1. Why is Wal-Mart successful in the US? What are Wal-Mart’s competitive advantages?
Wal-Mart is able to deliver the lowest possible price to their customers in a friendly environment focused on serving the customer’s every need. They effectively snuck into the retail shopping industry by opening stores in small towns where the population could buy everything they wanted at one place. Becoming the worldwide leader in sales for all companies does not happen without strong competitive advantages. Once Wal-Mart establishes itself in these small towns, they have taken over the demographic. All potential customers’ needs are fulfilled and competition is shut out. With the massive size of supply chain demanded to service thousands of stores, Wal-Mart can control their suppliers and drive costs down. The opportunity to sell your brand in a Wal-Mart store will ensure your brands success and this low cost demand from Wal-Mart is viewed as an acceptable trade-off for store presence by suppliers. Wal-Mart has the most effective supply chain in the world due to its integration of technology and information systems. They have a hub and spoke distribution system where they can ensure stores are fully stocked with product and deliveries are made on time. Finally, keeping the associates happy by incentivizing them with leadership potential, stock, and a family atmosphere, Wal-Mart is able to keep its workforce happy which in turn makes customers happy. These forces working together neatly ties Wal-Mart’s competitive advantages into its core and raises insurmountable barriers to entry.
2. Should Wal-Mart replicate its domestic model in its original form in China? Why? Can it build the same competitive advantage in China through its successful domestic model?
Wal-Mart faces many new challenges they do not experience in the US. They are stricken with local, state, and national regulations that make it very difficult to achieve efficiencies. In China, the...
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