The People

Wal-Mart and 7-Eleven are both distribution companies, but they apply different distribution policies. First of all, Wal-mart is the owner of all its stores, while a third of 7-Eleven’s stores are franchises. Their stores differ by their location, size and assortment. 7-Eleven opted for small in-town convenience stores (just over 1000 square feets), and Wal-Mart chose to replace most of its small stores by high capacity Supercentres outskirts of cities (between 170,000 and 200,000 square feets). 7-Eleven wanted to ensure a minimum presence of 50 stores in a area, while Wal-Mart’s Supercentres attracts customers from a wide area. 7-Eleven sells mainly food goods, but Wal-Mart sells all kind of products, such as toys, electronics, grocery goods, books, clothes or even pharmacy drugs. 7-Eleven’s small store size requires each product Performance attributable to industry attractiveness

Retailers purchase merchandise from manufacturers in large quantities for resale to consumers at a profit. The domestic Retail Store industry is mature and highly competitive.

We can use the Porter’s five forces analysis to assess the attractiveness of Retail industry and its profitability in long run:

Threat of New Entrants

The number of independent retailers has been decreasing over the years; most of the retailers are chain stores nowadays. The vertical structure and centralized buying of the existing chain retailer established a competitive advantage that stops independent retailer to enter the industry. Also the difficulties for independent retailer to find favorable suppliers, rents and be competitive block the road for new entrants.

Bargaining Power of Suppliers

Suppliers have very little bargaining power in retail industry. Big retailer such as Wal-Mart have always been exploiting suppliers, a contract with WM can either make