Industry Analysis Example (Porter’s Five Forces and Complementors) Wal-Mart

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This industry analysis focuses on Wal-Mart’s competition in the consumer retail industry, examining its position relative to industry forces. The potential for new competitors entering the market is medium, as entry barriers are high due to Wal-Mart’s distribution system, locations, brand name, and financial capital. Rivalry among established companies is medium, with Target being the strongest competitor. The bargaining power of buyers is low, although consumer advocate groups have criticized Wal-Mart’s pricing strategies. The bargaining power of suppliers is low to medium, with Wal-Mart having significant market share and some large suppliers having more bargaining power. Substitute products have low pressure, with few alternatives offering the same convenience and low pricing as Wal-Mart. Complementors have low pressure, with Sam’s Wholesale Clubs complementing Wal-Mart’s business model. Overall, Wal-Mart has a strong position in the consumer retail industry, with few significant industry forces threatening its market dominance.

Table of Content

A summary of an Industry Analysis for Wal-Mart cases, specifically examining its competition in the consumer retail industry and excluding other industries it competes in. The main objective is to assess Wal-Mart’s position within the industry by analyzing various forces.

Potential Competitors: Medium pressure

Despite the obstacles, grocers have the opportunity to enter the retail industry. However, Wal-Mart’s outstanding distribution systems, strategic locations, well-known brand name, and substantial financial resources deter competitors. As a result, Wal-Mart typically maintains a clear cost advantage over other rivals.

Rivalry among established companies: Medium pressure

Wal-Mart faces competition from Sears, K-Mart, and Target in the market. Among these rivals, Target stands out as the most formidable retailer with its unique position and notable growth within domestic markets. However, Sears and K-Mart have lagged behind their competitors and pose little threat. Overall, it can be inferred that the industry is in a mature life cycle.

The Bargaining Power of Buyers: Low pressure

Despite criticism from consumer advocate groups regarding Wal-Mart’s pricing strategies and the limited influence customers have over the company, choosing a competitor with similar products and prices may require giving up the convenience of shopping at Wal-Mart.

Bargaining Power of Suppliers: Suppliers exert a moderate level of pressure.

Due to its large market share, Wal-Mart has a considerable advantage in attracting business from manufacturers and wholesalers, which gives the company significant power. This power allows Wal-Mart the option to vertically integrate and also intimidates suppliers who may consider switching to another retailer. By partnering with major suppliers like Proctor & Gamble and Coca-Cola, Wal-Mart further strengthens its bargaining power. However, smaller suppliers face a different situation altogether.

Low pressure Substitute Products

In this market, there are limited alternatives for convenience and affordable pricing. Speciality stores offer desired products, but not the low prices of Wal-Mart. Online shopping provides another option where customers can benefit from competitive prices due to the absence of physical stores, resulting in cost savings passed on to consumers.

Complementors: Low pressure

One complementor that is associated with Wal-Mart is Sam’s Wholesale Clubs, which is owned by the same company. Sam’s Wholesale Clubs complements Wal-Mart by offering the same products in wholesale form, ultimately contributing to the company’s profitability. In order to attract customers, suppliers must provide innovative products. Generally, the presence of complementors does not significantly impact Wal-Mart’s business model.

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Industry Analysis Example (Porter’s Five Forces and Complementors) Wal-Mart. (2016, Jul 09). Retrieved from

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