Question

In: Economics

Walmart's competitor at Canada level and international level . example Costco vs Walmart at Canada level...

Walmart's competitor at Canada level and international level . example Costco vs Walmart at Canada level . international level any other example . how Walmart is better than them and what are challenges of competitors Walmart is facing . must includes all these points with sub heading (800 words minimum )

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Expert Solution

Answer: Walmart is better than its compitators because of the following reasons:

  1. Big Box stores: Walmart has huge superstore which attract customers with its single-serving options unlike its copitators.
  2. Advertising: Walmart spends an incredible amount each year on advertising. which results in mass reach of audiences and brand showcase. and due to this Walmart achieved the things 20 years ago though everyday low prices advertisemnet than what his compiators has achieved now.
  3. Customer Loyalty: Walmart is trying to woo back its customers with new products like an Amazon-style free shipping pass, in-store pick-up options, curbside delivery, and improved in-store customer experience, Walmart plans to instill loyalty in their customers. With shopping at Walmart becoming more convenient and pleasant.
  4. Low Prices than its compitators: The economies of scale that Walmart has achieved allow it to provide lower prices than its competitors

The challenges of copitators walmart facing are as follows:

  1. Staffing cost: Walmart has faced issues with its employees involving low wages, poor working conditions and inadequate health care. The cost of increasing the average wage to match Compitators and providing full-time hours to whoever wants them and providing benefits is way too economically risky for the company.
  2. Low Prices: Walmart, though, has a huge network of stores that must constantly receive deliveries. but it can’t possibly drop its prices to Costco’s level because of its subscription business model. The reason Costco can cap its margins to a mere 10% is that it makes money every day by selling its memberships.
  3. High advertising cost: As walmart spends an incredible amount each year on advertising compare to its compitators. For example ,Costco relies on mailer promotions for its members and word-of-mouth advertising. However, Walmart is trying to cut back on its advertising. Once it improves its reputation as a safe, welcome, and inexpensive place to shop, Walmart too will be able to rely on word-of-mouth advertising.
  4. lawsuits from employees: Wal-Mart implements a strategic predatory pricing tactic in that they drop prices too low and drive away competition, thus gaining a monopoly. This is an unethical and aggressive way to conduct one of the world's largest corporations.
  5. Thin Profit Margins: Thin profit margins are a typical effect of using the cost leadership strategy. Because Walmart minimizes selling prices, it also needs to minimize profit margins and rely more on sales volume.
  6. Easily copied business model : The cost leadership strategy also makes Walmart’s business model easy to copy.
  7. Competitive disadvantage against high-end specialty sellers : The firm does not have significant competitive differentiators, except for its business size and prices. Furthermore, high-end specialty retailers have the upper hand in attracting quality-seeking buyers who have low sensitivity to price.



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