Walmart is a dominant participator in the retail industry, but it is unlikely that this will remain the case in the near future. There has been speculation that Walmart needs to develop new differentiators because price and assortment of goods is no longer considered a point of difference for the company. In the US market the saturation of supercenters, which has been key to Walmart’s success, has reached an all time high. Natalie Berg, a global research director, was quoted in supermarket.co.za as saying that Walmart “will have to focus increasingly on…previously unpenetrated areas”.

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This issue is directly related to our class lesson where we learned about Porter’s Five Forces. With such a broad industry such as the supercenter industry, there are fewer substitutes and more rivalries evident. The intensity of rivalry within an industry is characterized by the larger number of firms, low levels of product differentiation, and industry shakeout (when new firms enter a market as a result of the potential for high profits). All these factors have contributed to increased competition and the need for Walmart to further differentiate themselves from their competitors.