1. What are four to five ways that specialty retailers differ from discount retailers (a la Wal-Mart)? Inventory Turnover: According to data provided in the Williams-Sonoma Inc. case study (1990), the average turnover of specialty stores was just under 2x. If you look at the data from Wal-Mart Article discount stores, a lot of them have transformed, they're actually around 8x. Margins: Discount stores like Wal-Mart choose the high-volume, low-margin approach. Since their entire approach revolves around offering low prices, this goes hand in hand with low margins. Customer Service: Specialty stores focus on offering customer service. Selling their offerings at high prices and with high margins requires a high level of customer support and service from the sales force. Customers feel they deserve and pay for knowledge and service when they shop at stores like Williams-Sonoma. Atmosphere/Experience: When someone walks into a specialty store, they are sold on a concept. A specialty retailer selling high-end products wouldn't prevail if its physical stores had the feel of a Wal-Mart, for example. Wal-Mart's concept is a wide selection at low prices. Likewise, Wal-Mart's customers would likely question the concept of low prices if they entered a store with displays and fixtures similar to those at Williams-Sonoma. Williams-Sonoma also sells style, that is, a lifestyle. Discount retailers, however, are not; they are selling the concept of wide choice at low prices.2. What is the main force influencing the company (Porter)? I believe Williams-Sonoma's main competitive strength is the fight for position. Williams-Sonoma is constantly at odds with the competition. The company must carefully monitor the competition and continually fight to gain market share. Department Stores: According to the case study, department stores maintained significant purchasing power over wholesalers and manufacturers. These chains have also made strides to improve operational performance and have also reduced margins to boost sales. This poses a threat to Williams-Sonoma. Specialty Stores: These competing retailers pose a variety of threats to Williams-Sonoma. According to the case study, these stores expanded faster than Williams-Sonoma's. This has forced the company to compete with or even lose prime real estate positions in malls and other shopping locations. Furthermore, by increasing the share of imported and unbranded merchandise, they were able to improve margins faster than Williams-Sonoma.