Case study: Wal-Mart STEEP analysis for Wal-Mart Wal-Mart is one of the world’s wholesalers providing its products at an affordable price. With regard to its STEEP analysis, several factors affect the store and have impacts on its performance. Sociocultural factors i. Sociocultural factors play a crucial role in influencing customer decision. People think of Wal-Mart as the best place to go shopping because of quality and low prices. ii.
Advantages of Multinational Corporations: • Cheap Labour One of the advantages of multinational corporations is the opportunity to expand to countries where labour is less expensive. This is one of the benefits that smaller companies do not have at their leisure. Multinationals can distribute up their offices throughout several countries where demand for their services and products are high while cheaper labour is available. • Broader Market Base By opening business or offices in several countries, multinationals increase their chances of reaching out to customers on a global scale, a benefit which other companies like limited to regional offices and establishments do not have. The access to a greater value of consumers gives them more opportunities to develop and alter their products and services that will be appropriate to the needs of potential customers.
Some of the retailers even offer additional services when u purchase merchandise from them like gift wrapping and personal shopping consultations to attract new buyers or to detain old buyers. Furthermore, consumer is able to give their thoughts and feedbacks after they purchased their products. The knowledge and skills offered by retailers are key for generating sales, profits, and customer loyalty for suppliers. (Martin Taison 2013) Lastly, retailing business is one of the world widely used marketing channel as it could easily improve the profit of the company and be able to enter the international market. Sales agent doesn’t buy goods directly like a distributor.
Due to the nature of consumerism and materialism another social implication will be the pressure put onto locals by other locals to buy from Costco, as they do not want to be seen as ‘worse’ than somebody else. Because Costco is an extremely large franchise there will be substantial jobs created including but limited to managers, checkout employees and truck drivers. Materialism and consumerism are two large social implications that work in favour of Costco; this is because they offer high quality products at cheaper prices, as they are a wholesale company. This means that families are able to afford their high quality products even if they do not need them. Another benefit of a Costco in this area is that members of the local community will no longer have to travel upwards of 20 minutes to a shopping centre and will have a Costco quite close that will have everything to suit their
The bargaining power of the suppliers in the luxury industry is moderate. Even though these companies have economies of scale emanating from their global operations, most of them use the focused differentiation strategy on the basis of quality. This gives their suppliers some leverage over them because finding suppliers of premium materials in the quantities which these companies procure is not easy. Noteworthy, these companies must consider the time they spend in building their relationships with their suppliers. The bargaining power of the buyers is also moderate.
McDonalds Operation Strategy McDonald‟s make use of an excellent operation strategy in order to gain a larger market share and increases value to the shareholders. The company specially focuses on the speed, standardization, quality, and affordability. McDonalds has moved ahead from the other fast food restaurants by focusing on these factors. McDonald‟s competes on three main bases, such as speed, affordability, and standardization, mainly because they want to make their customers happier. Through the huge market research and surveys, the organization discovered that their customers enjoy the speed as one of the restaurants‟ top priorities.
Defining a nation's trade relations with another country Trade relations for every state are vital because they are a fundamental part of their economic development, where we can see the capacity of each country that has to diversify and maintain stable relations with their partners. More than trade nations I would say international trade, which it's the country's willing to sell and buy products with each other to have better productivity and cost. Most of the economist agree that trade between nations makes the world a better place because in some countries some things cannot be produced, but they have a lot of other, in this way people can enjoy products from other countries. Nowadays there is an International Trade Organization (WTO) charged with monitoring fair trade between countries. Which has several functions among them, in almost any misunderstanding between nations that are exchanging products, serves as a jury and tries to resolve it through negotiations and in the most extreme case that these cannot be determined, can impose sanctions on the country that does not is complying with international trade
Pret can join forces with local producers to source some of their ingredients in other for them to fit into that community. Demand condition: - this is based on how well the business was doing at home, the size and how sophisticated they are, these attributes can help companies to be more competitive, for example when sophisticated home buyer pressure companies to adapt to changes to produce more advanced products to that of foreign competitors. Pret A Manger product is very highly in demand in any country they operate due to the fact that the produce healthier and organic meals for their customer have given an edge from their competitors with the same products. Government: - The government can also play a significant role in the international competitiveness of a business. In addition, it can influence each of the five other forces in the Porter Diamond model.
Specialization by countries can therefore increase efficiency in both how quickly a product is produced and the use of capital. For this reason PepsiCo benefits by saving money in production which means they stand to earn a higher profit margin when goods are sold. Imperfect Markets Theory When factors of production such as labour and other resources are immobile in a foreign country, firms such as PepsiCo can take advantage of this. As a large firm with more information and resources, they are able to enter these markets and exploit them. Product Cycle
Differentiation Companies who accomplish activities at similar cost as their competitive rivals but can add a greater uniqueness that allows them to create more buyer value than their competitors and this gives them the ability to charge a superior price, this is known as differentiation. When we look at Starbucks coffee we can see that they are offering more than just coffee. Starbucks have almost a family bond with their loyal customers. Customers are loyal to the brand and this is what differentiates Starbucks from other Coffee companies such as Costa coffee, Dunkin Donuts etc. Cost