Introduction
The case study will focus on Pankaj et al (2004) and David, B. Y & Renee, K (2013), articles published in Harvard Business School, journal, to review and discuss Wal-Mart’s operations capabilities and way forward.
Wal-Mart as an organization is a story of astonishing success in terms of revenues and the way it has touched lives through its products and services made Forbes declare the company in March 2003, as the largest and most admired American company.
Wal-Mart’s strategy in the discount retailing industry
The strategy of Wal-Mart is affixed on differentiated pricing, cost leadership, strong distribution, inventory management and most importantly in tandem with the technology-based utilization of information technology (IT) to maintain the leadership position in the retailing industry specifically discount retailing.
Discount retailing sector initiated in mid-1950, however 1962 was the year that changed the course of the retailing industry. Wal-Mart, Kmart, and Target the biggest names in the sector started in 1962.
Every business strategy is evaluated with the results in terms of revenues and brand equity of the products and services and Wal-Mart, as evidenced from the case studies numbers i.e. in 2003 Wal-Mart boasted sales of approximately $8 billion and in 2011 the company number went up to $420 million.
The numbers in essence gives credence to the fact that the strategy of Wal-Mart especially more recently with a refocus of ‘Every Day Low Process’, have been the key in generating the numbers.
Wal-Mart strategy has also diversified with time and the retail giant entered the fashion, organic foods, and health sector. The strategic focus of Wal-Mart has always been cost leadership and thus, trying to upscale the stores to target more urban shoppers backfired.
The emotive connect of the brand is too strong to be negated when it comes to the image of a discount retailer.
E-commerce is one aspect of the business strategy that has made Wal-Mart revenues and new segment in view of the convenience provided by online shopping that is the future of retail marketing concerning the changing dynamics of the communication trends.
The strategic objectives in view of the case studies focus on the fact that the refocus on everyday low prices has again made Wal-Mart the key discount retailer globally.
Has Wal-Mart attained a sustainable competitive advantage in the discount retailing industry? Please Explain
Wal-Mart has attained sustainable competitive advantage when it comes to discount retailing in view of the facts and numbers shared in the 2011 case study.
Although as mentioned due to search of an apt strategy in relation to in the US the growth rate of 10% increase per year had been missing, however the competitive advantage sustainability is such with the brand name that Wal-Mart still outperformed Wal-Mart’s main US competitor Target.
In view of core, strategy that drove Wal-Mart to its initial success as mentioned earlier has helped Wal-Mart connect with its consumer base effectively.
The utilization of e-commerce and the expansion in markets such as China, India, and South American and European region has in essence given Wal-Mart the scope to only sustain but also grow the competitive advantage both in terms of choices of products and operational capability.
The mentioned systems and processes have helped Wal-Mart in creating key benefit in all features of its operations over its competitors efficiently and in a constant manner. The store formats and merchandising strategy are also the reason.
However, the capability of reinventing the company as per the needs and demands of the times has been one of the major factors in Wal-Mart’s continued success over its competitors.
How to Compete with Wal-Mart
As a discount retailer, the author will study and research the product categories in which Wal-Mart is not excelling in, as evidenced in the case study and in view of the research, produce goods that satisfies the needs and demands of that particular niche in view of a unsatisfied consumer line.
Since breaking even and eventual profitability are the primary agenda, for a start the focus will be on Grocery in the retail stores that will bring house wives to the new discount retailer and through that, the other discounted segments i.e. fashion and organic foods and households will be marketed.
With the advent of social media, aggressive communication, and immersive engagement activations will be initiated to create a subliminal presence in the minds of the prospect8ive consumers, the utilization of tactical strategy will help in initiating new business from Wal-Mart customers.
What should Wal-Mart be worrying about? What future strategic directions would you recommend for the firm?
Living in a globalized economy and an age where communication has gone digital, Wal- Mart needs to focus on quality of the products and services it offers.
This is in view of the fact that other retailers are catching up in the discount retailing strategy and with the advent of online business companies such as Amazon, the battleground is getting tighter by the day.
With a focus on quality, the urgent need is to connect with the consumers in a manner that is concurrent with their life style, adopting social media as a communication tool and connecting with the consumers by telling a compelling brand story i.e. reinventing the emotive connect with Wal-Mart product and services.
The focus on holiday season and also new processes and technologies to keep improving the quality and creating more value deals will help Wal-Mart in sustaining & maintain the competitive advantage, and create sustainable future operations.
The international operational capabilities has to be expanded to develop long term growth opportunities, and will be the constituent of Wal-Mart’s growth both in US and new markets abroad with China as the focused market.
The strategic directions as mentioned above will in essence lead Wal-Mart effectively and the existing models that has helped the company to service 200 million customers and members globally each week, will only grow and thus the challenge is to create value in the existing strategic initiatives and bring changes periodically moving forward.
Works Cited
David, B. Y & Renee, K. (2013). Wal-Mart Update, 2011. Harvard Business School. Web. Date of access.09 December 2014
Pankaj, G. Stephen, B. & Ken, M (2004). Wal-Mart stores in 2013. Harvard Business School. Web. Date of access.09 December 2014
