Competitive Advantage of Wal Mart

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Sustainability of Competitive Advantage

Every company is trying to avoiding failure and the goal is to have a sustaining competitive advantage. But when do companies have a sustainable competitive advantage? It depends on three factors: the barriers to imitation, the capability of competitors and the dynamism of the industry development.

In the 1970s Wal Mart lost their competitive advantage. Sears had a better positioning like Wal Mart. Therefore Wal Mart distinguished the situation and improved its distribution system. It created new trade channels to save costs and invest in new information technology to improve their situation. Wal Mart found a way to change their strategies and structures to change their competitive conditions. Over time, Wal Mart got strong partnerships with suppliers. This was a key element to improve their performance on the market and it`s not easy to imitate. Those partnerships work now since a long time and other competitors might lack the volume of purchases Wal Mart can offer.

With some diversifications like Sam’s Club, a new way of supercenters or their plan for the international expansion Wal Mart was able to confine from their competitors. Wal-Mart was the first low price company and retailer which expanded around the world. The CEO of Wal Mart focused on small-town markets and ignored the national discounters. So, Wal Mart has huge distribution capabilities and this is very difficult to imitate from competitors.

The most significant advantage of Wal Mart is their using of the satellite system. They are using this system to compress their costs and get a distinguished communication system with all employees to every time.

The overall achieved employee satisfaction has the advantage of highly motivated employees. This is an overall management issue and when the employees are motivated, the customers are feeling good and well served.

In future, Wal-Mart was committed to find new ways to have the competitive...
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