4.) The primary problem for the company in this case is moving to a new location because the current location is too small. 5.) These problems have emerged because the current location right now is too small to meet the growing demand. The ingredient prices are high because she sells higher end breads that cost more, and the labor costs are high due to hand production techniques, and possible increase of debt would be due to whether or not she expanded and bought another location.
They will also be more likely to buy the premium diapers that they do not usually purchase due to the higher price. If the price of diapers increases, total revenue will decline. Since there is a large volume of brand substitutability in this industry, if one brand increases their price, consumers can easily switch to another. * Market Structure * The disposable diaper industry would be classified under monopolistic competition. This is due to the relatively large amount of sellers, differentiated products, and easy entry and exit from the industry.
Increase in food portion size – People think super sizing their fast food meal is a great deal. The need to push sales and increase business, serving sizes are an estimated triple the size and then people also eat dessert. 4. Decrease in food preparation time – Fast lifestyles have taken over and people eat out of necessity instead of eating for pleasure. They eat too fast, don’t enjoy the food, don’t enjoy the time it should take to prepare the food.
There was not one dominant player within the industry; they were more equally balanced thus increasing rivalry. The High fixed cost for running a discount store resulted in an economies of scale effect, this can be seen when Wal-Mart decided to gain economies of scale by building their own distribution centres to add value. Going public in order to finance the extra storage was important for Wal-Mart to utilise capacity as efficiently as possible, they did this by creating distribution hub around 15-20 stores. The increased rivalry continues, this was due to the low levels of product differentiation and little in the way of own branding, products were standard in nature through all discount stores. Also the low switching cost and consumer awareness of shopping around to find the best bargains increased competition around stores to capture customers.
As the pace of the American lifestyle increases there is less time to prepare a home-cooked meal, which leads many families to stop at the drive-thru on their way home. This rise in fast food consumption may be one contributing factor to the rise in obesity among Americans, especially among children and adolescents. High fat fast food meals take a toll High fat diets, typical of fast food meals, contribute to a variety of negative and costly health outcomes, including obesity, high cholesterol, heart disease and some cancers. With the increase in consumption of high fat and calorie foods, there’s usually a decreased intake of foods rich in nutrients such as fruits and vegetables. This doesn’t mean that all fast food is bad, and it would be unrealistic to recommend totally eliminating it altogether.
Mass production also lowered the cost of the products. The quantity of the of the products were not scarce anymore, so the seller didn’t have to sell his products at a high price in order to make a living. The United States was looked at as a world power because of this new “technique.” Mass production also allowed for more jobs to open. Factories needed many workers in order to maintain the upkeep of the flow of items. The United States was facing hard times in the jobs aspect.
This worked well enough in a slower time when supply chains were less complex and when products themselves were less complex. Those were times we now refer to as the "good old days." Increasing competition and demands from customers to deliver products faster and cheaper shapes the world we live in today. At the same time, the array and complexity of products in our economy has increased dramatically and that trend will clearly continue and even accelerate. In order to be competitive and also profitable, companies need to find ways to reduce or eliminate costs associated with routine and repetitive business transactions.
Wal-Mart offers valuable discount to their customers while still offering brand name and fashionable product. Hence Wal-Mart was able to capture a lot of Target customers and increase their sales and profits, while target was seeing no profit growth and a steep decline in sales. * General Public – The Company was not concerned about how the general public viewed their products and services. The public image of the company affects consumers buying power. Wal-Mart sales also increased because the public viewed them as a better place to save money in the recession that they were facing.
Americans are always trying to find ways to save money, so getting those deals are a plus. Shopping at one place makes it easier for families with children because having to unload and reload children can be a hassle. Even though on some days the mall is crowded, it is still a lot easier than having to drive from store to store. Shopping at a mall gives you the
● Some people enjoy picking out groceries for themselves. ● That means that any business getting into delivering groceries must put quality at the top of its priority list. ● The margins in the grocery business are very thin, which means that economies of scale are needed before profits can be realized. Also, delivery routes will have to be optimized for the same reason. Disadvantages of traditional grocery stores over web grocery stores: ● Brick and mortar stores tend to have higher set up costs and fixed costs than web grocery stores since items can be stacked more tightly in much larger distribution centers in web grocery stores ● Web grocery stores can have a much larger selection than traditional grocery stores.