Wal-Mart’s winning strategy in the U.S. was based on selling branded products at low cost. In its early years, Wal-Mart’s strategy was to build large discount stores in small rural towns. By contrast, competitors such as Kmart focused on large towns with populations greater than 50,000. Wal-Mart’s marketing strategy was to guarantee
“everyday low prices” as a way to pull in customers. Traditional discount retailers relied on advertised “sales.”
To analyze the specific activities through which firms can create a competitive advantage, it is useful to model the firm as a chain of value-creating activities.
The goal of these activities is to create value that exceeds the cost of providing the product or service, thus generating a profit margin.
The value chain also is useful in outsourcing decisions. Understanding the linkages between activities can lead to more optimal make-or-buy decisions that can result in either a cost advantage or a differentiation advantage.
By using the SWOT (strengths, weaknesses, opportunities, threats) analysis for Wal-mart, we will be able to assess the needs of the corporation.
First, a quick look at the strengths. Wal-Mart is the giant in retail industry having high purchasing power of goods from supplier in bulk quantity at lower prices. The good thing about Wal-mart that its shifts the low cost advantage to customer and available the products at lower prices. Customers feel very convenient to find most of the products under on roof. Wal-Mart has efficiently used the information technology for tracking the goods on Wal-mart stores shelves. The system automatically detect the lower quantity and generate orders for suppliers.
Supply chain management and logistics is one of the strengths of Wal-mart. This allows Wal-mart to utilize the Just in time inventory concept and avoid the pilling up inventory to save the extra