1. Is Wal*Mart’s success due to its industry attractiveness or its own capabilities?
2. In Which areas dos it have particular capabilities?
3. Are its competitive advantages transferable firstly, to other retail sectors and formats and, secondly, overseas? Why have other companies had limited success in imitating Wal*Marts Strategy?
4. What should Wal*Mart do to sustain its performance and to defend against threats?
Wal*Mart was very successful as an enterprise throughout the 80’s and 90’s due to several very apparent capabilities which provided it with a great deal of strategic strength within the retail industry.
Firstly it was built on the very strong reputation of an individual who was known as frugal and a very hard worker whose entire philosophy was built on “the value of the dollar”. Secondly the Wal*Mart culture nurtured by Sam Walton as one which provided a very strong network of support for it’s “associates” in terms of not only looking after them financially, but also in providing them with a interesting workplace and giving them a communications framework in which they could discuss, suggest or complain about issues affecting the company and it’s workforce. The third capability which is contributable to Wal*Mart’s success is their reputation as the great American provider with its “Buy American” program, retaining a large proportion of dollars within the home economy and subsequently jobs.
The fact that a large proportion of Wal*Marts success is built on their strategy with their associates (to ensure and retain a long term commitment), the company’s reputation from the “buy American” campaign (having earned consumer loyalty and commitment), and the all encompassing strength of their founder: Sam Walton, means that their competitive advantage would be extremely difficult to supplant to another retail sector but even more so to transfer their success overseas. Additionally transferring...