Walmart is by far large the leader in the market, with a strong market capitalization of the 232,520. However, there are strong competitors such as Costco Wholesale, Target Corp, Dollar General Corp, Dollar Tree who have over 20,000 million in market capitalization. The business of supply chains and logistics changes a lot because there are new brands being invented from mergers. Also, the business lacks constant customer loyalty. Another challenge is the ability to handle large inventory systems which hamper the firm from being competitive in the market. Another major problem is that price matters so much especially for food commodities, whose slight difference makes a huge a difference to the supply. Although most industry players receive inventory from generally the same companies it is important to note that moving inventory around is the major problem. The table below details Walmart business environment hence come up with a logical assumption on the nature of the business.
Table 1.0 Industry Analysis
Competitive Strategy Industry analysis
Walmart is generally a cost leader, however, cost leadership might lead to customers apathy as many customers will be looking for which supply chain is offering the cheapest.
Walmart has majored heavily from product diversification, as it also offers financial services, hence penetrating the banking industry in a way. However, other players are also playing the same card. Worse still, other players have heavily opted for vertical integration and not horizontal integration, this reducing their costs of doing business. This partially explains why some Walmart are expensive.
The company is using strong innovation in advertising, supply chain systems as well as packaging. However, rivaling companies listed above will also be providing the same; hence there should be a revision of the possible intervention strategies.
Growth and MergingThe company is analyzing the possibility of merging with other companies primarily looking at the need for the growth of the market positively and inwardly. The growth of the market is based on the need to expand the sales volume
Strategic AllianceAs part of the competition, most firms have merged and integrated vertically and horizontally. Successful firms seem to be those outsourcing technology, and transport logistics. This way, it has become possible to merge vertically or horizontally with rivaling firms.
Walmart market has been changing progressively and lucratively with time. Walmart first ventured Walmart fast ventured in the market in 1945, by the efforts of the Sam Walton. Sam Walton first purchased the branch from Ben Franklin stores. He heavily focused on selling products at meager prices, whose primarily objectives was making a lower profit but make it repeatedly. The store became successful generating at least $250,000 in revenue.
By 1962, Walton had already diversified the business leading to the opening of the Walmart Discount City store at 719 W. With time, Walnut Street had encouraged the growth of the company in different stores managing to achieve the much-needed diversification. For instance, in 1968, Walnut opened its first stores in Arkansas for the Claremore; Oklahoma Walnut managed to achieve the much-needed diversification of production.
The decades of the 1970s and 1980s realized the most efficient market growth. In fact, by 1987s, Walmart had close to 198 stores and had a possibility making 15.0 billion in sales. Still, by 1987, Walmart had managed to interlink all st5ores using video-communication and private satellite network. This allowed for the much efficient sales and the tracking inventory. Also, Wal-Mart managed to open its first Supercenter by 1990.
The decades of the 1990s and 2000s saw Walmart become a top 3 retailer becoming profitable as compared to the Sears and Kmart. In fact, by 1990s, Walmart had managed to open big stores in Pennsylvania and California. The organization managed to become the most power retailer in the United States. By 1988, Walmart managed to introduce the neighborhood concept, where it operated small franchised stores. By 2005, Walmart had managed to control at least 20 percent of consumables.
By 2005, Walmart had managed to report at least 312.4 billion in sales. In the same year, Walmart had managed to secure over 3,900 stores and at least 6,200 facilities globally. The year of 2010, Walmart had managed to become the largest cooperation globally. Walmart has so far managed to have various stores globally, small and large. In fact, it has managed to diversify its product vertically and horizontally.
3. Company News
The report by Feldman (2017) explains how investors are crafting in breaking over 4,600 U.S stores (Feldman). Walmart has managed to logistically increase its market share by having more stores. However, in response, competitors have teamed to form Mighty Good solutions, where Walmart has been reduced to be any other player. The solution involves visiting local Walmart stores and stopping customers at the parking lot to tell them that they had free products. So far, the Mighty Good Solution has managed to visit customers in 100 Walmart stores, targeting customers who are on the parking before they enter, and convincing them of the wonderful opportunities elsewhere. It has managed to convince customers that they can get the same products that Walmart that offers alternative and cheaper products. The Mighty Good Solution has managed to work closely with the local suppliers to the handle the shipping and parking. So far Mighty Good Solution has managed to improve sales at Walmart, Kroger as well as Bed Bath and beyond. This welcomes Walmart in the real and genuine competition. The question is whether one chooses Walmart because of its superiority or because of the quality of the production that the company is offering.
The report by Peterson (2017) indicates that Walmart is making critical changes t...
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