This is also known as a vertical organizational structure (Walmart, 2012). The effective organizational structure of Wal-Mart has enhanced the company, allowing the achievement high market performance in all of its outlets world-wide, despite facing intensified competition in the world goods market. Wal-Mart stock is investment grade rated (AA rating) by both Moody’s and Standard & Poor’s. This identifies Wal-Mart as a very safe and proven investment choice (Internet Brands, 2012). Wal-Mart stock is considered by professionals to be safe, with a substantial dividend payout.
In one hand, Dollar General has sometime lower prices with brand names products; they focused on even-dollar prices and the fact that sometime customers at Dollar General Store pick up much stuff at a really cheap price. As we know customers spend longer time at Wal-Mart due to how big and crowded the place is. I believe they should compete in terms of basic consumables. In some areas, people do not want to drive 20 or more miles to go to Wal-Mart, and then spend 45 minutes to shop. The location of Dollar General is more convenient most of the time than Wal-Mart.
There are also workers and suppliers, who don’t think that Wal-Mart is good for America. Many local businesses are out of business because they cannot compete with Wal-Mart’s low prices. By striving for lower prices, Wal-Mart turned to outsourcing and now the majority of company’s suppliers come from China. Wal-Mart’s outsourcing has a dual effect: it provides low prices for products, more earnings for shareholders and on the other side it drives American suppliers out of business, which means people are losing their jobs. However, some argue that outsourcing unskilled labor will open up opportunities and will lead
Target’s performance was affected by the global financial crisis that hit the world during that time. The crisis caused a fall in GDP and massive unemployment. This affected the buying habits of customers who then preferred to buy from Wal-Mart due to their legacy as a low-cost discounting store. Wal-Mart, Target’s main competitor, was attracting more customers because of its low-cost selling strategy. Consumption patterns were all of a sudden frugal; this made Target lose many customers since it was perceived as a luxury store.
The return on assets and return on equity ratios are also better for Hershey’s because the company is making more money on less investment then Nestlé. External Analysis The first of Porter’s five forces is the threat of new entrants. “Identifying new entrants [to an industry] is important because they can threaten the market share of existing competitors” (Strategic Management). Fortunately for The Hershey Company,
This strategy was deemed to be cannibalistic in the longer run since their stock prices and fair share of the market was already declining post 2007. The third approach was to aggressively accelerate the rollout of food content in stores and thus making its entry in the grocery business to drive the frequency of shopping trips. Since consumers shopped for groceries significantly more often than home and apparel goods, Target leadership felt the presence of grocery items could increase food traffic in to the store and thus further inducing them to buy non grocery items as well.
Target’s performance was affected by the global financial crisis that hit the world during that time. The crisis caused a fall in GDP and massive unemployment. This affected the buying habits of customers who then preferred to buy from Wal-Mart due to their legacy as a low-cost discounting store. Wal-Mart, Target’s main competitor, was attracting more customers because of its low-cost selling strategy. Consumption patterns were all of a sudden frugal; this made Target lose many customers since it was perceived as a luxury store.
Although they might crave an affordable price, it is important to still be exposed to stylish, unique choices. Luckily, there are major retailers that cater to both types of customers, and Walmart and Target are just two of them. The United States mass-market is dominated by many firms, but Walmart and Target are two extremely well-known retailers who cater to the ever-changing crowds of consumers. Each major retailer has differentiated themselves in a number of ways, targeting different groups and finding their own unique niches. They both participate in giving back, they both take corporate social responsibility seriously, and both make their store experiences memorable.
At Walmart, a shopper can find a wide variety of products, from apples to zippers, all for a low price. At some point though, consumers have to wonder if there is an underlying cost associated with low prices. What are shoppers sacrificing in the name of low price? If an entire community benefits from low prices; do entire communities pay a price as well? How about an entire nation?
The shops selling the ‘high order goods’ could afford a more expensive rent for property in the CBD, making it accessible for people living in the surrounding area. This trend still exists, however it is in decline as new retailing patterns have emerged. The nature of shopping has changed; the ‘everyday goods’ are purchased less frequently in supermarkets because of the introduction of freezers. Whereas shopping for ‘high order goods’ has become a leisure activity involving a drive to an out of town shopping centre or retail park. Due to the suburbanisation and counter-urbanisation, it has decreased the population within city centres and certainly increased the