Critical Analysis of Competitive and Corporate Strategies of Wal-Mart
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This article provides a critical analysis of the competitive and corporate strategies of Wal-Mart, including key components and their impact on the company's performance and competitive advantage.
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STRATEGIC- MANAGEMENT
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TABLE OF CONTENTS INTRODUCTION...........................................................................................................................1 CriticalanalysisofcompetitiveandcorporatestrategiesofWal-Martalongwithkey components.............................................................................................................................1 REFERENCES................................................................................................................................3
INTRODUCTION Strategic management is mentioned as identification as well as description of the key competitive strategies that managers in the organisation will formulate and implement to gain the better and effective performance and competitive advantage for their organisation (Rouse, 2018). As it was analysed in the famous book of Michael Porter, three basic competitive strategies are there for company like overall cost leadership, differentiation and strategy of focus (Hill, Jones and Schilling, 2014). In present case, Wal-Mart which is an international retail brand having its headquarters in the US, first started using these strategies as compared to other rivals to gain competitive advantage. Scenario also states that discounting on merchandise is a strategy which is also first adopted by Wal-Mart after second world war.It has become able to sustain its competitive advantage through its system of distribution based on satellite and also applied strategy to keep the establishment of business stores at low cost from outside the small and medium sized towns in US and other overseas nations. CriticalanalysisofcompetitiveandcorporatestrategiesofWal-Martalongwithkey components. As per the given scenario, Wal-Mart have purchased massive quantities of items from its suppliers to form economies of scale along with their effective system of controlling the stock provides them support in making low rate of cost of operations as compared to their rivals (Peppard and Ward, 2016). They usually purchase or import their products from China at low cost and also provide products to its consumers at lowest selling prices; therefore, it has achieved a great customer loyalty. Thus, it can be said that the first strategy of company is low cost leadership along with differentiation strategy. Managers of Wal-Mart are engaged in three business level strategic planning like corporate level, functional and business level strategies. It is considered that functional strategy of Wal-Mart has always served the overall companies strategies so that corporate strategies of organisation has applied effectively and effectively (Pearlson, Saunders and Galletta, 2016). For Wal-Mart, it is analysed earlier that its corporate and business level strategies is low cost leadership. Further, its functional strategies like Low cost HR policies are analysed from which it has become a low-cost leader of employment which supports them to retain their qualified 1
employees and make employment costs lower than others. Through this, Wal-Mart has become successful in sustaining its predominant competitive advantage over its rivals. Along with this, it has also applied strategies like merger and acquisition of other top most retail companies first in US and then now, it is also trying to increase its market share in European countries. Merger of Wal-Mart with Asda is the best example of its effective corporate-level strategy. It is a leader in retail industry, having a high amount of fiscal revenue which makes it a largest corporation in the world. Technology is considered as key component of strategy of Wal- Mart which enable them to develop their branches in other countries and regulate its operations through well-equipped technology systems like POS, performance tracker, market research, UPC and satellite systems. These major systems have reduced the manpower requirement of company and saved its cost of employment (Makadok, and Ross, 2013). Thus, decline in cost of operations has provided them major capabilities to sustain in competitive business environment in retail industry. 2
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REFERENCES Books and Journals: Hill, C.W., Jones, G.R. and Schilling, M.A., 2014.Strategic management: theory: an integrated approach. Cengage Learning. Makadok,R.andRoss,D.G.,2013.Takingindustrystructuringseriously:Astrategic perspective on product differentiation.Strategic Management Journal.34(5). pp.509-532. Pearlson, K.E., Saunders, C.S. and Galletta, D.F., 2016.Managing and Using Information Systems, Binder Ready Version: A Strategic Approach. John Wiley & Sons. Peppard, J. and Ward, J., 2016.The strategic management of information systems: Building a digital strategy. John Wiley & Sons. Online: Rouse,M.,2018.āstrategicmanagementā[Online].Available through:<http://searchcio.techtarget.com/definition/strategic-management> 3