Essay on Walmart Inc.
Number of words: 653
The Company that I choose for the research case analysis is Walmart Inc. The Bentonville-headquartered giant retail corporation, Walmart Inc., was incorporated in 1969, seven years after its establishment in 1962. The corporation boasts a huge turnover and a leading position among the elite multinational retail corporations globally. The firm operates in over 28 countries across the world with 11,700 retail stores (Kim, 2008).
COMPETITIVE ADVANTAGE-PORTER’S GENERIC STRATEGIES
Owing to its global expansion, Wal-Mart has to face off with numerous competitors across the world that pose diverse competition. ShopKo, Target, and Kmart are examples of departmental stores that offer primary competition to Walmart Inc. With the utilization of specialization strategies, smaller retailers can successfully compete against Walmart Inc. by focusing on a small niche market (Dess, 2018).
- Threat of substitute services and products. Big and equally small physical retail stores offer a great deal of competition for Walmart Inc. Additionally, other retailers can aggressively compete with the firm through dealing in diversified goods and also through selling their products through the internet. E-commerce firms such as Amazon.com cannot be underestimated as their sales increase yearly exponentially due to their online presence.
- Threat of new entrants. M-commerce and e-commerce competitors are of particular importance to Walmart Inc. As earlier pointed out, Amazon is one of the leading companies in this department.
- The industry’s competitive rivalry. The United States represents about 70% of the firm’s sales and the competitors that operate in this country offer the biggest threat to Walmart Inc. Walgreen, The Home depot, Costco, Target and Kroger offer direct competition to Walmart Inc. since they deal with identical products. All the stores except Target and Kroger have outlets in foreign countries. This means that Walmart Inc. has to deal with competition outside the United States as well.
- Customers’ bargaining power. The clients are informed and are able to compare prices before they make a purchase. Since clients have numerous options of where to get products from, they are considered to possess so much power.
- Suppliers’ bargaining power. Owing to the economies of scale, a small supplier can be made or broken by Walmart Inc. Suppliers have very little power when dealing with Walmart Inc. since it buys most of their products and they hugely depend on the firm.
PRACTICAL MANAGERIAL IMPLICATIONS
The management of Walmart Inc. needs to consider the cannibalization of some of their new stores taking customers off relatively old stores. Separate locations for new and old supercenters have to be considered. Additionally, as an option, Walmart Inc. can expand existing stores since sales will increase as services and products provided increase. In order to offer the cheapest prices in the market as well as improve operations through efficient, Walmart Inc. needs to invest in innovation. This will ensure the company maintains its market share since it follows the cost leadership strategy. Assured success for Walmart Inc. can come in the form of investing in e-commerce. In fact, the company’s online sales have soared at a very fast rate and this represents a business opportunity that should be given utmost priority. Furthermore, the company should continually explore its options in international markets. Taking care not to repeat past mistakes, the firm should conduct proper market research. Countries that hold huge potential to increase sales include India, china and the larger European continent.
Dess, G. (2018). Strategic Management: Text and Cases. [VitalSource Bookshelf]. Retrieved from https://online.vitalsource.com/#/books/9781259900440/
Ghazzawi, I. A., Palladini, M., and Martinelli-Lee, T. (2014). The Wal-Mart stores, Inc.: An American dream that touched the world. Journal of the International Academy for Case Studies, 20(1), 9.
Kim, R. B. (2008). Wal-Mart Korea: Challenges of entering a foreign market. Journal of Asia-Pacific Business, 9(4), 344-357.