Competitive Advantage of Walmart

4. Relations with Suppliers- Wal-Mart has in place a system that helps to achieve their goal of lower prices. This Information Technology system includes computers, networking, and internet that cuts inventories and waste and helps with speedy delivery. This system also helps Wal-Mart to keep in constant contact with suppliers by transferring the data that suppliers need so they know what Wal-Mart needs. Wal-Mart also works with suppliers to improve their production and squeezes the best prices out of its supplier. The video referred to Wal-Mart as the customer’s agent. All of this focus Wal-Mart puts on suppliers reduces costs and lowers prices. Wal-Mart’s technological/logistical leadership remains unmatched by competitors (Web, 2005).

|Our above analysis shows that Wal-Mart clearly has a competitive advantage over its peers in most of the segments it operates in. However, our analysis elaborated below demonstrates the following key |

Walmart 's competitiveness can be expounded in terms of Porter 's five forces model very well. In order to analyze the industry environment logically, Porter 's five forces model should be the main analysis guide. This model includes threat of new entrants, threat of substitute products or services, bargaining power of customers (buyers), bargaining power of suppliers and intensity of competitive rivalry. Here we focus on the five aspects to analysis the environment of retail industry and Walmart 's situation in this industry environment.

Like all departmental and/or discount stores, Wal-Mart's strategies are focused around achieving the goals such as building a large and strong customer base, under-cutting competitors, and organization of its supply chain in the most efficient and effective manner and above all, market growth.

Wal-Mart Stores Inc. helps individuals around the globe spare cash and live better - at whatever time and anyplace - in retail locations, online and through their cell phones. Every week, more than 245 million clients and individuals visit our almost 11,000 stores under 65 flags in 28 nations and e-trade sites in 11 nations. With financial year 2015 net offers of $482.2 billion, Wal-Mart utilizes 2.2 million partners around the world. (Wal-Mart Corporate) Wal-Mart is a superpower in the business world and has been that way for 50+ years. Understanding how it got to this point and how it has maintained its successful business model starts with its

Competitive advantage exists when a firm has strategy, product or an attribute that makes the firm capable of delivering similar benefit to that of competitors at a cheaper cost. Having competitive advantage is not enough the company should be capable of sustaining that particular competitive advantage for a longer period of time.

1. TARGET MARKET: As discussed, target market is a group of potential customers in which a company directs its marketing efforts. A company should always anticipate consumers’ needs and work towards fulfilling these needs. It is one thing to identify your “target market” and another to satisfy them. Walmart’s credo is, “save money, live better” this summaries their target market, the lower-middle class and the poorer. (Low income consumers). Walmart is the only retail

Evidently, Wal-Mart is not doing anything to differentiate itself from rivals. It gives no frills to self-service outlets always providing the cheapest prices. Through a well-built influence with suppliers, the company has gained the power to manipulate prices and amend manufacturing procedures thus wringing out more savings for its customers. All that the company does from the frequent calls to suppliers to doubling up execs in hotel rooms aimed at saving the

Wal-Mart • What each company does. The founder of Walmart, Sam Walton, was born in 1918 in Kingfisher Oklahoma. In his early twenties, Sam Walton decided to join the military. Shortly after returning from the military, Sam and his wife moved to Newport, Arkansas.

Discussion Question: Which parts of the value chain does Wal-Mart target in order to achieve a low-cost advantage over its rivals? Answer: Wal-Mart has an extensive real-time information sharing network with vendors to make the supply chain much more efficient. It targets purchasing, store delivery, procurement practices that leverage the company’s relative buying power, investment in a large fleet of trucks for distribution of inventory, optimization of the product mix, use of security systems, preferred real estate rental and leasing rates, and lowering labor costs.

I chose to do this written assignment about Wal-Mart. Sam Walton founded Walmart on three basic beliefs which are: (1) respect for the individual, (2) service to the customers, and (3) strive for excellence. (Hayden, Lee, McMahon & Pereira, 2002). It is difficult to pinpoint one type of business that Wal-Mart does because it is involved in a myriad of businesses. At its heart, Wal-Mart is what is commonly called in the United States, a big box retailer. This means that the store is divided into various departments such as groceries, clothing, electronics, bank, fast food, nail salon, beauty salon, quick health clinic, and tire centers that include minor vehicle maintenance such as oil changes. Most Wal-Mart stores also have a gas station outside the store. In addition to the retail stores, Wal-Mart also has a members only warehouse called Sam 's Club. This diversification into a myriad of businesses follows Wal-Mart’s business model to dominate all markets. (Hayden et al., 2002).

Market Development. Walmart uses market development as its secondary intensive strategy for growth. This intensive growth strategy involves entering new markets to sell to consumers other than those that the company currently has.

The five generic competitive strategies are low-cost provider, broad differentiation, focused low-cost, focused differentiation strategy, and best-cost provider strategy. According to the textbook, “a company’s competitive strategy deals exclusively with the specifics of management’s game plan for competing successfully” (Gamble, 93).

A few reasons as to why Wal-Mart became a leader in the retail industry is due to their practices in obtaining competitive advantage by offering the lowest prices for the market. Wal-Mart built their practices by giving suppliers transparency to meet the demand of customers and granting them long-term relationships by purchasing goods in bulks. In addition, their turn times on inventory are three-five days faster than regular competitors. The inventory shelves are similar to Honda since they only hold up to four hours of inventory in their manufacturing site. Also, Wal-Mart holds their own transportation which is why they can manage their costs efficiently for the company. Their transportations system constitutes links between suppliers, distribution centers and retail stores. They have restrictive criteria for drivers where in order for them to be hired they would have to be accident free for a consistency of minimum 300,000 miles accident free. The supply chain practice that they have gained since they began the business was strategically faster and cheaper than all competitors. 85% of Walmart’s inventory is taken care of by their own transportation system and only about fifteen percent is taken care of by the suppliers through cross-docking. Wal-Mart uses

A reputation of being the “Wal-Mart” of retail and service established by Pep Boys keeps bringing customers back to their stores as repeat business (PepBoys, 2015). Consequently, Pep Boys service rates are far lower than competitor dealerships especially in the sale of tires. Pep Boys will need to have a procurement team that will look into detail how the company can give service at the best price possible while increasing revenue for the service market of the company. To do this will require to make sure that the experience a customer has is one so positive that they will remember it and pass that along to other potential customers. Once Pep Boys can streamline their supply chain, and warehousing locations in the central U.S., Pep Boys will expand much more than they ever have.