Question

In mass retailing, big-box companies like Walmart, Best Buy, and Sears are

A) gaining competitive advantage over smaller stores.
B) participating in a dramatic shift to becoming bigger.
C) increasing the square-footage of their retail locations.
D) finding that less brick and mortar is better.
E) noticing a sharp decline in online purchases.

Answer 1

Big-box retailers are adapting to the competitive landscape by analyzing the success of Amazon's business model that leverages economies of scale and technology. While they may be evolving in different ways, it's key to focus on how they compete with online giants rather than focusing on store size or brick and mortar presence alone.

Step-by-step explanation:

In the context of mass retailing, it's critical to understand the competitive dynamics between big-box companies like Walmart, Best Buy, and Sears and smaller retail stores. When assessing their current strategies and market position, it is not accurate to say they are exclusively gaining a competitive advantage (although this may be true in some aspects), shifting to become larger, increasing the square footage of their locations, or noticing a decline in online purchases.

From the information provided, we can compare these retailers to the model that Amazon has utilized, which emphasizes the importance of economies of scale and the use of technology to achieve lower costs. The impact of Amazon's approach manifests in their pricing and the efficient use of their distribution network, with highly computerized warehouses located in low-rent areas globally. This method allows Amazon to offer competitive pricing and convenience for customers, which big-box retailers must adapt to in order to remain competitive.

Therefore, while the options suggest various strategic moves for big-box stores, it is most accurate to consider how these companies are adapting in response to online retail giants like Amazon that use economies of scale and technological advances to succeed. Walmart, for an example, has increased its online presence and invested in its own distribution network to compete more effectively with e-commerce platforms.

Answer 2

Big-box companies in mass retailing, like Walmart and Amazon, maintain a competitive advantage over smaller stores by employing economies of scale, advanced technology, and cost-effective distribution models to offer lower prices and convenience.

Step-by-step explanation:

When analyzing the impact of big-box companies like Walmart, Best Buy, and Sears in mass retailing, it is evident that they are leveraging their scale to gain a competitive edge over smaller stores. These retailers have employed a business model similar to Amazon's approach, using large economies of scale through expansive warehouses and advanced technology to reduce costs and undercut competitors. In contrast to increasing the square footage of their physical retail locations, these companies are emphasizing the efficiency of online sales and large-scale distribution models. This strategy can undercut local businesses that do not possess such advantages, as seen in the case of Wal-Mart and its impact on small-town economies. By exploiting the significant advantages of economies of scale, which include large, computerized warehouses and cost-effective production models, big-box retailers are able to offer lower prices and convenience that challenge smaller retailers and reshape the retail landscape.