According to the research findings, it can, therefore, be said that examining Wal-Mart’ s recent decision to venture into the organic food market with the Wild Oats brand, CNN reports that the company aims to promote their products on the basis of a unique selling point of competitive pricing. This view asserts that the launch of the Wild Oats brand is going to mark the company’ s achievement of focusing on the price element of the product as these items would be sold at a price which is 25 per cent lower than other organic food product lines which are being sold across the nation, thereby, corresponding with the prices of foods that fall under the non-organic category (CNN).
Before applying the strategic tool of Porter’ s 5 Forces to examine the attractiveness of the organic food industry it is important to establish the components or forces which comprise of the renowned model for strategic management. These forces are that of 1) rivalry amongst existing companies 2) threat of new entrants in the industry 3) bargaining power held by buyers 4) threat of substitute products and 5) bargaining power held by suppliers.
The assessment of each separate factor or force corresponds to a specific determinant which can be identified as an indicator of the industry’ s attractiveness. The first noted determinant which can be incorporated in the discussion to draw conclusions regarding the status of competition in the organic food industry is that of industry growth rates which must be classified for the industry under consideration. According to a report published by Fox News, the present scenario with regard to Wal-Mart’ s organic food business suggests that the retailer is experiencing an increase in sales volume for its product lines, however; the issue of high pricing has limited the scale of this growth potential.
This aspect essentially suggests that because of the issue of pricing the industry growth rates have remained relatively slow as a consequence of which the existence of rival firms is enhancing execution of competitive strategies to achieve designated objectives and goals.
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