Competitive Advantage of Walmart

Decent Essays
Competition among retailers is aggressive, as the demand side of the industry is driven by consumers who expect to get the best value for their money. “Competitive advantage is anything a company has, or does better, that customers value but the competition cannot match” (Romero, 2005). Walmart has a sustainable competitive advantage over other retailers, largely due to their centralized focus of cost leadership and differentiation strategies. Walmart uses the backward expansion strategy to extend their geographical reach. The company is known for entering small, rural towns and saturates the area before entering the larger metropolitan areas. The international plan included new construction of buildings and acquisitions of existing buildings. In the foreign market Walmart attempts to match the culture and taste of local tradition. They employ locals in the area to manage the stores, so that local barriers can be reduced. Wal-Mart maintains their strategy of low-cost leadership, which appeals to a larger market than competitors. The most prominent difference is that Wal-Mart owns the supply chain and has superior bargaining power over suppliers. This cost-saving opportunity is represented in inbound and outbound logistics. They maintain a young fleet of trucks, and recently released a new concept truck and trailer that has higher fuel efficiency due to the low profile aerodynamic design, and a 53 foot trailer made out of carbon fiber, which saves on weight and can further
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