Competitive responses to Walmart’s entry into South Africa
Date
2014-01-14
Authors
John, Lou-Anndree
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Abstract
Walmart’s entry into South Africa is an example of global expansion that best
illustrates the impact of a new market entrant on competitive strategy and
industry structure.
The research explores the evolving nature of strategy and the forces that
contribute to strategy formulation and development, with specific focus on
competitive dynamics and industry structure. Building on this foundation, the
study determines the impact of a new entrant on the competitive dynamics and
industry structure, and thereafter examines the responses of competitors to the
threat of a new entrant in the market.
The results of this study and thematic content were extracted from a series of
semi-structured interviews conducted with retail analysts, market portfolio
managers and senior management from companies within the retail sector in
South Africa. This source of data was further supplemented with market
research reports, written business media and, advertising and promotional
campaigns.
The findings of the study support the premise that strategic responses of
competitors to a new foreign entrant in the retail industry in South Africa are
influenced by:
a. The competitive landscape as this is shaped by current and forecasted
changes on the industry structure in retailing and the macro-environment
in South Africa;
b. Strategies employed by established retailers to sustain their profitability
and market share;
c. The Walmart-Massmart alliance, which introduces a new capabilities the
alter the competitive dynamics; and
d. The changing industry structure and macro environmental factors that
affects profitability and market share.
The entry of a dominant global retailer in a mature, well established industry
therefore alters the competitive dynamics and invariably influences strategy
Description
MBA thesis
Keywords
Retail industry, Walmart