In the past 10 years, Wal-Mart has grown tremendously to become the largest retailer in the world. Being America’s largest employer and the most successful company, Wal-Mart's influence is unparalleled. Wal-Mart isn’t just the largest retailer in the world, over the past several years it has popped in and out of the top spot on the Fortune 500 list—meaning that the firm has had revenues greater than any firm in the United States. Wal-Mart is so big that in three months it sells more than a whole year’s worth of sales at number two U.S. retailer, Home Depot. Wal-Mart's key sources of competitive advantages are its low cost, high volume strategy. Also, Wal-Mart grew in large part by leveraging Information systems to an extent never before seen in the retail industry. Technology tightly coordinates the Wal-Mart value chain from tip to tail, while these systems also deliver a mineable data asset that’s unmatched in U.S. retail. To get an idea of the firm’s overall efficiencies, at the end of the previous decade a McKinsey study found that Wal-Mart was responsible for some 12 % of the productive growth in the entire U.S. economy. The firm’s capacity as a systems innovator is so respected that many senior Wal-Mart IT executives have been snatched up for top roles at Dell, HP, Amazon, and Microsoft. Low cost leadership stratergy
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.
* Low cost: Wal-Mart has lower operating expenses than the industry average. The primary cost advantage is Wal-Mart’s superior distribution capability (location of stores, inside-out growth patterns, cross-docking, superior information management). Quantitative details serve as a cost advantage , being the largest seller of...
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