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30 wal marts biggest competitor in this segment is

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30Wal-Marts biggest competitor in this segment is Target, which produces more upscale and chic productsthan Wal-Mart at inexpensive prices.31Wal-Mart is still cheaper than Target, but those customers whowant superior quality and are willing to pay slightly more for it might swap. Another substitute alternativeis online shopping. Here, customers can find cheap alternatives since online businesses do not need realstores and on site staff, can save this money and therefore reduce product cost. The risk of developmentsof substitute products is medium.Bargaining Power of SuppliersThis force affects the level of competition in any industry, but as a general rule it can be said thatcompetition gets fiercer when:- there are many suppliers- there are only a few good substitute raw materials- the costs of switching raw materials is especially costlyUsually, it helps both the business and the supplier when they enter into a closer relationship withmore visibility, an agreement on fair prices and better cooperation.32The volume of Wal-Martsorders is so large that supplier’s bargaining power is fairly low.33Suppliers do not want to lose thisbig customer and are willing to reduce product’s prices accordingly.Wal-Mart sells mainly undifferentiated and standard products. For these, the costs of switchingraw materials are low, lowering the bargaining power of suppliers further. The bargaining powerof suppliers is low.Bargaining Power of CustomersWhen there are many customers or when customers buy large volumes their bargaining power is high,affecting the level of competition. Competition is particularly high in industries with little productdifferentiation, which is the case with Wal-Mart.34Therefore, Wal-Mart is forced to offer the lowest prices,or the customer will go buy the product somewhere else. Besides that, the number of customers in thisindustry is huge, increasing customer bargaining power further. Wal-Mart’s customer bargaining power is30Strategic Management, Concepts and Cases, Twelfth Edition, Fred R. David p. 12031Walmart Stores, Inc.-2009, Amit J.Shah and Michael L. Monahanat, Frostburg State University p. 30632Strategic Management, Concepts and Cases, Twelfth Edition, Fred R. David p. 1213334Strategic Management, Concepts and Cases, Twelfth Edition, Fred R. David p. 121
18high. To sum it up it can be concluded that Wal-Marthas Porter’s Five Forces under good control andintegrated it into its strategy.There is not much rivalry to be expected since Wal-Marts biggest competitors are still much smaller thanitself and cannot beat its prices. Wal-Marts size also comes in handy when controlling new industry entries,making it almost impossible for new entrants, unless they bring a lot of capital.

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Fall
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Hypermarket, Discount store

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