Askew and Walmart rivalry is one of the cases which displayed the rivalry between sustainable and low cost. Askew which is a family-owned grocery business was forced to make drastic decisions regarding the threats that were posed by the Wal-Mart Superstore which was not specifically a grocery but a store containing various departments among which grocery department is one of them. The coming into the market of Wal-Mart meant competition for Askew is going to increase and therefore they needed to be prepared to handle the new competition if it was to remain in the market. Although the company had purchased land ready for expansion by designing a new building, the looming competition between the two firms was not to be addressed only through expansion but needed more strategies to be laid down. Askew had for long been known as an environmentally sensitive, community-oriented and socially responsible firm and therefore wanted to keep these values in the design of the new products and branches altogether. However, the entry into the market by Wal-Mart which was a low-cost competitor had to be considered in decision-making and design of services. The challenge in of the new competition by the new entrant to the market proved hard for the two companies but also benefited the customer at the end.
Strengths and weakness of Askew and Wal-Mart relative to the local market
The SWOT analysis of Walmart and Askew gives insights on the internal as well as the external forces which are significant to the development of strategy in the retail industry. Although these factors vary between one time and the other, the growth of the two companies depends heavily on the ability of the businesses to capitalize on their strengths and build on their weaknesses. Moreover, in spite of the weaknesses, the strengths are the most significant considerations which can be used to explore the opportunities that are available in the retail market. Strengths can be used to counteract threats to the business and ensure that the two firms continue their leadership in the world of retailing.
Delegate your assignment to our experts and they will do the rest.
The analysis of Walmart’s strengths, weaknesses, opportunities, and threats indicate that the company has a possibility of success in the long term through its global expansion initiatives and aggressiveness especially in retail markets in the developing countries. While carrying out the SWOT analysis of Walmart, it is evident that the strengths of the company are largely associated with its size of business. Such strengths enable the firm to counter the threats locally despite its weaknesses. The strengths are mainly due to global organizational size, global supply chain and the high efficiency of the supply chain. The biggest strength of Walmart is in its global organizational size which gives the company a huge amount of money to fund its growth and expansion both locally and internationally. Its global chain of supply also gives Walmart an upper hand among its competitors as it allows the firm to cope with the market-specific risks. Moreover, the supply chain of Walmart has given the company high efficiency due to the company’s investment in technologies for monitoring and controlling the movement of products from the suppliers of the company to its stores (Lanier, 2014) .
Although the company has lots of strengths, there are also some weaknesses in its business. These weaknesses pose challenges to the ability of the firm to withstand numerous threats which are identified in the SWOT analysis of the company. Most of the weaknesses are directly related to the generic strategy of the company. The use of cost generic strategy by Walmart cause thin profits margins and a business model that is easy to be copied. The thin margins of profit are as a result of the use of cost leadership strategy. Due to the desire by Walmart to minimize its selling prices, it has also caused low profit margins hence the company has been forced to rely more on the sales volume. The strategy also can easily be copied as it lacks uniqueness. Additionally, lack of differentiators except for the size of the business is one of the undoings of Walmart in the retail business.
On the other hand, the opportunities of Walmart are mainly brought about by expansion and the space of improving the business practices to accommodate the changing local customer needs. The opportunities are mainly linked to the local and global economic situation and the human resources situation in the organization which presents aspects which are growth opportunities as well as opportunities for improvement. The opportunities are availed by the expansion into other regions and other countries, improvement of the firm’s human resource practices and improvement in the standards of and quality of items that the company sells to meet the needs of the local customer. The opportunity that Walmart has to expand into other regions is based on high growth in the local economic condition. Moreover, the opportunities presented by HR practices will improve the performance of the company and lead to the increased customer satisfaction. It additionally leads to the overall improvement of quality standards and addresses the needs of the consumer.
The threats to the businesses of Walmart are linked to the retail market condition and the evolving perceptions of the consumers regarding different products in the market. Although this is not a problem of Walmart alone, the company is forced to spend a lot of money trying to satisfy the needs of the consumer and researching on the same.
Askew have almost the same SWOT factors as Walmart. However, one of the biggest strength that Askew has managed to achieve over its competitors is its ability to remain a leader in the market by collaborating with other companies. This has enabled the company to expand and reach many customers through the networks provided by those companies they collaborate with. On the other hand, the human resource practices have given Askew an edge over its competitors as it has managed to retain experienced employees while on the other hand managing to produce quality services for its clients. The weaknesses of the company are however based on the company size which reduces the revenues that would have been used to expand locally and reach more customers. This has led to increased competition which without a doubt has significantly reduced the strength of the company.
With enough funding, Askew can be able to expand not only locally but also to other areas of the world just like Walmart. There are plenty of opportunities available in other regions that need to be tapped into to increase revenues. Although the HR practices within Askew have improved significantly, there is still some room for expansion that can be exploited to improve employee and customer experiences. Although the company has its strengths that have allowed it to remain in the market for long, it also has a fair share of threats to its existence in the market altogether. The most significant threat is the competition that has increased over the recent past mainly from firms that offer the same services such as Walmart. Additionally, just like any other organization in the current decade, Askew faces a challenge with the shifting customer tests and preferences which call for more work to be done to satisfy these needs. The customers in the local market are becoming increasingly knowledgeable hence forcing the businesses to adopt more strategies to research on ways catering to their changing needs.
