Walmart Essay -- GCSE Business Marketing Coursework Essays

Walmart CaseDefinition of Main Problem There laughingstock be no argument that Wal*Mart has revolutionized the discount retailing assiduity. Furthermore, CEO Glass and COO Soderquist have stepped in at the helm of this company and continued to take it in the right direction by quadrupling sales and profits from 1987 to 1993. The main problem they now face is how to sustain their phenomenal performance, and becoming number single has magnified this issue. No longer can they just sneak into small towns where the only competition is the local merchants shop. No longer can they copy larger companies like Sears and J.C. Pennys because of their size and scope. The fact is, Wal*Mart is bigger than these companies and their direct competitors Kmart and come out are doing everything in their power to conclude that gap. They are lurking not so quietly in the shadows, benefiting from Wal*Marts past choices, successes, and failures. They are there to blow the whistle if Wal*Mart st eps foreign the lines. Wal*Mart may be growing, but at a rate under 10% for the first time in years. Shareholders are concerned, the press is relentless, and legion(predicate) obstacles lie in their path if they hope to continue the trends Sam Walton set so ambitiously in 1962.Analysis With one of their main issues being uphold profitability, Wal*Mart is at a critical time in their life. They are no longer the hero, a place commonly reserved for competitors striving to be number one, because Wal*Mart is number one. No one can debate how effective they have been in getting here. Through their focus on higher-ranking technology and low cost leadership, Wal*Mart reigned supreme. They are redefining Porters five forces model in the discount retailing industry, and are in the desirable position of having first movers advantage. Yet this blessing is also a curse. By virtue of their efficient, effective system and its proven success, companies like Kmart and Target are watchi ng closely and both emulating and improving upon this system. An analysis of the five forces model will show Wal*Marts main competitive advantages in supplier power and barriers to entry. A look into their distribution centers and how they have been instrumental in reducing supplier power will be followed by an analysis of how effective first mover advantage has been and where they must take it next. Early in the history of... ...rn to introduction and growth as opposed to decline). Thirdly, there are areas both domestic and abroad relatively untouched by Wal*Mart large cities. Though it may seem like untapped potential in these markets, it is not recommended to expand in these highly populated areas. The axiom, If it aint broke, dont fix it, applies If Wal*Mart were to do an about-face and start expanding in this form, it would send mixed signals about not only changes in the corporate strategy, but also about the future of this conglomeration of stores. This is especiall y poignant at this volatile time in the price of their stocks. They should also be extremely cautious in the acquisition of existing discount retailing companies. As the industry becomes more concentrated, Wal*Marts selectivity in large acquisitions extends beyond just profits. Many times, Wal*Mart could better spend their resources by improving existing stores or building new ones because they can build them around their ideologies at a much lower cost than through purchasing other companies. Again, this is not to assign they should not expand in this manner, just that they need to be extremely selective when doing so.