Question 1) Determine the Core Competences of Wal-Mart. Substantiate your answer.
In order to determine the core competences of Wal-Mart, I will first need to conduct an internal analysis of Wal-Mart before we could identify the core competences of the company. The internal analysis consist of a few components, first we will have to identify the resources available to the company, followed by the capabilities of the company. After which I will put the capabilities through a numbers of models to determine if they “fit the bill” to be considered as a core competency of Wal-Mart. I will start by first identifying the resources.
The resource available to any companies compromises of two component, the first being Tangible resources, which can be seen and quantified, and, Intangible resources, which includes assets that are rooted deeply in the firm’s history and have accumulated over time.
Tangible resources available to Wal-Mart are:
• Financial Resources – Wal-Mart is financially successful by a number of measures, experiencing varying rates of growth in international markets. This consistence growth, matched with an economic of scales enables Wal-Mart to have superb credit ratings with the financial and lending institutions, allowing them access to large amount of borrowed funds should the need arises. • Organizational Resources -Wal-Mart has a concrete organisational structure in place, the top 25 senior officers of the company meet via weekly videoconferences “to review the company’s ongoing performance, focus on initiative to drive sales and customers service, and address broader issues”. This then trickles down to the regional groups, which are then divided into the respective departmental managers who handle a team of staff. • Physical Resources - Wal-Mart buildings can generally be found in the neighbourhood areas, where space is abundance. Its products for sale are shipped, and delivered to them by the suppliers through Wal-Mart’s dedicated logistics system, which are easily available within their locations. • Technological Resources - Wal-Mart was one of the pioneers who helped to push the retailing market to adopt UPC codes and bar-code scanning equipment. Wal-Mart's focus on cost reduction has also led to their involvement towards a standards procedure to use RFID-based Electronic Product Codes so as to lower the costs of supply chain management. Apart from its own dedicated logistics system, it also their own private satellite networks for point-of-sales transmission in all their stores.
Intangible resources available to Wal-Mart are:
• Human Resources – Although Wal-Mart has been known to implement stringent standards of equal employment opportunity practice; the company facing high employee turnover, gender discrimination problem and Union problem, clouded this fact. Lawsuits were filed against Wal-Mart for unfair labour practices. • Innovation Resources - Wal-Mart is always keen on innovation and creativity. Wal-Mart analyses market potential based on the general environment factors such as economic and political risk, growth, potential and availability of real estate for development. Due to their substantial analysis, they are better equipped to handle every investment and innovation that comes up along the way. • Reputational Resources - Sam Walton had a philosophy of “people first”, I believe this sums up the Wal-Mart Mission and Vision, which reflects highly on its reputation not only towards its customers but also its employees and business partners.
After identifying the resources of Wal-Mart, I will move on to the capabilities of the company. The capabilities I’ve identified are:
• Logistics & Network - Wal-Mart’s sophisticated logistics system, provides Wal-Mart with a exceptional cost advantage by improving its ability to reduce it’s shipping and handling costs. Wal-Mart had always invested heavily in infrastructure, however the most valuable...
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