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Wal-Mart Stores Inc., June 2012

In: Business and Management

Submitted By sebnem94
Words 1483
Pages 6
Wal-Mart is not only the world’s largest retailers, but it is also the world’s largest company in terms of revenue ($485 billion USD in 2015) and the world largest private employer with 2.2 million employees.

The case describes the growth of Wal-Mart under Sam Walton’s values and leadership and reviews the main functions and operation of the company.

Q.1 The retail industry is a highly competitive industry. Although Wal-Mart can rarely be beaten on price, there are many big discounted retail stores such as Target and K-Mart. There are also competitors that offer other advantages such as higher quality (Whole Foods) or better service (Best Buy). There is also little differentiation between the retailers. As seen on Table 2, the sales increase (%) in international markets is higher that of the US market, which means faster growing markets and that the growth can be attributed the industry attractiveness. Table 4 shows that Wal-Mart is doing a lot better in terms of financial performance against its competitors. This means that its performance in more attributable to its competitive advantage rather than industry attractiveness.

Competitive advantage has a bigger effect to the performance of Wal-Mart. Wal-Mart’s strategy is low prices and thanks to the huge size of the company, it is able to employ economies of scale in the best way possible. It can negotiate very low prices and offer cost savings to customers. It is also able to import and produce products at very low prices thanks to its size. Its distribution system is also used for cutting costs and also helps the company differentiate itself with faster delivery. It is also a leader in using technology and IT for cost cutting, sales forecasting and efficient distribution. Sam Walton’s beliefs that create the culture of the company put extra importance on customer service and differentiates the company…...

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