Wal-Mart's first strategy was to set stores in rural areas as the other retailers have ignored them. This helped Wal-Mart to be the first one to enter this market and that was its major competitive advantage. It always priced its goods lower than the local retailers and hence this helped them to drive other small companies out of this market. They were always trying to decrease their costs and were able to achieve this by having high buyer power over the suppliers in the market and also utilizing the economies of scale. However, Wal-Mart's competitive advantage and hence its strategy changed over time. Though Wal-Mart positioned itself in the rural areas, they reduced their costs by utilizing efficient processes. Mainly they continuously focused on improving & using IT to their advantage and nurturing good vendor relationships . They grew their information collection networks, the ability to collect information in real time, and their ability to process information.
English: Inside the Walmart (still branded as Wal-...
A protest in Utah against Wal-Mart
This is a selfmade image from the english wikipedi...This enabled them to streamline their inventory delivery and inventory decision making system to produce lower prices and higher volumes. They continued to leverage their information advantage by sharing their information with suppliers to further leverage this advantage. Wal-Mart then leveraged the economies of scope contained in the synergy between mass merchandise and food.
Wal-Mart was huge and hence their competitive advantage was sustainable. It produced in high volume & hence had the resources to utilize economies of scale to its advantage. Wal-Mart also invested a lot to improve its information and distribution which is not very easily imitable by its competitors.
Wal-Mart wanted to expand internationally as the growth in the United States have been slowing. So they started setting new stores across many countries hoping they would be able to gain profits the same way they did in the...
Wal-Mart Stores Wal-Mart's strategy
On one critical point, this essay is simply wrong. Wal-Mart has not failed miserably in its overseas expansion. It has been extremely successful in England, Mexico, Brazil, Argentina, and China. In China, it is one of the largest retailers of its kind, and it has done its homework. In Beijing, Wal-Mart found that it had to provide truly fresh fish to attract customers. In Wal-Mart, fish are presented live in tank. Customers select the fish of their choice, which is then netted, killed, and gutted in the store.
This essay also completely overlooks the fact that Wal-Mart has become the symbol of worker oppression and predatory competition in the United States. With its restriction of benefits, paltry wages, and illegal work policies, it has become the symbol of the mean-spirited employer nickel-and-diming its workers into poverty.
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