Question

How sustainable is Walmart’s competitive advantage? How transferable are Walmart’s advantages to new markets?

Answer 1

Let’s look at their scale:

• $500 billion in sales
• $11.5 billion in eCommerce sales
• $28.3 in operating cash flow
• Over $10 billion in capital investments
• Over 11,700 stores in 28 countries
• Serving 270 million customers per week

At this scale they enjoy a supplier cost and logistics advantage over every competitor.

This advantage, in turn allows it to offer lower prices than anyone else and still be profitable.

Which in turn, results in more sales.

The company also reduces inventory management cost by maintaining low inventory or just-in-time inventory which is a good technique to gain competitive advantage. Wal-Mart is slowly gaining sustainable competitive advantage over its competitors using these techniques. Wal-Mart’s advertising slogan “Save Money, Live Better” truly reflects the company’s strategy of providing products to a target market at lower prices. How Wal-Mart has gained environmental sustainability Due to increasing environmental imbalances, it is necessary for firms to achieve competitive advantages in the area of environmental convergence as well. Wal-Mart is putting continuous efforts from a long time for environment sustainability and energy conservation. It also received Aspen Institute Energy and Environment award for Corporate Energy Efficiency in 2009. Here are a few steps that Wal-Mart has taken to encourage environmental sustainability: Using, encouraging and investing in renewable energy Wal-Mart is investing millions of dollars in renewable sources of energy to reduce greenhouse gas pollution. In 2008, the company saved approximately 15 million gallons of diesel fuel by increasing space in its trucks and reducing the number of empty miles driven by trucks.

The expedition for productivity, quality and speed has resulted in management tools and techniques, total quality management benchmarking, time based competition, outsourcing, partnering, reengineering, change management. In any organization, strategy management is the key to its success. There are many theories based on this assumption that without a proper strategy and planning, it is difficult for any industry to survive irrespective of its size. It is necessary to understand here that all the major corporate organizations have established themselves, thanks to superior strategic planning and implementation. The retail industry is making news everywhere with not only the traditional industries increasing their outlets but some major corporate industries also intruding into this industry like Fresh @ Reliance of Reliance Industries, More of Aditya Birla Group in India. Wal-Mart, a US based retail industry, which is known as the giant in the retail industry has survived and is still the huge enterprise in the world which deals with almost all the F&B products, apparels, etc. It is not only the largest company in world but also the largest company in the history of world