Business Model Comparison Essay

1323 words - 6 pages

Business Model Comparison

Wal-Mart and Tarket
Wal-Mart and Tarket are the two leading retail stores in the United States with a customer base of more than 100 million shoppers. The stores run their operations in different parts of the United States and their annual posting for revenue accounts for a significant percentage of earnings for retails businesses in the US (Zikmund & Babin, 2013). Together, the stores have a capital base worth billions in dollars. Over the years, the stores have engaged in stiff competition in trying to increase their customer base.
The companies share commonalities for being the only retailing businesses that record growth in times ...view middle of the document...

According to Basker (2007), the management takes responsibility in pricing the company’s commodities. The company also encourages experimentation when dealing with unpredictable outcomes in the market place. Besides selling products online, the stores use direct distribution channels in delivering goods to clients. The automation of services at the company’s stores has made it easy for the management to segments its market based on consumer’s preference. The segments include price sensitive customers, value conscious shoppers and brand affiliates. Lastly, Wal-Mart stores use a cost efficient greenhouse warehouses in the presenting good to customers.
Business model of Tarket
At Tarket, the management utilizes a merchandising communication technique when advertising their products in the market. In comparison to Wal-Mart’s display, Tarket stores are neat and goods presented in a more enticing manner. The stores resemble a departmental store where goods. Unlike Wal-Mart, Tarket rarely uses cost-cutting strategies in stamping their authority in the market place. Tarket focus on delivering high quality product to customers. The store has the competitive advantage of selling upscale and trendy products. Besides differentiating products for consumers in the marketplace, the organization uses discretionary sales in increasing the profits. The practice differs from Wal-Mart’s strategy of lowering prices to increase sales (Zikmund & Babin, 2013). Tarket has built its reputation as a global brand by supplying goods that meets the needs of young shoppers in the American market. Lastly, the organization engages in philanthropic acts in different parts of the globe besides selling gift cards to trendy shoppers.
Forms of ownership Wal-Mart
A board of 15-members directs operations at Wal-Mart. The board makes decisions on behalf stakeholders who elect the members of the board on annually. Employees and 5% of the owners of the company hold 51% shares at Wal-Mart. Mutual Fund Owners and other institutions own 30% shares at Wal-Mart.
Forms of ownership Tarket
Outsiders have a large stake at the company and they can influence the decision of the management when it comes to expansion of operations. Interestingly, insiders and 5% of the owners hold 0% shares at the company. In contrast to Wal-Mart, mutual fund owners own the majority of the shares. They hold 88% of the company’s shares.
The benefits associated with each model
Wal-Mart’s model
According to Basker (2007), Wal-Mart model is best suited for increasing sales of the company on a short-term basis. The model allows the management to incorporate a combination of strategies in running the operations of the company. Consequently, the approach at Wal-Mart encourages the management to monitor the activities of the company’s competitors. It is also easier to make adjustments at Wal-Mart (Basker, 2007). At Wal-Mart, the management can choose to negotiate with suppliers to reduce the prices of...

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