An Analysis of Wal-Mart's Competitive and Corporate Strategies

This report provides a critical analysis of Wal-Mart's competitive and corporate strategies, focusing on key components that contribute to its sustained competitive advantage. It identifies Wal-Mart's use of cost leadership and differentiation strategies, supported by economies of scale, effective stock control, and low-cost sourcing from China. The analysis extends to Wal-Mart's functional strategies, such as low-cost HR policies, and corporate-level strategies, including mergers and acquisitions like the Asda merger. Technology is highlighted as a crucial component, enabling efficient operations through systems like POS, performance trackers, and satellite communications, reducing manpower and operational costs. The report concludes that these strategic elements have enabled Wal-Mart to maintain a dominant position in the retail industry.

STRATEGIC-
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
Critical analysis of competitive and corporate strategies of Wal-Mart along with key
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.
Critical analysis of competitive and corporate strategies of Wal-Mart along with key
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
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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.
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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. and Ross, D.G., 2013. Taking industry structuring seriously: A strategic
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. “strategic management” [Online]. Available
through:<http://searchcio.techtarget.com/definition/strategic-management>
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