Wal-Mart is a company that has taken its core competencies, which are the capabilities the firm emphasizes and performs especially well while pursuing its vision (Ireland, Hoskisson, Hitt, 2008), and turned them into competitive advantages. Core competencies must satisfy four characteristics in order to be a competitive advantage. These advantages, according to our text, include: *valuable, *rare, *difficult to imitate,*nonsubstitutable.
Wal-Mart’s Core Competencies:
1. Culture- One core competency Wal-Mart has is its culture. Wal-Mart’s employees are hardworking, efficient, and process oriented. In the video “The Age of Wal-Mart” it pointed out that Sam Walton, founder of Wal-Mart, called his employees associates and treated them as partners. He wanted their input and ideas on how to make the company better. Also, no matter what Wal-Mart you go into across the country, Walton wanted you to know you will ALWAYS receive low prices, excellent customer service, and feel at home. From door greeters to big charity contributions, this type of culture is rare and difficult for competitors to imitate.
2. Low Cost Operations- As the video pointed out, Sears was a leading retailer during the 70’s, but was greatly affected by the recession. They targeted middle class families, expanded their overhead, and developed in larger cities. Wal-Mart focused on small towns and lower overhead during this time. As the economy worsened, people began looking for lower prices and moving to smaller towns and suburbs. Today Wal-Mart can generate big sales volume which allows the company to gain profits with low profit margin giving it an advantage over its competitors.
3. Distribution- Wal-Mart operates an unrivaled global network of 146 distribution centers (Troy, 2003). Because of this, the trickle-down effect happens. Trucks do not have to travel long distances to make deliveries which helps to reduce lead times for...