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These include intellectual property rights, rising cost of production in China, and the threat that is posed by intense competition in its many spaces.
As Wal-Mart expands its retail footprint in emerging markets, especially China, it must take into account that the intellectual property protections are different in other parts of the world.
In China, for example, one of the major competitors is Wu-Mart, where name confusion is not only evident but deliberate. Such knock-offs can not only siphon business away from Wal-Mart, but can also reduce consumer impressions of Wal-Mart as well, particularly if the knock-off is inferior.
Other countries that have potentially high growth also have weak intellectual property protections. Another threat that Wal-Mart has is its dependence on China as a source for its goods.
Wal-Mart typically deals with third-party suppliers, but many have outsourced production to China. Wal-Mart will either have to pass these rising costs on to customers, or it will Terms used in essay instuctions to seek out production from countries whose cost of production remains low.
Complicating this issue is the fact that China has a strong relationship with China, something it may need to unwind slightly in the medium to long-term.
The third threat in the external environment lies with Wal-Mart's competition.
While Wal-Mart is the biggest player in discount retailing by far, dwarfing Target, it remains subject to threat because companies like Target are very well-run and any weakness on the part of Wal-Mart will likely result in a decline of market share.
The two other major businesses for Wal-Mart are online retailing and warehouse clubs, with Sam's Club. Wal-Mart trails Amazon in online retailing, and that company is the established leader in both brand and technology. While Wal-Mart can combine in-store pick-up and online ordering, it still faces an uphill battle against Amazon's established, leading brand.
In the warehouse industry, Sam's Club is the number two competitor behind Costco. Again, it does not have the same brand power as Costco. Arguably, Sam's Club also does not have the same pricing power because it is not run as well. Costco is an incredibly well-run organization that poses an existential threat to Sam's Club because it tends to outperform in markets where they both operate.
Each of these threats should be dealt with in turn. Intellectual property is an ongoing battle, something that Wal-Mart must have an in-house legal team to work on. The company should focus on finding alternatives to China, in the face of rising costs of producing goods there. This search can be worldwide in nature, and Wal-Mart has the luxury of time because all of its competitors face the same situation.
Dealing with those competitors is more complicated. Wal-Mart has staked out its competitive position as a cost leader.
This works in bricks and mortar retailing, but has not been as effective against Amazon. In addition, Sam's Club has struggled to compete against the high service element and low prices at Costco. Wal-Mart needs to take customer service more seriously, which probably means more training and technology if it wants to keep staff costs down.
Strengths Wal-Mart has a number of strengths that it leverages to maintain its leadership of the retailing industry. The first strength lies with its size. Wal-Mart is the largest retailer in the world, and this gives it tremendous bargaining power with suppliers.
The result of that bargaining power is that Wal-Mart can offer goods at lower prices than competitors can. While most of the company's major competitors also have strong buying power, Wal-Mart has used its legendary bargaining power as a key selling point with consumers, something that competitors will have difficulty overcoming if they do not match Wal-Mart's bargaining power.
A second key strength is the company's technological capabilities, in particular with respect to supply chain management.
Supply chain management is a key strategic advantage for Wal-Mart. It has become a master of logistics, tracking goods throughout its supply chain using advanced technology, and takes every opportunity to reduce the amount of inventory in the supply chain.
The company then uses this supply chain efficiency to drive down prices more, creating a source of sustainable competitive advantage. Another strength that Wal-Mart has is its merchandising expertise.
Its logistics excellence allows it to get the right goods to the store at the right price, but Wal-Mart is also talented with respect to merchandising. The company ensures that the most eye-popping deals are highly visible.
This reinforces with the customer the idea that Wal-Mart has the lowest prices. The consumer then is less likely to question the prices of other items in the store. After the visit, the lowest prices will often still resonate with the consumer, even if he or she did not buy.
This reinforces the idea that shopping at Wal-Mart is the way to acquire the best prices consistently, something that creates brand loyalty.Terms used in essay instuctions songs that reflect my personality essay. Argumentative essays on gender wage gap the best college application essay ever preconditions of liberal democracy essays chiclete com banana tirou a barbaric essay quocumque me .
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Excerpt from Essay: Wal-Mart Threats There are a number of threats that Wal-Mart faces in the external environment.
These include intellectual property rights, rising cost of production in China, and the threat that is posed by intense competition in its many spaces. As Wal-Mart expands its retail footprint in emerging markets, especially China, it must take into account that the intellectual.
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