Walmart Software Manager Case Study

Wal-Mart Case Study

Would improving economy and negative image derail Wal-Mart? Wal-Mart, the largest retail company in USA, has been successful playing its low cost strategy in the current challenging economic conditions. Wal-Mart’s corporate strategy has been upheld by four pillars. Dominance in the retail market through cost leadership, expansion in the U.S. and international markets, creation of positive brand and company recognition and branch out into new sectors of retail such as pharmacy, automotive repair and groceries. Wal-Mart has been highly successful in all these four strategies by following practices such as aggressive hospitality, affiliations with charities, sundown rule (answer customer and supplier queries within 24 hours) and Ten-foot rule (greet, smile and attend a customer when within 10 feet in a store).

Porter’s Five Forces

Competition between the rival companies: Wal-Mart faces tough competition in the international market from the top 3 retail companies Intermarche, Promodes and Carrefour, which challenged its global expansion. On domestic front, Wal-Mart is challenged by online retailers such as Amazon.com, upscale product retailers such as Target and bulk discount warehouse retailers such as Costco.

Threat of new entrants: Domestically, the threat for new entrants is very low for Wal-Mart due to its cost leadership and broad differentiation. However, internationally, there are a lot of new entrants in the retail market.

Substitute products: As the retail industry sells products of daily common use, there are no direct substitutes; Lower quality and low price chains such as Dollar Tree, Dollar Stores provide some alternatives.

Suppliers: Wal-Mart always has great bargaining power with its suppliers due to its large volume of business. As the products are more or less standardized in nature, retailers and wholesalers have low