Wal Mart 's Core Competencies Essay

1649 Words7 Pages
There is a growing body of literature that recognises the importance of Resource Based View (RBV) in strategic management. This paper attempts to identify Wal-Mart’s core competencies, applying RBV literature such as VRIO framework with supporting evidence from “Wal-Mart Stores in 2003” case study. RBV suggests that each firm acquires a collection of capabilities, which can be mobilised by strategists to gain competitive advantage (McGee et al., 2005). In other words, a firm can be viewed as a bundle of resources, which are the drivers of strategy and growth in a firm. When creating a unique product, a firm also develops a unique competence (Mintzberg et al., 2009). Prahalad and Hamel (1990) ascertained that three tests could be used to determine a core competence. Foremost, a core competence should provide a promising access to a variety of markets. Second, a core competence would make a substantial contribution to the end product in view of customers. Lastly, a core competence should be unique, hard to imitate. In fulfilling the three tests, a resource would be a core competence of a firm. Moreover, to be a sustainable competitive advantage (SCA), Barney (1991) stated that a corporation’s resources should consist of four characteristics: (i) valuable, in adding value-creating strategy to the product, not in the monetary sense, (ii) rare, in view of the business’ current market position, (iii) imperfectly imitable and (iv) non-substitutable. Furthermore, a firm’s

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