SOE11440 Marketing within the Global Economy

Marketing within the Global Economy: A case study of Walmart
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1. Summary statement of the economic environment
The economic environment of an organization refers to how various economy states such
as an economic surge or depression would influence the business of multinational corporations
within the specific economy (Ben-Ner, Kong and Lluis 2012). Walmart is always alert towards
the economic environment which it operates in due to their model of sales which is depended on
low-profit margins and high sales volumes which could be altered easily. In an economic surge,
their strategy of the low cost of goods would not be effective to increase their sales, while on the
contrary, during a time of economic depression/recession their high volume goals would be
threatened. Therefore, Walmart operates in an unstable economic environment and should ensure
that it conducts a thorough market economy study before entering an unbalanced economy to
prevent the possibility of losses. In addition, as an international company, Walmart has more
opportunities for taking advantage. For example, when the domestic market is highly saturated or
competitive or when the regulations and laws make it not economically feasible to proceed with
its functions in the domestic market, Walmart can always shift its operations to foreign markets
and expand in a different economic environment.
2. Evaluation of current competitive advantage
According to Schneider and Bartram (2017) an organizational competitive advantage
exists when consumers perceive the products of the company as superior to that of competitors.
Wal-Mart operates under different strategies in order to sustain a competitive environment.
Currently, the company is widely known for its unique selling proposition of offering “every day
low prices” philosophy. The same prices have been offered in all its chains that have enabled the
company to sustain rapid competition over its competitors offering different prices throughout
different chains. The Wal-Mart’s products are competitively priced and the company negotiates

with suppliers and manufacturers to make sure all benefits are passed to end customers. The
company also gives “black Friday” offers to the customers. Recently the “Black Friday event has
become famous as the company offers some products at throwaway prices1”. As the “Black
Friday” strategy has been termed as “most successful in terms of attracting new customers and
increasing market segmentation”2 . Furthermore, many companies globally under the same
industry have copied this strategy. Furthermore, this pricing strategy has exposed the company
to more opportunities on global markets with the majority of new and existing customers
preferring low prices and quality products over brand names and overpriced products. In
addition, through diligent expenses, the company has been able to cope with the price-cutting
strategy. With lowering of prices, Walmart has blocked potential entrant of new competitors in
the industry that might result in unnecessary competition hence reducing its profit margins. To
maintain prices constant, Walmart has used different approaches. For example, the company
achieves low costs by minimizing human resource expenditures and through automation and
related technologies.
The strong customer service offered by the company has developed customer loyalty and
brand trust that has facilitated to repetitive purchases. Furthermore, Wal-Mart’s customer service
is characteristic unique to the chain. The competent customer care representatives offer great
services which provide friendly experience to every customer. The brand has further gained trust
globally with the company ranked number twenty-two in the list of most valuable brands
(Smithson 2018). The company also offers retail services over large market segmentation
covering every consumer of its target market.
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Wal-Mart’s Broad product assortments is another way the product has a competitive
advantage. The company deals with large assortments of products and broad stoke keeping units
(SKU) which has assisted the company to generate high-profit margins and low prices. Broad
assortments of products also assist the company to retain its existing customers as they are able
to shop a variety of goods conveniently. Furthermore, in order for the company to succeed in
generic strategies implementation, Walmart has relied on management approaches, process
efficient and beneficial strategies like intensive growth strategy that have assisted in cost
reductions. Additionally, with the company having the strategic objective of keeping low costs,
Walmart is known for offering large-scale imports of goods with low costs from China.
The operation of Wal-Mart Company are well managed with most qualified strategic staff
being in charge of all the activities taking place in the company. According to Tripathi and
Kochhar (2016), management of huge retailers requires effective operations management as it is
hard to cope with competition from small retailers. Furthermore, Walmart operates under
customer caring environment as it gives attention the way it operates so that their consumers can
be able to identify their products fast and their shelves are full filled. Products tags are placed
strategically with bright colors so that customers can be able to identify what they are shopping
easily. Furthermore, the solid supply chain of the company serves millions of customers annually
with small profits on each sale but its inventory has many sales per unit.
In conclusion, the strategies used by Walmart Company to have competitive edge include
high-quality products, fair prices for customers from all sources of incomes, effective customer
delivery and product differentiation that suits the changing needs of customers and skilled and
experienced staff. The company’s high turnover ratio is believed to depend on goods turnover to
generate high profits. Through the analysis, it can be concluded that the common way used by