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    Praveen SCS Assignment 3 PDF

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    This document discusses Porter's Five Forces model and its application to analyzing Walmart's competitive landscape. It analyzes each of the five forces - threat of new entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitutes, and rivalry among existing firms. For Walmart, the document finds the threat of new entrants and bargaining power of buyers to be moderate/weak forces, while bargaining power of suppliers, threat of substitutes, and rivalry among existing firms are weak/strong forces respectively.

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    Praveen SCS Assignment 3 PDF

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    NATHAN
    101 views3 pages
    This document discusses Porter's Five Forces model and its application to analyzing Walmart's competitive landscape. It analyzes each of the five forces - threat of new entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitutes, and rivalry among existing firms. For Walmart, the document finds the threat of new entrants and bargaining power of buyers to be moderate/weak forces, while bargaining power of suppliers, threat of substitutes, and rivalry among existing firms are weak/strong forces respectively.

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    This document discusses Porter's Five Forces model and its application to analyzing Walmart's competitive landscape. It analyzes each of the five forces - threat of new entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitutes, and rivalry among existing firms. For Walmart, the document finds the threat of new entrants and bargaining power of buyers to be moderate/weak forces, while bargaining power of suppliers, threat of substitutes, and rivalry among existing firms are weak/strong forces respectively.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    101 views3 pages

    Praveen SCS Assignment 3 PDF

    Uploaded by

    NATHAN
    This document discusses Porter's Five Forces model and its application to analyzing Walmart's competitive landscape. It analyzes each of the five forces - threat of new entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitutes, and rivalry among existing firms. For Walmart, the document finds the threat of new entrants and bargaining power of buyers to be moderate/weak forces, while bargaining power of suppliers, threat of substitutes, and rivalry among existing firms are weak/strong forces respectively.

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    of 3

    PORTER’S FIVE FORCES MODEL

    A model was put forward by Michael. E. Porter in an article in the Harvard


    Business Review in 1979. This model, known as Porter's Five Forces Model is a
    strategic management tool that helps determine the competitive landscape of an
    industry. These Porter’s five forces are as follows:

    The above picture Displays about porter’s five forces model. Now let us discuss
    about the porter’s strategy for Walmart.
    PORTER’S STRATEGY FOR WALMART

    Threat of New Entrants


    Based on this Porter’s Five Forces analysis, the strong force of new entry is
    broken down into the following component external factors:

    • Moderate to high cost of brand development


    • Low cost of doing business
    • Moderate capital costs

    It is costly to develop a new entrant’s brand. Nonetheless, some large new


    entrants have the financial resources to build a strong brand. This condition exerts
    a moderate force on Walmart Inc. The cost of establishing a new retail firm and
    the cost of running it are low to moderate.

    Bargaining Power of Suppliers

    Walmart experiences the weak force of the bargaining power of suppliers, based
    on the following external factors:

    • Large population of suppliers


    • Tough competition among suppliers
    • High availability of supply

    This Porter’s Five Forces analysis of Walmart Inc. considers the large population
    of suppliers as having weak potential to impact the company. Individual suppliers
    have minimal influence on large retailers like Walmart.
    Bargaining Power of Buyers

    Walmart is subject to the following external factors concerning the weak


    bargaining power of buyers or customers:

    • Large population of consumers


    • High diversity of consumers
    • Small size of individual purchases

    Threat of Substitute Products or Services

    The following external factors impose the weak threat of substitution against
    Walmart:

    • Moderate availability of substitutes


    • Low variety of substitutes
    • Higher cost of substitutes

    Some substitutes to Walmart’s goods are readily available. However, the external
    factor of the low variety of substitutes makes it difficult for consumers to move
    away from products available from retailers like Walmart.

    Rivalry Among Existing Firms

    The following external factors are the most significant considerations in


    Walmart’s strategic management of the strong force of competition:

    • Large number of firms in the retail market


    • Large variety of retail firms
    • High aggressiveness of retail firms

    Walmart experiences the strong force of these external factors that define the
    competitive rivalry in the retail industry environment. In Porter’s Five Forces
    analysis model, a large number of firms typically strengthen competition.

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