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MGMT3030 Walmart assignment

Assignment 3 o o Using Walmart and the 5 Forces model, discuss the power relationship positions of Walmart Canada. Each of the 6 forces shall be clearly identified (i.e. have a heading), and discussed within roughly one hundred words. o I suggest that you view the video of M. Porter. You might need to do a brief research to better understand the position of Walmart Canada. document the sources used

1. Rivalry among existing firms New entrants to an industry bring new capacity, a desire to gain market share and substantial resources. Number of competitors (#? co's 50% MS, ratio MS #1/#2). Rate of industry growth (slow growth = price war). Product or service characteristics (differentiation). Amount of fixed costs to total operating costs. Capacity (level of utilization). Height of exit barriers (prevented from exiting). Diversity of rivals (source of funds, know-how, etc.). Battle for market share, including profits amongst co's.

2. Bargaining power of suppliers Ability of suppliers to raise prices or reduce quality. Industry is dominated by a few companies. Unique product or service. Substitutes are not readily available. Ability to forward integrate. Unimportance of product or service to the industry. Battle for available profits along the supply chain.

3. Bargaining power of buyers Ability of buyers to force prices down, bargain for higher quality, play competitors against each other. Large purchase. Backward integration. Alternative suppliers. Low cost to change suppliers. Product represents a high % of buyer's cost. Buyer earns low profits. Product is unimportant to buyer.

4. Threat of new entrants - entry barriers An obstruction that makes it difficult for a company to enter an industry. Economy of scale (learning curve). Product differentiation (brand name - key characteristics). Capital requirements (large financial requirements). Switching costs (cost to change process; tech. std.). Access to distribution channels (reaching customers). Cost disadvantages independent of size. Government policy (Ontario's with Samsung Energy).

5. Threat of substitute product Potential that a new and innovative product will substantially affect the volume of business by switching buyers (i.e. customers) from the existing type of product. Ease with which a different product can satisfy the same need. Best examples are: Polaroid • Kodak In a few years, students will not have heard of them.

6. Other stakeholders o This point was added later on to encapsulate other stakeholders that might have an impact on the organization analysed. In some industries, unions can apply major pressure on organizations. A potential key stakeholders is the government; provincial or national, which can dictate the behaviour of an organization through regulations. Another potential key stakeholder can be any NGO (Non-Governmental Organizations) that can apply forces on the organization through a public campaign.