Responses that can be made by Askew to Wal-Mart's interest in opening a store in Salmon Arm
The desire of Wal-Mart to open a store in Salmon Arm is a competition to Askew and the latter must respond strategically to the steps taken by its potential competitor. Among the ways that the company can respond through is by reviewing its pricing policy and improving service delivery in general. As a larger company, Walmart has many resources such as financial and human resources and can easily outshine Askew in advertising and selling in general. However, to keep up with the competition, Askew can use its small size to interact faster with its customers and build relationships and trust with them. In North America, approximately 80 percent of the population trust businesses owned by families while 52 percent trust public companies. This gap can be exploited by Askew by establishing a good relationship with the population and investing in them (Askews Foods, 2017) . Nevertheless, the firm should invest in its workforce in terms of training to provide unrivaled services that keep the customers coming for more. Although item pricing might appear as one of the best methods of competing with Walmart upon its entry into its territory, it will be the best idea for Askew to focus on sustainability rather than low cost since the reduction of cost can lead to losses that can keep the firm out of business.
The other important response that should be the adopted by Askew is an improvement of human resources in terms of compensation and training. This is important in motivating the workforce and allowing them to work passionately. Moreover, the improved payments are likely to increase the rates of retention and the relationship among the employees and customers. The healthy workplace atmosphere affects the delivery of service and profits. Quality products and consistency are what will save the company from the threats posed by Walmart and lead to more customers being retained. Lastly, since Askew is mainly a food store, it can invest in other businesses which attract customers by allowing them to carry out their shopping under a single roof while on the other hand ensuring that the products it had been offering to its customers remain the same in terms of quality and price.
How the entry of Wal-Mart affects Askew’s position in the market
The entry of Walmart into the same territory that Askew is already enjoying a large customer base and dominance is without a doubt going to be a challenge to the latter in terms of market positioning and revenue. The company should expect stiff competition from its rival and the reduction of revenue as a result. This will reduce the influence enjoyed by Askew in Salmon Arm and may even lead to shifting loyalty of customers to the new store. However, the building of new Park Royal Shopping Center will act as a competing ground which would allow Askew to stand as an innovative leader as it will incorporate wellness center and café that is found in high-end supermarkets. The inclusion of these aspects in the new business will attract more customers and offer deserved competition to Walmart. The entry of Walmart will, therefore, affirm the position of Askew as a leader in business.
As a major grocery in the area, Askew has had no competition and no restrictions in its pricing. However, the entry of Walmart into the area, without doubt, is going to upset the law of supply and demand and prices will drop significantly. This is detrimental to the both Askew and Walmart but the person that will benefit from this is the consumer. The presence of an alternative will force Askew to differentiate itself on either improving on its services with regard to quality or reducing prices to merge those offered by its competitor. On the other hand, the business might be forced to diversify into other areas which are less competitive so that it can compensate for the losses made as a result of the competition. The way in which the new entrant such as Walmart chooses to compete is a critical factor in how its entry will upset the business. Therefore, competition with such a company becomes attractive if Askew identifies a market segment that is not well served by its competitors and capitalizes in such gap by providing a solution to the people that are not served by the existing competitors. However, if Walmart will choose to study all segments of the market and merge its services and goods to the needs of the customer, Askew’s position in the market will be threatened.
Unique factors or issues in the local business environment that the competitors should be addressing
Although both businesses are competitors with a desire to occupy the market and make the best out of their operations, the most important aspect of any business should be addressing the issues and needs of the customers. The needs that should be fulfilled include high-quality goods and services, cheap and affordable products and smoothness in the delivery of services. The competitors are required to research on the needs of the customer and come up with products and services that meet their expectation. The customer feedback should be employed by the two firms to come up with proper strategies that will not only suit them but will benefit the customer as well. Moreover, the two firms despite their rivalry should benefit the local business environment by providing social amenities that benefit its clients.
Assessing the core activities is one of the best practices that every business should take seriously. A starting point of doing this is done through evaluating what the business actually does in terms of its core activities, products it offers to the customers and the services provided. As a way of making sure that the business is successful, it is crucial for the each of the two firms to identify its weaknesses and figure out a way in which they can address them comprehensively to meet the goals of the organization. The questions that must be answered so as to remain in the competition include investigating the best ways of matching goods and services to the needs of the consumer. The goods and services that have proven successful in the market should be identified in addition to those that are not doing well and decide on the improvements that are needed so that those that are not doing well can be enhanced. Consequently, costs and prices of the products should be reviewed regularly to match with the changes in the market.
Assessment of the business efficiency is another critical aspect that determines where the business is headed as well as the environment that the business is operating on at present and in the days to come. The efficiency can be addressed through investing in modern technology and improving the premises to meet the changes that have occurred in the market. People skills should also be a major investment consideration if the business is to adapt to the ever-changing business landscape.
If you were on the Askew’s Board what would you support? David’s plan to develop the state-of-the-art building, a scaled-back version of a new building or no new development? Explain your reasons.
David’s plan to develop the state of the art building for the business is not a bad idea in improving the appearance of the business and attracting more customers to the premise. This idea should be supported as it allows the business to go to new levels. However, if I was in Askew’s Board, the most important thing that would I would have done in addition to supporting the development of a new building would have been a review in the pricing as well as customer service policies within the firm. Moreover, the human resource would have been among the key priority areas that I would have advised the rest of the board members to have a closer look into as it determines how services are rendered by Askew. Additionally, it will be a brilliant idea for the company to tap into the growing online market. It can achieve this by building an interactive web-based shopping portal where the customers can be able to view the available products and decide on which ones to purchase. The portal can additionally allow customers to give their feedback regarding company products and services. This approach will be critical in countering the impact of web based stores which have taken the local customers while also reducing the level of congestion in the shopping center. Conclusively, with a proper approach to its business, Askew can be able to compete with all its competitors both big and small favorably and establish itself as a force in the market.
References
Askews Foods. (2017, 11 29). history.php . Retrieved from http://www.askewsfoods.com: http://www.askewsfoods.com/history.php
Lanier, J. (2014). Who owns the future?. Simon and Schuster.
