Walmart Industry Memo
2/11/14
MK 4813
Industry Analysis: Walmart
Before Walmart was the powerhouse that it is today, the company or business had to analyze the industry it was pursuing to make sure it could achieve commercial success, learn how to operate within the industry, and most of all it had to discover a way in which it could gain a competitive advantage.
Is the industry accessible; is it a realistic place for a new venture to enter?
Walmart was entering the retail industry that did not have many discount retail goods stores. The barrier to entry was relatively high at the time, so it seemed to be a realistic place for them to begin their business venture but it would not be as easy.
Does the industry contain markets that are ripe for innovation or are underserved?
The retail industry offers the opportunity to enter because the retail industry needed a better cost leadership discount store with a variety of products and services that could be sold to a mass consumer base.
Are there positions in the industry that will avoid some of the negative attributes of the industry as a whole?
Yes, the retail industry offered a position that had some negative attributes within it, but these negative attributes could be avoided if a strategic plan was set in place to help deflect the negativity that comes with retailing.
The Five Competitive Forces Model that determine industry profitability.
1. Barriers To Entry.
Walmart was entering the retail industry which has a high level of entry because it is very competitive with many competing businesses trying to gain consumers business.
Economies of scale, or the cost advantage of producing more output to lower the cost per unit. Walmart took advantage of this barrier by offering cheap prices of goods that it supplied to consumers in mass amounts.
Government Policies, Walmart needed to make sure it followed all of the policies and restrictions that come with the retail industry.
Capital Requirements, Walmart based
MK 4813
Industry Analysis: Walmart
Before Walmart was the powerhouse that it is today, the company or business had to analyze the industry it was pursuing to make sure it could achieve commercial success, learn how to operate within the industry, and most of all it had to discover a way in which it could gain a competitive advantage.
Is the industry accessible; is it a realistic place for a new venture to enter?
Walmart was entering the retail industry that did not have many discount retail goods stores. The barrier to entry was relatively high at the time, so it seemed to be a realistic place for them to begin their business venture but it would not be as easy.
Does the industry contain markets that are ripe for innovation or are underserved?
The retail industry offers the opportunity to enter because the retail industry needed a better cost leadership discount store with a variety of products and services that could be sold to a mass consumer base.
Are there positions in the industry that will avoid some of the negative attributes of the industry as a whole?
Yes, the retail industry offered a position that had some negative attributes within it, but these negative attributes could be avoided if a strategic plan was set in place to help deflect the negativity that comes with retailing.
The Five Competitive Forces Model that determine industry profitability.
1. Barriers To Entry.
Walmart was entering the retail industry which has a high level of entry because it is very competitive with many competing businesses trying to gain consumers business.
Economies of scale, or the cost advantage of producing more output to lower the cost per unit. Walmart took advantage of this barrier by offering cheap prices of goods that it supplied to consumers in mass amounts.
Government Policies, Walmart needed to make sure it followed all of the policies and restrictions that come with the retail industry.
Capital Requirements, Walmart based