Walmart Case Study

Q 1. Why has Walmart been a successful retailer in US, its domestic market? Describe Walmart’s source of competitive advantage.

Wal-Mart

Founder of Wal-Mart, Sam Walton, started by opening some stores in the Missouri and Arkansas. Although he had big hopes but he never envisioned the success that he would achieve later by founding the retailing empire of the world. He opened his first Wal-Mart store in 1962 which later went public. With the passage of time the business flourished and by 1990 it became the largest retailer. From the very beginning the very aim of Sam Walton was to provide people with best quality products at low price. They achieved all this success by following different strategies but the ultimate strategy remained the same to provide products at a lowest price to their customers. As of 2016 Walmart has above 11000 stores which are currently operating in 27 countries around the world and with a revenue of 485.6 billion it is currently the largest company in the world in terms of the revenue. In US Walmart closest competitor is Target Corporation but because they target more affluent market and focuses on domestic market as compared to Walmart which is expanding in many countries they are very far from Walmart in terms of market share, revenue, profit etc.

Competitive Advantages

Walmart is currently operating within the price leadership category. They are selling many different kind of products to whole lot of different people and at the best prices to maintain their status of price leaders. Walmart deduced that almost all the type of people are somewhat price sensitive so they targeted a bigger market and not just specific kind of people. To target different consumers and to meet the demand of people in an efficient way Walmart have discount stores, supercenters and Sam’s Clubs around the country. Some of the reasons behind their success and to remain price leaders are bulk buying, effective distributor relation and efficient logistics system.

Some of the core competencies of Walmart are on which they form their strategies are efficient and reliable logistics system, their position in the market as price leaders, their work force which is highly trained and enjoy benefits like promotions to keep them motivated, their power over other retailers to buy products at low prices by the way of bulk buying and efficient ways of managing inventory and in the end their distributors which provide them the hassle free service. Wal-Mart has developed an innovative model of supply chain through which it aims to directly connect with the retailer and remove the middle men. This helped cut costs and maintain an efficient system. Through the initiative of Vendor Managed Inventory (VMI) where manufacturing keep a close eye on their inventory and manage their products. This helps Wal-Mart reach 100% order fulfilment on