Retailing and Giant Chess Board

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An essential step in any business’ strategy formulation is to evaluate the competitive environment that shapes its operations. Every industry can be thought of like a giant chess board – on which companies are continuously battling one another, all wishing an all time victory. Anyone who has ever entertained a game of chess knows that the only way to win is to fully take advantage of the opportunities the game brings and of course be weary of the threats the adversary poses. This analogy is tailor made for life in the business world as only companies that have mastered this environment awareness become stories of success.

Wal-Mart is of course no stranger to success. Although Sam Walton opened its doors over five decades ago, this giant organism is still proving to be a success story like no other. With net sales of 374.5 billion USD (8.6% increase on 2007 sales), the 2008 fiscal year has been a record setter for Wal-Mart. From a business perspective this mega corporation is an example hard to follow, but in the next few pages we shall see some of the elements that have brought this ultimate success story to life.

Industry Life Cycle Analysis

According to the North American Industry Classification System (NAICS) Wal-Mart competes in a variety of industries:

-5331 Retail Variety Stores
-5411 Grocery Stores
-5311 Department Stores
-5812 Eating Places
-5399 Miscellaneous General Merchandise Store
-5912 Drug Stores and Propietary Stores

Since the retail giant is best known as an all around retail variety store, we will be basing our analysis on this particular segment of its operations. According to the NAICS the “Variety Store” category includes establishments primarily engaged in the retail sale of a variety of merchandise in the low and popular price ranges. Sales usually are made on a cash-and-carry basis, with the open-selling method of display and customer selection of merchandise.
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