MGMT 4020 June 24, 2013 Homework Assignment #2 Competition is very high in the North American wholesale club industry. Every wholesale club wants to sell top-quality products at prices less than others in order to attract draw customers. And they all want to display low prices on pallets or inexpensive shelving, therefore, they have very low costs for store decor and fixtures, have comparatively low labor costs, and spent minimally on advertising and customer service. Five Forces Analysis 1. Bargaining Power of Buyers is moderate.
SEARS BUSINESS MODEL People involved: Before mid 20’s: mainly focused on farmers in countryside who were largely isolated from the urban markets. After Mid 20’s: focus shifted to urban population who acquired wealth and migrated from low income class to middle class; the farmers who were enabled with increased mobility due to automobiles. Motivation: Sears, Roebuck and company: an untapped segment of population with specific needs which were till then not addressed. Customers: 1) Farmers: • Convenience – wide range of quality products could be ordered and obtained from a customized catalogue at a lower price. • Cost effective- eliminated the cost of travelling to the city.
This happened with General Motors, where other countries required a lower minimum wage, allowing General Motors to collect more profit. The main question is, should the corporations act with humility, or solely for self-interest? Naturally this economic question isn't simple; there are many factors one needs to take into consideration. After General Motors moved their factories to other countries, the prices of cars went down because it cost less to make them. While some Americans were unemployed because of the corporations' move, the general population was benefiting from lower prices.
Governments in NIC (newly industrialized countries) have tried to lure TNC to their countries. One way they have done this is by keeping the land prices artificially low; this is so the TNC can build factories and other building for less money. They also have a relaxed attitude to environmental laws so the TNCs do not have to pay out for expensive treatments for their waste so it complies with strict laws like the ones they have in the US, UK and Japan. Another thing that attracts TNCs to NICs is the cheap labour cost, weak unions and lack of minimum wage. This means that the TNC can pay workers less, not worry about providing good working conditions.
IKEA Invades America IKEA, a worldwide top furtinuture retailer, has presented high perfomance in the local and international market. The company’s sucessfull perfomance was achived by low price, wide variety and good design products, shopping convenience and cheap transport for the constumers due to the flat packing technology. However, in the US the retailer faces some challenges on both consumer and market sides, notably the reluctance of some customers to change the furniture, competition from existing furniture retailers and different preference of consumers. IKEA might have failed in market research when decided to enter in this country. From the consumer side, in general, Americans think that furniture should last a long time, which is not aligned with IKEA values that does not encompass products’ durability.
Baldwin Farms should reinvent the Pottsville facility Reality: 1. Logistic - Taking too long from California to retailer and making accurate forecasting tricky for customer 2. Still profitable but getting low down * Small pre-order from retailer * Overhead * Low gross margin 3. Good reputation and admired company in long run 4. More than 50% market share in organic market Via above analysis, we see problem is solvable and invisible value of the company is big and cannot be ignored which can be a entry barrier to other organic producer and hard to be catch up in short time.
Technological- Lighter cars, hybrids, longer lasting batteries. Economy- The type of market our society is currently in. If we are in a recession, consumers might not be buying cars. Social- Society is starting to go away from power and really want MPG. Save money any way possible.
The ‘seduced’ consumer is one with no restrictions; i.e. money etc, being a seller’s favourite type of buyer, while a ‘repressed’ buyer may be restricted by money or disabilities etc. This type of buyer has less favour with sellers. A consumer society is still based on inequalities and exclusions (Hetherington, 2009, p30) There is also a minority of consumers classed as ‘oppositional’, this group of people tend to oppose the big supermarkets and retail parks in favour of small businesses, for political and/or environmentally reasons, those who like to buy organic from farmers’ markets etc, “reducing carbon footprint and recycling to create a vision of consumption based more on personal thrift and social responsibility” (Hetherington, 2009, p47-48) rather than being a ‘seduced’ consumer. Supermarkets’ buying power creates a ‘zero-sum’ effect, where not everyone benefits.
The use of gentrification can be viewed by cities and towns as a means to economic development and urban renewal. It has aided in local economic and community revitalization, increased tourism and employment, and preserved regional history, culture, and pride. However, gentrification has not been a benefit to everyone. Gentrification may benefit the upper and middle classes, but the effects of it are often detrimental to low income residents because it forces them to adjust to a lifestyle that they cannot afford. Some see it as simply driving the problems further under the surface or into other areas, rather as a means to revitalizing local communities.
But the low carb craze has been eating into our market. Leeza, how successful has our recent advertising campaign been in stopping the erosion of our market share?” Leeza Schaul, Director of Sales and Marketing for Fitter Snacker, thought for a moment before responding. “Well, we certainly haven’t seen a return to the levels of growth that we were seeing before the low-carb craze hit, but we then again, we may be having some success in preserving our current customers. We did some focus group studies on current customers. We showed a group of customers advertising copy that presented research that challenged the long-term success of low carb diets and pointed out the important role that carbohydrates play in overall health.