What are Wal-mart’s competitive advantages?
Large variety of products and services
Extremely well known brand name
Superior IT systems
Volume purchasing power
Lots of investment capital
How sustainable are those advantages?
The ability to offer a wide variety of products and services is essential to their business model, however by expanding the number of product/services too much or too quickly, their variety can become a liability. Have a large variety of products/services is also expensive and can be unsustainable in an economy that is experiencing a recession. b.
Having a well known brand name is fairly sustainable advantage. However if the brand name is in some way tainted, for example how their name has been hurt by the idea that they mistreat their employees then having the well known brand name can be detrimental to the business. c.
Superior IT systems can only provide a temporary competitive advantage on account of the fact that technology is always changing. Although Wal-Mart may have the best technology systems right now, this may not be the case in 5 years if they choose not to update their systems. Although Wal-Mart has the capital to continue to stay abreast with the newest and best technology, continual implementation of these systems can be cumbersome even for a company as big as Wal-Mart. d.
Volume purchasing power is one of Wal-Mart’s most sustainable competitive advantages. This is due to the fact that given the large number of stores and variety of products that Wal-Mart carries they are able to better negotiate with manufacturers for discounts on large volume orders. e.
Although Wal-Mart does have a lot of investment capital accrued, this capital advantage may be at risk given a few miscalculated expansions (stores, number of products/services, etc) and negative global economic trends (recessions, droughts, etc) 3)
How transferable are those advantages as Wal-Mart moves into new formats and especially...
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