Market Opportunity Analysis - Walmart Essay Example | Topics and Well Written Essays - 3000 words

Market Opportunity Analysis - Walmart - Essay Example Changing demographic data such as growing population, ethnic diversity, income, percentage of single parents and percentage of people living in metropolitan triggers four prospects—more food for growing population, more easy-to-prepare foods for single parent households, more variety of products for diversified people and more upgraded foods for individuals with higher incomes. (Umberger, Thilmany and Ziehl p9-13) Nowadays, consumers are changing their buying patterns to be online because of lower prices and available 24/7. Consumer tastes can be different based on another demographic factor: age. For example, consumers under 35 years old are most likely to be interested in domestics (73.3%), lawn & garden (71.4%), stationery (66.7%), personal care appliances (65.5%) and glasses and dishware (60.0%). (Negley) And the willingness to switch brands also depends on the age groups—for instance, consumers over 50 years old have strongest loyalties. Jennifer Negley also claimed that the loyalties of consumers were falling down. It could be seen in groceries and canned food products which possessed 84% loyalty in 1993 and shifted to 73% in 1997. Wal-Mart, the largest retailer in the world, is operating in the highly competitive retail industry in both local US market and international market. Wal-Mart Stores, Inc. is based in Bentonville, Arkansas, and comprises of four separate retail segments namely Wal-Mart Supercenters, Discount Stores, Neighborhood Markets, and SAM’S CLUB. As of January 31, 2010, the company operated 2,612 Supercenters ,891 Discount Stores, 153 Neighborhood Markets and 602 SAM'S CLUB warehouses and in the United States. (Wal-Mart Annual Report, p 14) There are 3,615 Wal-Mart units outside US including countries such as Mexico, Canada, Brazil, UK, China and Germany. The retail products available at Wal-Mart include general merchandise such as household goods, apparels, jewelry, health & beauty products, electronics, toys, fabrics, shoes, garden appliances and crafts. Along with other retailers in the industry like Kmart and Sear, Wal-Mart is facing the changing consumer buying patterns and prefere nces. The essence of Wal-Mart’s success is its ability to purchase a huge amount of goods and re-sell them to customers with lower prices. It also intends to sell quality products at the same time. So, it would be a high risk if it could not predict correctly on which items to be purchased to meet the changing consumer tastes. As we learned that consumers from different places prefer separate items, it may affect on setting localization strategy for each international unit. Next, as Wal-Mart is selling many products across several product lines, it is more inflexible to change compared to its competitors who only focus on one or two product lines. If consumers change their tastes in one product line, the competitors can adapt with customers’ preferences more easily than Wal-Mart can. Moreover, it is vital to catch up with changing consumer’s online behaviors for the effects can be critical for how Wal-Mart’s online store should be shaped. 2. How well are these changes in customer tastes and preferences being reflected in competitive strategies in the industry? Changes in customer tastes and preferences are reflected in competitive strategies pursued by different retailers in the industry. Competitive strategies help an organization to build a competitive advantage which is the result of having superior performance over competitors. (Hill) And that advantage makes a