Ultimately, the board will assess all the observations in order to make the decision in the best interest for the community. In this case study, there are no in depth details on the small town, so in some situations the reactions from the businesses or residents could vary. Owners of Small Businesses Opening a Wal-Mart store will affect many individuals in a small town, especially the owners of small businesses. This large store will have a different affect on a small business depending on the type of store. A Wal-Mart will increase the customer base for small businesses that are not in direct competition, such as restaurants, bars, and gas stations.
They have a good variety of products to shop for. Wal-Mart has many competitors, but one of the strengths that the company has the ability to lower the prices for their customers need. Wal-Mart can be consider a unique store because of one special strategy that they have. The strategy consists of comparing the prices of the other stores, if the other store has an ad of a lower price than Wal-Mart, then they will give it to them to the same price. Many costumers is one of the plus that they give to Wal-Mart because this means that they don’t have to go store by store catching all the specials that they have.
Hence the tagline “Always Low Prices “ Sears on the other hand does not follow a policy of discounts. Their main strategy lies in updating their merchandise section and offering flexibility in paying for the merchandise gradually over time, especially through their proprietary credit cards. • Store Size and Store Revenue: Total retail area is higher for Wal-Mart at 313,217,355 sq. ft as compared to Sears at 92,700,000 sq. ft and the revenue generated per sq feet is higher for WalMart at $348.49 per Sq.
* Small town locations. In the past, its key strategy was opening discount stores in small towns. First, it avoided direct competition from stronger players, who did not take into consideration of running business in small towns. Second, because of the small population it served, when Wal-Mart opened a store, it won the market and barred new competition from entry. Third, low real estate prices in small towns led to reducing costs.
While other competitors, such as Target, operate in the same market trying to attract consumers looking for low prices and conveniently giving customers the access to a one stop shopping store. Though the largest company and one of the most successful, Walmart can make improvements. The key problem for Walmart has to do with the negative treatment of employees causing a high employee turnover. Walmart’s success has come from its well know low prices and extreme variety of products allowing customers to get all their shopping done in one place. The company continues to employ new IT systems to track sales and allow managers to compare their store’s success to others.
Chapter 2 focuses on the Dell Computer founder and CEO, Michael Dell. Dell’s contributions to the field of business include the direct model of mass customization and direct distribution model. Mass customization is a “one-to-one relationship between the company and the customer” which leaves out the intermediary (Krames, 2003, p. 59). Dell’s direct distribution model eliminates dealers, inventories, and institutes cost-cutting measures by cutting out the intermediaries. Deleting players from the distribution chain can be risky, but results in a reduction in operating costs and improved margins (Strickland, 1999).
The power that Wal-Mart holds with CPG’s is crucial. Wal-Mart is able to dictate to these companies how they should price their goods. It is generally lower than the company would like. However, that company has no strong say in the matter because if they want to have the goods in Wal-Mart stores, they have to comply with Wal-Mart’s rules. So, by Gillette and P&G merging, they would have more negotiating power when dealing with superstores like Wal-Mart and Target.
They believe in making better on product availability and inventory, the real risk that the customers take their basket elsewhere when there are items out of stock will be reduced. However, there are few factors which greatly affected the company’s total revenue. One of the factors is the continued store expansion activities. Each additional store may take away sales from the existing units. That’s why the Walmart management started to plan a slower new store growth, so that the impact of new stores on comparable store sales will be stabilizing over time.
Wal-Mart worked with the deodorant manufacturers by asking them to eliminate the box. By eliminating the box Wal-Mart saved customers money, and as a result they could offer lower prices then their retail competitors. Making small changes, like removing the deodorant box, enables Wal-Mart to stay the most successful and competitive retail store worldwide. Reference Walmart Stores, Inc.. (2012). Walmart history.
Aesthetically they keep cost down by not going overboard with interior design and comparatively have low labor costs. The strongest competitive force is the rivalry among sellers, buyers and suppliers. The possibility of these large wholesale companies being affected by potential new entrants is quite low. Because we are talking about significant amounts of quantities, the wholesale club industry will not be impacted by other industries offering substitute products. I think Supermarkets have a minimal competitive impact because they try to reach a different target market, even though Supermarkets and the wholesale club industry both carry similar products.