Wal-Mart Case Study
1. To what extent is Wal-Mart’s performance attributable to industry attractiveness and to what extent to competitive advantage?
Wal-Mart is a company which operates in the service sector, more specifically in the “Discount, Variety Stores/Retail” industry. The company’s superior performance is demonstrated through the fact that it was America’s largest company (in terms of revenue) in 2002, and the reputation of the company is reflected in the opinion of “Fortune” who have identified Wal-Mart as one of the world’s most admired companies. In 2004 Wal-Mart had been hiring 1.4 million employees – making it the largest corporation in the world. Wal-Mart’s share prices have also been stable at time of stock market volatility. There are several reasons behind Wal-Mart’s breathtaking results, most of them coming from the fact that Wal-Mart had been able to combine industry attractiveness with its competitive advantages.
Wal-Mart managed to implement correct strategies to utilize its resources to the maximum and thus be able to create superior value for its customers. The competitive advantages of Wal-Mart are demonstrated through:
- Their customized superior Distribution model
- Diversity of retail stores (from 24/7 Supercentres with a great emphasis on customer service to Sam’s Clubs warehouses which were targeting small businesses and offered minimal customer service)
- Unique approach to retailing and a unique corporate culture – minimizing costs and maximizing customer satisfaction is what Wal-Mart’s philosophy is all about
- Their capacity for continuous improvement and innovation
- Most productive work force (175,000$/employee in sales on a yearly level) The industry Wal-Mart is a part of (Discount Retail industry) is a fast-paced, turbulent, highly competitive environment and there is no guarantee of continued success. The industry had been developing and growing and so had Wal-Mart with it (by that complying with the four building blocks rule and
Wal-Mart is a company which operates in the service sector, more specifically in the “Discount, Variety Stores/Retail” industry. The company’s superior performance is demonstrated through the fact that it was America’s largest company (in terms of revenue) in 2002, and the reputation of the company is reflected in the opinion of “Fortune” who have identified Wal-Mart as one of the world’s most admired companies. In 2004 Wal-Mart had been hiring 1.4 million employees – making it the largest corporation in the world. Wal-Mart’s share prices have also been stable at time of stock market volatility. There are several reasons behind Wal-Mart’s breathtaking results, most of them coming from the fact that Wal-Mart had been able to combine industry attractiveness with its competitive advantages.
Wal-Mart managed to implement correct strategies to utilize its resources to the maximum and thus be able to create superior value for its customers. The competitive advantages of Wal-Mart are demonstrated through:
- Their customized superior Distribution model
- Diversity of retail stores (from 24/7 Supercentres with a great emphasis on customer service to Sam’s Clubs warehouses which were targeting small businesses and offered minimal customer service)
- Unique approach to retailing and a unique corporate culture – minimizing costs and maximizing customer satisfaction is what Wal-Mart’s philosophy is all about
- Their capacity for continuous improvement and innovation
- Most productive work force (175,000$/employee in sales on a yearly level) The industry Wal-Mart is a part of (Discount Retail industry) is a fast-paced, turbulent, highly competitive environment and there is no guarantee of continued success. The industry had been developing and growing and so had Wal-Mart with it (by that complying with the four building blocks rule and