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
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