Category Supercenters Case Study

1. Retail Sector

a) Category specialists, or sometimes referred to as “category killers”, are big-box stores that offer a complete assortment of products within a certain category or specialty. In early America only the general store existed, in which customers visited to purchase all their essential living items. As times started to change entrepreneurs looked to gain a competitive advantage by introducing specialty stores that offered a wide variety of goods in a specific category of products. Specialty stores boomed throughout urban America in product categories such as furniture, apparel, and electronics.

It wasn’t until the late seventies and early eighties till we started to see the first big-box supercenters emerge from these smaller specialty stores. During this time companies such as Wal-Mart, JC Penny, and Sears expanded into this new category of stores that is referred to as the “category Killers.” Today, category killers have evolved into massive retail stores that dominate specific merchandise categories, and as a result put many specialty stores out of business.

b) The primary environmental factors that affect category specialist sector include technological, economic, and demographic factors. First, technology can impact a market by helping firms find new and efficient ways of conducting business activities. A change in technology can open the door for new entrants to enter the market, as well as present new advantages among competition.

Second, some retailers are affected by economic factors more than other retailers. Being able to build big-box stores with a deep assortment of merchandise as well as knowledgeable employees is a luxury that only some firms can afford. Consequently, these more su...

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...kets. Globalization continues to be a major opportunity for big-box retailer that should be considered.

Best Buy can learn from Walmart’s use of its supply chain management as well as its globalization strategy to achieve a greater share of wallet. Global markets provide a unique opportunity, especially in the electronic market, to grow brand awareness. Like Walmart, Best Buy can find ways to enter foreign markets and achieve greater economies of scale.

Consequently, Walmart can learn a lot from how Best Buy provides customers with not just a deep assortment of products, but with great customer service and tech support. The Geek Squad service is something Walmart should look to establish in order to achieve better customer satisfaction. If there is one thing that Walmart can learn from Best Buy, its how to implement better customer relationship management.