Business Analysis (Part - Ii) Wal-Mart

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INTRODUCTION Wal-Mart , a discounted retailer store, was started in the 1962. It growth remained stagnant since 1970s except in 1990s when its growth rate was moderate. Its revenue has reached more than US$ 400 billion and has more than 2 million employees. It has opened up its stores in 15 different countries and in addition to being a retailer, it has become the largest seller of groceries in United States. As an owner of Sam’s Club, it provides products in bulk to people who pay for a membership, much like Costco. QUALITATIVE ANALYSIS Operating Efficiency, Steady growth, excellent know-how of financial and strategic operation management, and low pricing-model - what Wal-Mart has made stronger when analyzed qualitatively using Porter’s Five Forces Model. Wal-Mart, Target and Costco - these are the three major players in the industry. Using Porter’s five forces, we can qualitative analyze the growth of the discounted retail industry. * Internal Rivalry: HIGH Costco, Target and Wal-Mart represent oligopoly that hold a vast majority of the market-share. In the past, each of these firms had a separate market segment, so the competition among them was minimum. Fort example, Target concentrated on little affluent neighborhood whereas Wal-Mart concentrated on rural neighborhood. However, with the growth of such firms as target and Costco, when they started looking to expand their market segment beyond what they already had, Wal-Mart faced a very stiff competition. As such, all the major discounted retail stores started vying for each other in the same location, hence the competition among them remains very strong. * Substitute Products: LOW Because of products being sold for daily use, there are no direct substitutes. The only competition which such discounted stores face is the threat from the products available in the gray market which may

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