1. Identify and evaluate the strategies that Wal-Mart has historically pursued to create and sustain a competitive advantage. Answer: Wal-Mart’s pursuit and ability to sustain a competitive advantage has allowed the company to make use of many strategies. One of the strategies that Wal-Mart has made use of is the Expansion strategy. The company realized that building a new store will allow for increase market share value. The company opened new locations in the community with 5,000 to 25,000 populations. After their success in the rural areas, Wal-Mart moved to contiguous areas and then moved to adjoining areas. The expansion strategy made Wal-Mart the number one retail store in the United States. As Wal-Mart continue its expansion program domestically, the firm decided to go international. In 1994, Wal-Mart introduced its first overseas store in Canada. With its increase success and introduction in Canada, the firm moved to Mexico, Brazil, Great Britain, Japan e.t.c. Furthermore, Wal-Mart realized that expansion domestically and internationally will not be possible without acquiring an existing retail firm. Therefore, this became the second strategy used by Wal-Mart by acquiring a retail store which will further or enable an expansion locally and internationally. Third, the “always low prices” strategy is believed to be the strongest strategy used by Wal-Mart. The firm developed the idea of dealing directly with the manufacturer and with the power control by Wal-Mart (Porter fire factors) will enable it to deflate and get the best deal from the manufacturer and supplier. Among these are the ideas of treating its associates good, introduction of groceries and making the store a one stop shopping mart with well arranged aisle. This also includes a sophisticated inventory technology. All of these have allowed Wal-Mart to sustain a competitive advantage.
2.Based on your analysis of the case, what are the eight (8) most important strategic factors (strengths/ weaknesses/ Opportunity/ Threats) pertaining to Wal-Mart? Explain why you selected each of these (1) Technology – (opportunity): Technology is an opportunity to Wal-Mart with its inventory control system that was recognized as the most sophisticated in retailing. The technology linked all the stores to the headquarters and the company’s distribution centers. It also enables the warehouse of which the goods are ordered, and direct the flow of goods to the store and proper shelves. (2) Competition: (treath) Wal-Mart faces various competitions locally and internationally. One of Wal-Mart’s competitors is Kmart and target. In 2006, Kmart has over 1,479 stores in 50 states locally and target has 1,418 stores in the 47 states and 1509 super target stores in 21 states. . Kmart and Target is Wal-Mart’s strongest competitor. With the emergence of two company a firm like Wal-Mart faces some serious completion and probably foreclosure. Internationally, in 2000 when Wal-Mart tried to open in Germany, they had to close down due to these competitions. It affected sales even after using the low price strategy and cut down on prices by 23%, other big companies like Aldi and Idle cut down on heir prices too by 25%. (3) Customer – (opportunity): Due to the low prices provided by the firm, Wal-Mart was able to attract a lot of customer. Wal-Mart controls the longest market share in the retail industry. Also, customers enjoy the fact that they can shop for almost everything under one roof and with the simple arrangement of aisle and smiling associates that are always ready to assist and answer any questions or concerns customers may have. Moreover, the 24 hours store operation is another reason why Wal-Mart has a lot of customers. (4) Economic - (Threat): Whenever the economy is facing a recession, Wal-Mart becomes affected. With less to spend, customers are making fewer trips to the store in order to save or economize. Good economy...
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