Competitive Analysis of Walmart.

Porter five forces analysis Strategic management Retail

Factors Affecting formulation of the Corporate Strategy

I. Dominant Economic Features

A. Market Size

Businesses in the discount retail industry can earn annual sales as high as $200B up to a low of $7B.

B. Scope of Competitive Rivalry

Generally, there are two sets of competitors for Wal-Mart. Regional discount retailers such as roses, Howard's and Duckwall-ALCO. These companies will be forced into a massive marketing revolution with the entry of Wal-Mart to their region.

Also, Wal-Mart has competitors in a national basis. These retailers could be identified as K-Mart, Sears, Kohl's and Target. Wal-Mart also has located itself in the international scene with acquisitions of local companies. This could be considered as a means of fortifying their position, making it outside the United States before competitors can cope with it.

C. Market Growth and position in the product line

For the year 2000-2001, the Wal-Mart and their national competitors had gains ranging from 0.1% to a high of 22% increase in sales.

The products being marketed are mostly in the mature stage because the items are necessities. Therefore, a constant innovation in marketing techniques such as pricing and promotions should be done to gain a competitive advantage over rivals.

D. Number of companies in the industry

There are 4 major competitors in the retail industry.

Sears, Roebuck and Company - not a discount store targeting middle-market customers. Focus strategy of product lines on apparel, automotive and home materials.

K-Mart- retail and discount combination, similar to Wal-Mart minus the marketing strength. Its track record has been negative

Target

Kohl's

Number of stores ranges from 4,414 stores (Wal-Mart), to 382 stores (Kohl's). This number shows the ability of Wal-Mart to expand into others states, making their number a strength of the company. For a competitor, number is not always the issue. Management skills, low prices and adherence to...
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