Executive Summary
Walmart is the world’s largest retailer, it focuses on offering a wide range low cost merchandise to its customers.

Analysis
Competitive position of Wal*Mart
As shown in exhibit 3, Walmart dominates the retailer market with highest sales numbers, almost 4 times that of Target. Sales per square foot at Walmart equaled $300 as compared to $209 of target and $147 at K-Mart. It also has the highest sales growth of 17.5% amongst its direct competitors. This strong financial position is achieved because of its pricing strategies, use of technology, focus on centralized communication and at the same time keeping its costs/expenses down. Some of the examples of its savings in terms of expenses are:
• Advertising expense were 1.5% of discount store sales compared to 2.1% of direct competitors.
• Operating expenses were 18.1% of discount store sales as compared to 24.6% industry average.
• Cost of inbound logistics, which was part of cost of goods sold, is 3.7% as compared to 4.8% of direct customers.
• Rental expense was 3% of discount store sales, as compared to average 3.3% of direct competitors.
• 10% of space devoted to inventory as compared to 25% industry average.

Wal*Mart Strategy
Pricing Strategy.
The core strategy for Wal*Mart is cost leadership. Sam Walton had a philosophy that drove everything in his business – he believed in the value of the dollar and was obsessed with keeping prices below everybody else’s. Ever since the inception of Wal*Mart it has applied the strategy of Cost Leadership. Few major factors underlying Wal*Mart’s low cost strategy are:

a) Economies of scale – Walmart’s size allows it get its costs down, buy the merchandise at lower cost from vendors, and have a cheaper distribution network than competitors. Walmart’s fleet of trucks is one of the biggest in the country.
b) Economies of Learning - Investing