The primary cost advantage is Wal-Mart’s superior distribution capability (location of stores, inside-out growth patterns, cross-docking, superior information management). Wal-Mart’s prices are low by the industry standard, which, combined with its lower costs, indicates a strategy that aims at growth in volume through grabbing increased market share. Low prices, advanced data management and extremely motivated employees (“10 ft rule”, “sundown rule”) means a better customer experience than at other discount retailers, even though Wal-Mart remains a self-service retailer. In addition, the large size of the traditional Wal-Mart stores adds convenience by offering a one-stop solution by offering a wide range of products. It’s worth mentioning that Wal-Mart acquired volume through a careful consideration of locations, away from competition.
Analysis: Corporate: Look into expanding even more globally and even the possibility of entering the “brick and mortar” industry. Business: to improve competitive position they can continue to innovate and use the successful business models that have gotten them where they are today. Competiveness) Blue Nile currently holds 0.6% (19 ranking) of the market share of Jewelry Retailers. Something the leading 18 have in common is that they have a physical location. Their s also less global competition which equals more slices of pie for Blue Nile.
What is Wal-Mart’s distinctive capability? Wal-Mart has the goal of providing "quality goods at low prices, responsible manufacturing, and opportunities for growth. Due to their expansive nature and broad customer base, they are able to provide a large discount on many of their products. They are also the leading employer in the United States of African Americans, Hispanics, women and senior citizens. What business are they In?
This leader began its massive international expansion of stores from “2,181 in 2006 to 2,757 in 2007 and 3,121 in 2008. In the United Kingdom, there are approximately 342 stores” (www.walmartstores.com). Unforgettably so, Wal-Mart has the second biggest net sales in the world and is because of their aggressive growth strategy. This industry leader has a competitive advantage over other retailers because of their large size, the ability to provide very low prices yet still earn revenue gains every year. In most cities, a few Wal-Marts can be found.
Zara was the oldest brand of Inditex and it was the innovator of the new category “fast fashion”. Its success was due to trendy cat walk inspired items manufactured at a fast pace but at affordable price. The supply chain design strategy responsible for the phenomenal success of Zara brand in its niche market was its quick response to the changing trends in the fashion industry and the requirements of the customers. Unlike the average of six months needed by a luxury brands Zara was able to manufacture and deliver the items in round three weeks period to its stores. Its key competitors typically supplied on average 2000 to 4000 items while Zara on the other hand was able to supply 11000 in a season.
Comparison of Communication Style Wal-Mart v/s Sears Both, Wal-Mart and Sears retail outlets have embraced low price strategy to motivate customers to buy their goods. These two retail outlets have many marketing strategies in common. They also have some different approaches when dealing with customers of diverse culture. Wal-Mart aims to sell specialized items to its customers. In regard to this, Wal-Mart management stocks items that they feel would sell out faster during specific times.
Instead of the typical industry members who offer high quality leather products as well, but charge a higher price, Coach looks to create “accessible luxury” in that it wants to create a high quality product at an affordable price in its factory stores while still catering to higher end consumers with its full-price stores. Coach also has a desire to make customer service a high priority, as we can clearly see when we look at their return policy for products. This is one of the reasons why Coach was able to increase their net income from $16.7 million in 2000 to $880 million as of 2011. When we look at the strategy that Coach has we see that they are able to have the factory stores and then they also have their
I would personally say that, of the five forces, the substitution from other industries would be the strongest. Wholesale clubs offer similar products in a sense, although it is the same product simply in larger quantities, or obviously, wholesale instead, which drives the price down. Which then could almost tie up with the buyers competitive force, which is where the wholesale clubs buy their products from, direct, which makes that middle man non-existent, and increases profit margins. 2. Do all three warehouse club rivals have highly similar strategies?
Case Study 1 Costco Wholesale Corporation: Mission, Business Model and Strategy Costco Wholesale Corportation (Costco) operates based on a cost-based advantage and also focuses on a market niche. A cost-based advantage involves achieving lower costs than competitors (Gamble & Thompson, 2009). Costco also focuses on the upscale customer, offering more luxurious items, such as diamonds. Costco utilizes many strategies to help achieve low costs that it can pass onto its customers. By minimizing handling of goods through the use of direct shipments form the manufacturer to the store, as well as the use of cross-docking techniques where items are shipped to a cross-dock and then distributed to stores, Costco is able to minimize handling time.
These two companies occupied more than 74% market share in 2004. As such companies usually have a better reputation and are better recognized, they could have higher customer loyalty. Therefore, consumers are less likely to switch to other producers. Moreover, economies of scale could also help some incumbents to cut average costs, making it even more difficult for new entrants to survive. The Power of Suppliers Suppliers supply raw materials including caramel coloring, phosphoric or citric acid, natural flavors and caffeine to concentrate producers.