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Walmart Essay

739 words - 3 pages

Mission:To provide everyday low-prices on their products as well as a customer friendly store environment with a strong emphasis on customer satisfaction.Objectives:To grow at double digit rates for the foreseeable future and propel Wal-Mart's revenues past $500billion by 2010.Current StrategyPorter's Generic Competitive StrategiesCompetitive Advantage*Wal-Mart was widely seen by consumers by being the lowest priced general merchandise retailer in the market. Prices of its grocery items were 8-27% below other leading supermarkets.Competitive ScopeWal-Mart has a broad targetCorporate StrategyExpansion/Retrenchment*Wal-Mart's domestic geographic strategy was the manner in which it expanded outward into new geographic areas. Wal-Mart always expanded into adjoining geographic areas, saturating each area with stores before moving into new territory.*Wal-Mart also derives cost savings through sharing activities with their suppliers. They work closely with their vendors to find mutually beneficial ways to squeeze costs out of the supply chain. Suppliers operation is scrutinized to find ways on how to reduce cost without sacrificing quality. Wal-Mart also offers to supply data that would be useful and prove to be beneficial to its suppliers.*Wal-Mart's strategy also includes creating value through related diversification with the use of poled negotiating power. Wal-Mart's huge market share gives them the advantage to negotiate with its supplier to get their bottom price yet still height enough to allow suppliers to earn profit.*Acquisition of general merchandise or supermarket chains had been a part of Wal-Mart's expansion strategy on the international market.Industry Analysis (5 forces)Risk of New Entry*In order to reduce the risk in entering the discount retailing industry, companies had to compete in terms of pricing, store location, merchandise mix, and store size. New companies also have to start from scratch in building its image with prospective shoppers.*Wal-Mart uses acquisition to reduce barriers to entering markets. Wal-Mart acquired general merchandise or supermarket chains to enter international market such as Canada, Mexico, Brazil, Japan, Puerto Rico, China, and Great Britain.*In terms of absolute cost advantage, Wal-Mart uses superior production techniques in testing and experimenting new merchandises.Rivalry among Established Firms*One of the factors that affect the intensity of rivalry among firms is its competitive structure in terms of the market share of any company. Firms constantly strive to acquire a large market share to maintain or increase their...

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