These two retailers sell almost the same products and they have similar strategies which are low price and high-quality service. As the customers are price-oriented, the small companies and local retailers which are impossible to achieve the same low price can only compete through specialty products. For example: Frank’s Nursery focus on garden related products and Sears specializes in selling craftsman tools. What’s more, the home improvement industry’s expected revenue growth is only 5.39%. It means the competition will become more intensive.
Through its Home Depot Supply Division, the company operates one of the nation's largest diversified wholesale distributors, with operations in 41 states and Canada. The Home Depot has been recognized by FORTUNE magazine as the No. 1 Most Admired Specialty Retailer and the No. 13 Most Admired Corporation in America for 2006. According to the income statement the profitability of the
One example of a business where IM will not work is a business that that sells electric wheelchair. Additionally, companies looking to sell products to a wide range of people and are looking to have large number of sales will not find IM as useful as outbound marketing (OM). While IM is good because it is cheaper to imploy and brings in higher value potential customers, it only captures a small market. OM should still be pursued if a company is seeking for large sales and large customer base. The most optimal marketing strategy may still be to apply both methods of marketing with the right
There was not one dominant player within the industry; they were more equally balanced thus increasing rivalry. The High fixed cost for running a discount store resulted in an economies of scale effect, this can be seen when Wal-Mart decided to gain economies of scale by building their own distribution centres to add value. Going public in order to finance the extra storage was important for Wal-Mart to utilise capacity as efficiently as possible, they did this by creating distribution hub around 15-20 stores. The increased rivalry continues, this was due to the low levels of product differentiation and little in the way of own branding, products were standard in nature through all discount stores. Also the low switching cost and consumer awareness of shopping around to find the best bargains increased competition around stores to capture customers.
Some analysts also believe that even when the economy improves, your average consumer will still look for ways to save money and continue to frequent the dollar discount stores. Finally it is the opinion of a third analyst that it is all dependent sustainable job creation. Not any job, but one with a livable income that can support a family. Without a living wage consumers will continue look for inexpensive ways to shop. RUNNING HEAD: Dollar General 3 The keys to Dollar General’s success have been location, product selection, and the decision to renovate vs building a new location.
There is a failure to realise that long term better economic welfare also means general higher standards of living, as people have enough money to buy everything they need and some of what they want, competition is rife so drives quality up and prices down, and the government are able to take in more taxes from firms who are much healthier financially. This mass employment may lead to more jobs, but the workers themselves or the way they’re used is hugely inefficient. Another reason that labour production in the UK is so low is the lack of competition. There is a strong body of evidence that competition enhances productivity. So, with a lack of one there is a lack of the other.
Customers also place a high importance on the quality of product so because Penn offers a high quality product it is able to attract and retain customers. The low rivalry of competitors is a great strength for Penn National Gaming. It offers Penn the opportunity to grow in different markets and expand its business across the United States. Also because of the low number of competitors it makes it easier for Penn to keep a close eye on the competition’s products and pricing which will allow Penn to strategically alter its own products and pricing strategies. The threat of substitutions is high especially for the gaming industries which Penn National Gaming operates in.
Relevant financial information contributes to sound business solutions. For example, the predicted future costs and revenues that differ among alternatives are essential to financial decisions. Currently, Guillermo’s patented finishing coating does not have a large market audience as does the flame-retardant coating. Thus the company has determined that it could purchase another finishing product that would add the same amount of value to its custom furniture. This alternative requires consideration of the opportunity cost of eliminating in-house production of the finished coating.
This business strategy worked very well for these companies, however that’s not always the case for all businesses. Therefore, companies turn to be unethical in order to make a profit or just because it the easier way to go. In this case for Ben and Jerry’s everything seemed to work out fine for them, and they were still profitable even when be ethical. Instead of getting brownies from Greyston Bakery they could’ve just produced their own brownies and that would make them a lot more money. However, they decided to partner up with Greyston Bakery because it was the right thing to do and it created more jobs people who otherwise wouldn’t have one.
The Production Concept – Companies focusing on this concept will primarily focus on achieving high production efficiency at low costs and mass distribution as they believe the consumers are primarily interested in widely available products at low prices. This concept makes sense when the consumers are more interested in obtaining the product than features. The Product Concept – Companies will study a product concept before they market the product to their customers are a lot of time and money is spent on research to ensure they reach their target market, in order to do this they must fully understand and know the product to ensure they can present the products best qualities and features. 2. Britvic’s micro and macro environment.