Walmart Industry Analysis Essay

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Industry analysis
Porter’s 5 forces analysis
Porter’s five forces analysis is used to investigate the strength of rivalry in an industry so that auxiliary business tactics can be deliberated. It makes use of industrial organization economics to understand the five forces to quantify the appeal of a business. In case all the forces drive down profitability, the approach is through “pure competition” meaning all the firms make normal profits.
Three forces constitute the horizontal competition – the threat of new entrants, rivalry among existing firms, and the threat of substitutes. Threat of buyers and threat of suppliers constitute the vertical competition.
Threat of new entrants: Low
Low entry barriers: E-Commerce has negligible barriers
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It may lead to permission for private investments and FDI in multi brand retail as well. It would exponentially increase the competition allowing Walmart, Target and Alibaba to enter the retail market space. The present political situation is a major boost for the industry and if sustained would act as a positive factor for the businesses.
Economic: For the past decade, the overall disposable income has been on the rise. It allows the customers to make more and more purchases and thus boosting the feasibility of the online market in the first place. Figure 15: Real disposable income in India

Technological: The boom of the internet age which made online market possible in the first place has now started to penetrate deeply into the masses, improving the scope of the industry by the day. Internet enabled cellphones running on Android and Windows OS are available at affordable rates for all socio-economic classes in the country. Apps and websites are on a roll and generating huge revenues for their parent
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