competition.Rate of Industry Growth – Slow business start, medium to high progressive growth up to 1980s, after that high growth due to various store formats, domination of the market, high employee motivation, clever business tactics.
Product and Service characteristics – High Service standards, employee participation scheme, employee motivation – making them run their departments as though their own business, escorting customers to their cars, distinctive blue uniform, wide aisles and varied assortment.
High Quality/Low Prices – high quality branded goods offered at low prices, money back guarantee to guarantee quality, different schemes such as American produced goods – supporting the local producer, Green Goods – goods that are environmentally friendly in production and are chemical free.
Wide Assortment – a customer can buy everything from jeans to dog food in one store.Amount of fixed costs – mark downs on titles were offered to attract destination shoppers to create store traffic.Capacity – High capacity, Wal-mart built huge warehouses for each area and then opened shops close proximity to it for quick distribution and to avoid out of stock.
Large volumes of goods sold helped keep prices down.Height of Exit Barriers – High exit barriers as Wal-mart was limited to retailing, but could diversify its operations within this framework .Potential EntrantsThreat of New Entrants:Sam Walton has been in retailing since 1940 and Wal-Mart has been in existence since 1962 and has had a low entry barrier, as at the time it was started by Sam Walton there were no developed retail chains, only small grocery stores and most of the competition was related to being in the right location such as a main street.
There is a low threat of new entrants in competition to Wall Mart as it is the biggest retailer in the USA and has much greater resources.BuyersBargaining Power of BuyersHigh bargaining power of Wal-mart due to large volumes.Wal-mart did not integrate backwards, it did not start producing its own goods, it was more profitable to buy them and there was too much of a variety.
Wal-mart had high bargaining power due to a large number of alternate suppliers, it could dictate its own terms to suppliers.Wal-mart used computerized processes from the 1980s like scanning data linked to the main computer, to see which products are high demand and need to be replenished often. A lot of low demand products were eliminated, thus discontinued to be purchased from suppliers.
SuppliersBargaining power of suppliersThe bargaining power of suppliers was low to non-existent. Wal-mart has a low price, consumer oriented strategy. Only the consumer matters. Wal-mart executives refuse to admit this fact but it is widely known that it uses intimidation tactics working directly with manufacturers and cutting out the supplier to keep costs to a minimum. Wal-mart is a tough negotiator and had its way due to the enormous volumes of products that they purchase for their stores in 55 states of the USA and accounting for more than 200 billion annual sales.
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