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They have a reputation for industry leadership, and are widely considered by the public to offer the lowest prices. This message has been consistently reinforced in Wal-Mart's promotions.
Of these advantages, buying power is truly sustainable. Wal-Mart's size gives them this advantage, and there are no serious threats to their size at this time. They were able to achieve their size in an era when the discount retailing business lacked concentration. Now, there is more concentration in the industry and Wal-Mart's size seems defensible over the long-run. Their ability to move volume is not something that their competitors, even large ones such as Target, can match.
Another trait that is a source of sustainable competitive advantage is the Wal-Mart brand. The ubiquity of Wal-Mart means that there are strong associations with the brand. The most important of these is the association with the lowest price. One of the most significant, defining characteristics of the discount retailing business is the low cost proposition it presents to consumers. It is considerable competitive advantage for Wal-Mart to be viewed as the home of lower prices. Yet, this association is so strong amongst consumers that Wal-Mart would need to lose its cost leadership...
Other retailers can develop a culture of cost reduction. Other retailers can develop similar it systems and satellite networks. They can replicate Wal-Mart's logistics systems as well, and organize their stores just as effectively. With enough care and money, most of the tactics Wal-Mart uses are replicable. But Wal-Mart builds its success not through excellence of one or two things, but of excellence at many things. This is where Wal-Mart has been able to find differentiation in a largely undifferentiated industry.
But while individually none of these advantages in inherently sustainable, Wal-Mart does derive sustainable competitive advantage from the package of all of them. Wal-Mart is, operationally, stronger than its competitors on almost every level. A competitor may match Wal-Mart on one or two operational aspects, but they would have difficulty matching all of them. Wal-Mart has built excellence into so many areas, that overall they do have a sustainable competitive advantage. It would be very difficult, and almost certainly cost-prohibitive, for any competitor to best Wal-Mart in all areas.
For Wal-Mart, cost is the sole determinant of their purchasing policy. In terms of production costs, other countries have a competitive advantage over the United States. China, for example, has a technology level almost equivalent to the United States, which enables it to produce reasonable-quality goods. Their advantage, however, lies in labor costs. The average Chinese worker makes $100 per month. American factories simply cannot compete with that in
Wal-Mart may find that it is not able to "rollback prices" to compete with discount underwriters. One key opportunity for Wal-Mart is to focus on social welfare to improve their stature within the various communities Wal-Mart is located. Problem Definition As was stated at the outset Wal-Mart is one of the most reviled corporations within the United States. For the various reasons previously stated, Wal-Mart has attained a vastly negative reputation
Wal-Mart Inc. Wal-Mart is an American-based multinational discount store, currently operating more than 11,000 retail outlets in 27 different countries, and serving approximately 140 million customers weekly. Headquartered in Bentonville, Arkansas, Wal-Mart grew from a small family-managed retailer in 1945 to the world's largest retailer, and was named the world's largest company by revenues in the 2014 Fortune 500 list. The company operates its retail stores in two forms: i) Sam's
Wal-Mart's SWOT Analysis and Generic Business-Level Strategy Walmart's SWOT Analysis Wal-Mart's SWOT Analysis and Generic Business-Level Strategy Wal-Mart's SWOT Analysis and Generic Business-Level Strategy Wal-Mart Wal-Mart is the world's leading corporation in the retail industry. It operates in 27 countries of the world with 69 well-recognized brands. With this huge scale of operations and vast business network, Wal-Mart serves a large number of customers with numerous product categories in its retail stores, departmental stores, and
Wal-Mart: Financial Statement Analysis WAL-MART FINANCIAL STATEMENT ANALYSIS Company Description Wal-Mart Stores Inc. (WMT) is a world largest grocery chain and retail stores. The company operates 8000 stores across three business segments which include apparel, groceries, electronics and small appliances. While the company operates globally, half of the company stores are located in the United States. To complete in the international markets, Wal-Mart also operates its business through subsidiaries in Canada, Argentina, China,
Wal-Mart's Strategic And Financial Planning: Since its inception about 50 years ago, Wal-Mart has continued to remarkable growth as a firm that focuses on providing customers with a wide range of merchandise at great prices. In its initial years, the company only operated in one store that has contributed to changes in the way retail works. Currently, the firm operates over 10,000 retail units within 69 distinct banners in 27 countries