Porters
Degree of Rivalry - Stacy In the retail world, there will always be a high level of competitive rivalry, mostly because there are a high number and variety of firms. Retailers, such as, Target, Kmart, Shopko, Carrefour, and Best Buy are all competing in a similar retail environment and must all remain highly competitive to survive. Walmart has the competitive advantage in the retail industry and they must create new strategies and sustainability to remain number one. Keeping prices low and having thin profit margins are Walmart’s secret to being successful in the competitive area. Economies of scale helps Walmart tremendously because they can deliver their goods and services at a lower cost compared to their competitors. Because of how big their stores are and how many locations they have, this gives the company a huge advantage in bargaining prices with suppliers. This also gives them the ability to get their products for cheaper prices compared to a smaller business and have inexpensive distribution. In addition, they have a lot of information regarding what their customers like and dislike so it can spread their best practices across the entire store base. Walmart has a bakery, deli, and dairy area where products are highly perishable. Also, …show more content…
There are lots of suppliers in the retail industry and large firms like Walmart can affect these suppliers. Since there is a limited amount of space in retail stores, and since a lot of suppliers want to be inside Walmart stores, there’s not really a need for anymore suppliers. There’s even more competition at Walmart stores dealing with suppliers because Walmart has their own supplier and brand name called Great Value. Walmart also has a pretty strict procedure new suppliers need to follow in order to enter. They must fill out a form and meet standards, have certain insurance regulations, and follow food safety
Degree of Rivalry - Stacy In the retail world, there will always be a high level of competitive rivalry, mostly because there are a high number and variety of firms. Retailers, such as, Target, Kmart, Shopko, Carrefour, and Best Buy are all competing in a similar retail environment and must all remain highly competitive to survive. Walmart has the competitive advantage in the retail industry and they must create new strategies and sustainability to remain number one. Keeping prices low and having thin profit margins are Walmart’s secret to being successful in the competitive area. Economies of scale helps Walmart tremendously because they can deliver their goods and services at a lower cost compared to their competitors. Because of how big their stores are and how many locations they have, this gives the company a huge advantage in bargaining prices with suppliers. This also gives them the ability to get their products for cheaper prices compared to a smaller business and have inexpensive distribution. In addition, they have a lot of information regarding what their customers like and dislike so it can spread their best practices across the entire store base. Walmart has a bakery, deli, and dairy area where products are highly perishable. Also, …show more content…
There are lots of suppliers in the retail industry and large firms like Walmart can affect these suppliers. Since there is a limited amount of space in retail stores, and since a lot of suppliers want to be inside Walmart stores, there’s not really a need for anymore suppliers. There’s even more competition at Walmart stores dealing with suppliers because Walmart has their own supplier and brand name called Great Value. Walmart also has a pretty strict procedure new suppliers need to follow in order to enter. They must fill out a form and meet standards, have certain insurance regulations, and follow food safety