Walmart Fixed Costs

They receive much of their in-store goods from Budweiser, Frito Lay, and Coca-Cola, who in turn provides delivery services directly to stores. Bargaining Power of Buyers Low brand loyalty and minimal switching costs make the bargaining power of buyers high. Buyers make the decision to patronize other businesses when the opportunity to pay lower prices, presents itself. They are more susceptible to spend money where they can be a part of a loyalty program and receive a benefit from their purchases. Major

• Though profitable, slower growth in sales • Strong brand awareness • Share market with recognized competitors Value chain analysis is one of the fundamental elements of chain analysis. In order to analyze the environmental aspects of Costco, PEST analysis will be used. The PEST analysis covers the analysis of Political, Economic, Social, Technological environments of a country with reference to a specific object. The Costco Warehouse Corporation’s PEST analysis as follows: Political Costco Wholesale Corporation’s business practices get influenced by the political environments of the host and the home countries where it carry outs its business. The company is providing high wage rate to its workers as a result of its agreement with the union bars and it has set different standards for its workers in its stores in spite of the political policies of a country.

Kroger would be Walmart’s direct competitor. After Walmart Kroger is the second largest retail store. A strategy for Kroger is that they are able to offer private-label products, keeping prices low, as well as offer more product variety to its customers compared to Walmart. This strategy attracts high-income customers and generates higher revenue. The chain is renowned for excellent its customer service, loyalty program, and extensive

Consumer income Consumer income is in the wider field of economic factors that affect the sales level of the enterprise. Consumers with high income are likely to possess the power and the ability to purchase products from the company in large quantities. Often, individuals with higher income have flexible regarding purchases considering that they have enough financial power to use on basic needs and to save. As a result, such individuals are expected to buy the company products in bulk or more frequently irrespective of the price of the products. On the other side, low-income earners are not expected to purchase the company products in bulk or frequently.

The tire manufactures sells to variety of buyers such as small tire dealers, manufactures of automobiles. However Cooper Tire focuses on replacement companies such as Pep Boys and Auto Zone. The power is in the hands of the large retailers, because they are purchasing a large order of tires that they could just as easily purchased from another tire manufacturer. However, if a large number of their customers wants Cooper Tire then would their bargaining power would be reduced. 5.

Organization may charge more money to customers for their products and services. If government imposes low taxes, firms want to invest for many sectors which create job for people. Central bank controlled the monetary policy. Monetary policy has effect not only on the business organization but also the entire economy. It is the ability to obtain credit.

Membership may be a good way to do this. New opportunities mainly come from power of suppliers and inter-firm rivalry. Wal-Mart should utilize its bargaining power with suppliers to lower its costs. In that way, it may provide high quality products for its consumers. It may also grow stronger and more unique through competition between firms in the same industry.

If there are perfect mutual substitution products of different vendors we say that it is a pure oligopoly, and if the mutual substitution of their products is imperfect, it is a differentiated oligopoly (Perloff, 2012). Oligopolists can noticeably affect the market, but in doing so he is compelled to take into account the reaction of the masses of customers and on the reaction of its competitors. Oligopolies usually occur in heavy industry, in the production of steel, mineral resources, oil, cars, aircraft, computers and other products. Companies that produce a significant portion of output often become major players because they can produce more efficiently than small businesses and use the effects of economies of scale. Since each firm in an oligopolistic market has a relatively

One way to describe internalizing is when multinational corporations do transactions inside their own company. There is lots of reasons why internalizing is profitable for example if transaction costs are high internalizing might be a good solution to lower costs. Competition in the market is intense because there is so many companies that produce same kind of products and are competing over the same costumers. One competitive advantage is low price but that also means if company wants to make profit they must also have low costs. Following text is about two multinational corporations Gillette and Starbucks corporation that have internalize their operations.

For example, the automotive industry, electrical equipment industry, and canning industry in the United States are controlled by several companies. The appearance of the oligopolistic market is mainly attributed to three reasons. First, due to the economies of scale, that is, manufacturers continue to expand production scale, and the market is relatively small. The second reason is due to the barriers to entry. The government grants monopoly power to certain enterprises in the industry through laws and regulations, and at the same time, it imposes certain controls on it