Walmart

Companies in the Strongest/Weakest Positions

Walmart

Wal-Mart is the world’s largest retail company in the world with 135 billion dollars in sales in 2011.1 The company offers products through three different retail formats including USdicount stores, neighborhood markets and 2,612 supercenters (Datamonitor 21). Wal-Mart also sells products through ecommerce websites including samsclub.com and walmart.com (Datamonitor 21).

Wal-Mart has been working towards increasing the scope of the grocery segment over the past six years. In fiscal 2006, the sale of groceries made up 39% of total revenues of the stores, while that number has grown to 54% in fiscal 2010 (Ibisworld 30). With these increasing numbers, the company is the biggest external threat to grocery market.

The everyday low prices (EDLP) strategy is what allows Wal-Mart to be a leader in the industry (Datamonitor 21).The EDLP is a pricing strategy employed in order to ensure customers the lowest prices along with the convenience of having a broad scope of products. Wal-Mart is able to offer low prices to consumers as a result of the buying power of the company. In order to distribute the large quantity of product purchased, Wal-Mart controls 121 distribution centers across the US, with 106 of them owned by the company (Datamonitor 21). This distribution network enables Wal-Mart to vertically integrate along the supply chain and effectively cut out the middleman. As a result of the low cost and large quantities Wal-Mart is a major leader in the grocery market.

Kroger

Kroger is a leading retailer in the US, operating many brick and mortar retail stores and ecommerce through its website, Kroger.com. Founded in 1883, Kroger has expanded into a $70 billion company (Ibisworld 24). The company operates over 2400 grocery stores which are run under 16 different names. Approximately 68%of the Kroger grocery stores are large supermarket format stores yet the company also operates nearly 700 convenience stores as...