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QUESTION 1. HOW ATTRACTIVE WAS THE DISCOUNT RETAILING INDUSTRY IN THE USA WHEN WAL-MART FIRST BEGAN OPERATIONS IN THE 1950s?

The discount stores emerged in the United States in the mids-1950s on the heels of supermarkets which sold food at unprecedently low margins. But how attractive was the discount retailing industry by this time? And what means by attractiveness?
By attractiveness within an industry we mean create value for firms and shareholders or making supernatural profits or, in other words making a return in excess of cost capital.
To analyse the attractiveness of this industry in the mids-1950s the best way is by using the 5 forces framework for industry analysis developed by Michael Porter (1985).


The approach of five forces tries to analyse the attractiveness or value within an industry identifying 5 fundamental competitive forces. These 5 forces determine the competitive intensity and therefore attractiveness of a market.
 FORCE 1: THE THREAT OF......

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