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.
(Wal-Mart Corporate Website) Huge turnover, large customer base and returning customers show that Wal-Mart has been able to achieve this goal in its 50 years of existence. Wal-Mart sources material from third world countries at low price. Very efficient supply chain management and bargaining power has enabled Wal-Mart to sell goods at low price. Company is also pursuing vertical integration strategy to lower cost. Answer-2) Wal-Mart Stores had turnover of $446.95 billion and net income of $15.77 billion in financial year ending
Zara's efficient operating model results in a short product life cycle and is a key differentiator over other retailers. Zara performs the design process in house and produces a high variety of more than 10,000 designs, which allow Zara to mix and match items and sell products quickly to maintain higher gross margins than other retailers. Zara also conducts low pre-season inventory purchases, which allows them to be flexible and supply inventory based on current consumer demand rather than projected consumer trends. Furthermore, Zara automatically places orders in response to current fashion trends, and its tight controls over their distribution process are very accurate and effective for Zara to differentiate themselves from other competitors. To conclude, Zara's effective control and flexibility over most steps in the supply chain differentiates them in the marketplace.
Supplier Bargaining Power Supplier bargaining power is moderate for the online jewelers. Obviously there are a fixed amount of diamonds and precious metals available for the jewelry market. Relationships with suppliers are also important because most of the online retailers use a “just-in-time” supply chain model and carry very little inventory. What offsets these strengths are the number of suppliers with quality products and the magnitude that one large jeweler can have on a supplier’s total sales. Blue Nile’s top three suppliers accounted for only 28% of
The strategy of Costco was low prices, a limited product line and limited selection, and a “treasure hunt” shopping environment. In terms of pricing, Costco was known for selling top quality brands products at prices below other wholesale or retail outlets. Costco kept prices low to members and capped margins on brand-name products at 14 percent and 15 percent as well as on private label Kirkland signature items. However, unlike Wal-Mart or Target that provide wide ranges of product selections, Costco provided members with a selection of only about 4000 items. The product range did cover a broad spectrum of categories but each category had a limited selection and products were usually packaged in bulk and targeted to large families and businesses.
Sam’s Club is the same way but it is geared towards companies and seems to sell more office supplies. Costco is rapidly expanding since they have noticed the two differences between BJ’s and Costco, with the intent for people to do one stop shopping for family and work all at one place. 3.) Out of Costco, BJ’s and Sam’s Club the strongest financial performer is Costco. Costco is making the most profit by the high amount of net sales and total revenue.
While Sam’s club does have 183 more stores, Costco leads Sam’s Club in the number of member of members at their stores. Costco has 58.8 million members, and Sam’s Club only has 47 million (Thompson, 2011, p. 244). As far as Costco’s and Sam’s Club’s strategies are quite similar. They are both focused on providing quality products at the lowest possible price. BJ’s takes a different direction and offers products in lower quantities.
Credit segment: It included Sears’s proprietary credit cards which can be used by customers to purchase goods and services from the Retail and Services businesses. Service segment: Composed of businesses that performed home remodeling and appliance repair Wal-Mart is one of the world’s largest retailing powerhouses functioning in three different formats, namesake discount stores, Sam’s Club membership warehouses and Wal-Mart supercenters. • Business Strategy: Wal-Mart is a discount store and it gives large discount on the products it sells. They maintain a very razor thin margin and make the profits through volumes. Hence the tagline “Always Low Prices “ Sears on the other hand does not follow a policy of discounts.
Also the low switching cost and consumer awareness of shopping around to find the best bargains increased competition around stores to capture customers. Corporate stakes were high for Wal-Mart, this can be seen in its earlier years (Ben Franklin stores) where they were losing
EUR. In fact in the last view years Desigual had tremendous success and was able to increase its turnover from 8 Mio EUR in 2002 to 440 Mio in 2010, which is an impressive growth. One of the main reasons for this success have been the opening of the first own brand store in 2002 in Barcelona and the further expansion of number of stores up to 250 till 2010. Desigual is already present in 72 countries such as Germany, Italy, UK, France and US, but the home market Spain in still the most important market with the highest turnover rate. However compared to companies such as Inditex, Mango or H&M, Desigual is still a very small company with a market share - for example in the Spain market - of approx.