Industry Analysis of Walmart

Industry Analysis of Walmart

Industry Analysis Example (Porter's Five Forces and Complementors)

Wal-Mart

Here is a very brief example of an Industry Analysis for the Cases using Wal-Mart, specifically Wal-Mart's competition in the consumer retail industry and not in the industries where it competes. Remember, that you are concerned with where Wal-Mart is positioned in the industry relative to the respective industry forces.

• Potential Competitors: Medium pressure

o Grocers could potentially enter into the retail side.

o Entry barriers are relatively high, as Wal-Mart has an outstanding distribution systems, locations, brand name, and financial capital to fend off competitors.

o Wal-mart often has an absolute cost advantage over other competitors.

• Rivalry Among Established Companies: Medium Pressure

o Currently, there are three main incumbent companies that exist in the same market as Wal-Mart: Sears, K Mart, and Target. Target is the strongest of the three in relation to retail.

o Target has experienced tremendous growth in their domestic markets and have defined their niche quite effectively.

o Sears and K-Mart seem to be drifting and have not challenged K-Mart in sometime.

o Mature industry life cycle.

• The Bargaining Power of Buyers: Low pressure

o The individual buyer has little to no pressure on Wal-Mart.

o Consumer advocate groups have complained about Wal-Mart's pricing techniques.

o Consumer could shop at a competitor who offers comparable products at comparable prices, but the convenience is lost.

• Bargaining Power of Suppliers: Low to Medium pressure

o Since Wal-Mart holds so much of the market share, they offer a lot of business to manufacturers and wholesalers. This gives Wal-Mart a lot of power because by Wal-Mart threatening to switch to a different