Competitive advantage can be defined as a means by which a firm manages to keep making money, add value by providing distinct products and sustain its position against its competitors. Wal-Mart Stores Inc. is one of such companies in the retail sector that has achieved sustainable competitive advantage over a period of time. ¬This report focuses on how Wal-Mart has achieved competitive advantage by adopting cost leadership strategy and providing consumer goods at lower prices. The report also discusses how Wal-Mart is taking lead on environmental sustainability by investing in solar power plants, offering environment friendly products in its various stores and encouraging recycling of different products. Wal-Mart’s strategies that have helped to reduce power consumption to a great extent as well as the company’s future plans to go green have been studied in this report.
How Wal-Mart has gained sustainable competitive advantage
Wal-Mart has adopted cost leadership strategy to achieve competitive advantage in the market. They have achieved cost leadership by attracting price sensitive customers and offering lowest price consumer goods. The cost leadership strategies are helping Wal-Mart to reduce its cost of operations and thus enjoy higher profits as well as the larger market share. The company is able to beat its competitors such as Target Corporation by reducing prices and thus achieving sustainable competitive advantage to a great extent. The few techniques that Wal-Mart is using to gain sustainability are mentioned below. •
Wal-Mart has gained benefits from economies of scale that helps to keep the prices lower as compared to the competitors. The company is able to spread its fixed cost over a large number of units of products resulting in a lower cost per unit. •
Due to its enormous size and large number of stores worldwide, Wal-Mart has the tremendous bargaining power with its suppliers and thus it purchases products at lower prices. •...
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