Company strateg and competitive advantages analysis

Ziqin Lan MGMT 450-130

Big Lots

Executive Summary

Big Lots is a retail company that founded by Sol A. Shenk in 1967 in Columbus, Ohio, both their local and online stores sell a variety of goods, including furniture, electronics, toys, food and household supplies. The company used to call Consolidated Stores Corporation, it opened its first closeout called Odd Lots in 1982 and was bought by Revco in 1983. After Consolidated Stores Corporation had acquired and purchased few corporations, they changed its name to Big Lots and decided to focus this brand. Until now, Big Lots has more than 1,400 stores in 48 states of United States and stands out to be one of the “Fortune 500”. I choose to analyze the company by assembling a good picture of the company, including external analysis by interpreting PESTEL Model and core five, internal analysis by understanding SWOT explain to explaining the company strategy. Furthermore, I will explain what the company's competitive advantages are. By having acknowledged on how Big Lots is doing well in recent years, I will provide strategic recommendations on what they need to do in future to strengthen its competitive advantages.

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Strategic Analysis

External:

• PESTEL MODEL (Economic – Big Lots as a closeout store, price tends to be lower than competitors; even during economic crisis, it won’t affect too much)

• CORE FIVE (Threat of entry – since their price is already lower than few competitors, wholesale stores opening around Big Lots could be a threat to them; power of buyers – Big Lots’ competitors may gain brand loyalty over Big Lots, they have to figure out way to gain more by making strategy plans; Competitive industry structure – their strong competitors Walmart as the largest companies by revenue in 2016 (1.global 500) Big Lots may have issues with competing with Walmart. Like I mentioned before, brand loyalty matters.

Internal:

SWOT

Strengths

Big Lots as one of the most well-known retail company in the world, especially in the United States which is their strongest point. This recognition won a good reputation for them, and bring them more customers, loyal customers. On the other hand, their pricing strategy attracts numbers of people; due to the excess inventory of goods constitute most of the products, their goods most likely would be discounted.

Weaknesses

The company mainly sells overstocked products which mean they probably will not stock the same products again. Once a customer purchases the product, it might not be found again. In this case, this could make them lose sales and customers.

Opportunities

Strategic Summary

Having online stores, and often provide discounts and free shipping

Lower price

Buzz Club Rewards: free; coupons; special offers)

Strategic recommendations

Keep what they do in online stores

Keep Buzz Club Rewards, and maybe provide more discounts or events for customers

Sources used:

1. http://fortune.com/global500/

2. http://www.biglots.com/