STRM043: Walmart's Activities, Competitive Edge, & Sustainability

This essay provides a detailed analysis of Walmart's principal functions and activities, highlighting the aspects of distribution and purchasing that contribute to its competitive advantage. It examines the sustainability of these advantages through durability, distribution infrastructure, replicability, and transferability. The essay also addresses the challenges Walmart faces, including income stagnation among core customers and deflation in key product categories. Furthermore, it suggests measures to sustain recent performance, such as maintaining corporate culture and managing change effectively. The conclusion emphasizes that Walmart's competitive strengths lie in its unique purchasing and distribution strategies, which are difficult for competitors to imitate, ensuring long-term sustainability. Desklib provides more solved assignments for students.

MANAGEMENT

PRINCIPAL FUNCTIONS AND ACTIVITIES OF WALMART IN
WHICH COMPETITIVE ADVANTAGE LIE
Aspect of Distribution
• In the year 1970, Walmart tried to build their own
distribution centre which operated independently from the
third party and the suppliers (Kumar and Pansari 2016)
• System of Cross-Docking
• Inclusion of the Radio Frequency for control of inventory
• Within five days ordering cycle

CONTD….
Aspect of Purchasing
• Tremendous size of Walmart has tried to allow them to lean
on the various suppliers and make the customers to receive the
different products at a reasonable rate and low cost as well
• The different suppliers in the market rely heavily on business
of Walmart as there are different agents of purchasing at
headquarters of Walmart

CONTD….
• There is other additional distinct kind of competitive
advantage which is inclusive of the fact that the purchasing
agents is isolated from the organization possibly which
allows Walmart executives to place additional kind of
pressure on them
• Therefore, it can be analysed that the suppliers dance to the
own tune which is the huge gaining competitive advantage

SUSTAINABILITY OF COMPETITIVE ADVANTAGE
• The competitive advantage of Walmart lies in the manner
in the manner they perform the different activities as the
core principles of Walmart’s philosophy and principles
which helps them making the overall aspect sustainable
• Durability- Walmart tried to keep up with technological
innovation which is the continuous improvement type of
attitude

CONTD….
• Distribution Infrastructure- Walmart is one of the
companies which has helped them in generating
sustainability which will improve the overall technological
improvements of Walmart distribution network
• Replicability- It is the other aspect which is not possible for
the other companies to replicate the similar technological
advancements as there is little information available on the
internet

CONTD….
• Transferability- As there is continuous and high development cost,
it can be seen that it is hard to achieve the respective position.
• As per the philosophy of Sam Walton, it can be inferred that the
technological advancements of Walmart is main driving force for
the other companies as the Walmart is bound to be looking in the
correct direction

CHALLENGES FACED BY WALMART NOW
AND IN FUTURE
• The business of Walmart is under pressure and it is
the perfect storm which is hurting the growth of sales
and it affects the brand image negatively
• Core customers of Walmart is struggling with income
levels which are flat along with savings from lower
prices of fuels which is translating in spending of
customers in retail

CONTD…
• The business if also under pressure of Walmart as the
main reason is deflation in the different key categories of
products such as food and it affects the strong dollar
abroad and it affects the growth of Walmart

CONTD…
• With the help of the five year stock
performance of Walmart, it can be analysed
that the stock of firm has increased, however
there can be diminishing value in the future as
the tastes and preferences of customers are
changing and due to deflation, it can affect the
overall value of firm (Suri 2016)

CONTD…
• From the stock return history of Walmart, it
can be identified that the prices of stock has
raised to a large extent due to the price
strategies applied by the company as to
improve their brand image (Walmart.com
2019)

MEASURES TO SUSTAIN THE RECENT
PERFORMANCE
• Proper maintenance of the existing corporate culture of the firm
can be helpful for expansion of the organization (West, Ford and
Ibrahim 2015)
• Managing the overall change which will be able to adopt to the
changes when expanding the business internationally
• Maintaining the entire strive for analysing the operating stores
and it will further costs while offering customers more