Walmart's Competitive Advantage: A VRIO Resource Analysis Report

This report conducts an in-depth analysis of Walmart's resources using the VRIO framework. It begins with an overview of Walmart's global retail operations, including its history, current structure, and financial performance. The internal analysis focuses on identifying resources that provide a competitive advantage, such as the skills and competencies of its 2.2 million employees, the breadth of its product offerings, and its extensive store presence coupled with a growing online business. The VRIO framework is applied to evaluate these resources based on their value, rarity, imitability, and organizational structure, determining their potential to sustain Walmart's market leadership. The report highlights how Walmart leverages its resources to meet customer demands and maintain its competitive edge in the retail industry. The report also references the financial statistics for the year 2019 and the company’s different divisions.

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Management
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Author Note

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The importance of the effective management of the business operations is seen to
increase in a significant manner in the recent years and the enhanced intensity of the business
competition is considered to be one of the key factor responsible in influencing the senior
management of the organizations for incorporating scientific management inside their
organizations. Other than this, majority of the companies operating in retail industry are
facing the necessity of managing the existing business competition with the effective
management of their resources and under such situation, it becomes important for the
companies to make sure that they have a clear idea of their capability and the ability of their
resources in providing them the much required competitive advantage in their respective
industries (David & David, 2013). Hence it becomes crucial for the companies to conduct the
capability analysis and the tools such as the SWOT Analysis, VRIO Framework, Resource
Based View plays an important role in analysing the resources of the group in an effective
manner (D’Auria, 2014). The paper provides an in depth analysis of the resources of
Walmart, a market giant in the global retail industry. The paper follows the VRIO framework
for the capability analysis and includes a brief overview of the group and the business
operations of it as well.
Company Overview:
As mentioned earlier, Walmart is one of the largest organizations in the global retail
industry in terms of the market share and the revenue. The chosen organization was formerly
known as Wal –Mart Inc. and from the year 1970, it is known as Wal-Mart Stores, Inc
(Walmart.com, 2019). The group is a public limited group and was founded in the month of
July, 1962 in Rogers, Arkansas (Walmart.com, 2019). The founder of the organization was an
eminent American entrepreneur, Sam Walton. The organization is currently headquartered in
Bentoville, United States (Walmart.com, 2019). The group have a strong store presence
across the globe which enables the group in serving the clients across the world. The current

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managerial team of the group includes the chairman of the group, Greg Penner along with
President and Chief Executive Officer of the group, Doug McMillon (Walmart.com, 2019).
Other than this, the current owner of the group, Walton Family, is seen to contribute
in the financial sustainability of the group. In addition to this, the group is currently
experiencing the expertise of 2.2 million number of employees (Walmart.com, 2019). Apart
from this, the group is able to increase the efficiency of their business operations with the
formation of the divisions such as the Global eCommerce, Walmart International, Sam's Club
and Walmart U.S. Along with this, the group has the expertise in providing electronics,
clothing, footwear, toys, jewellery, health and safety equipment along with sporting goods
and accessories. In addition to this, the services such as the Walmart-2-Walmart, Walmart
Pay, Walmart.com and Walmart MoneyCard are also increasing the effectiveness of the
business operations of the group. Considering the financial statistics, the revenue of the group
in the year 2019 is 514.4 billion US dollars and along with that, the operating income of the
group in the same year is 21.96 billion US dollars (Walmart.com, 2019).
Internal Analysis:
The internal analysis of the group can be successfully conducted with the application
of various tools such as the SWOT, VRIO or RBV analysis. As the capability analysis of
Walmart is to be conducted on the basis of the VRIO framework, it becomes important to
understand the tool and the application of the tool in identifying the resources that have the
potential to provide the necessary competitive advantage to the chosen group. Considering
the VRIO framework, it is important for the managers of the group to identify the resources
that have the capability to satisfy all the criteria of the tool such as Valuable, Rare, Inimitable
and Organized to be recognised as capable of providing the competitive advantage to the
organizations (Simão & Diaz, 2013).

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Considering the business operations of Walmart, one of the important success factors
or the resource of the group that have the prospective to provide the competitive advantage to
the chosen group is the skills and competencies of the employees of the group. 2.2 million
number of employees are currently employed in the group where 1.5 million employees of
the group are operational in their United States plants along with 700000 number of
employees in their other plants across the globe (Walmart.com, 2019). The skills of the
employees in various domains such as the customer query handling, management of the
customer inputs, developing the best quality products and services for their clients is playing
a vital role in the success of the group. Considering the enhanced level of the business
competition in the retail industry, it becomes important for the managers to make sure that the
number of the faulty operations and minimized and their products are developed in
accordance to the customer preferences. This enables the companies to build a strong
reputation in their respective industries and that influences the clients in repetitive purchases.
Hence it becomes important to manage the service excellence of Walmart as well and the
excellent training and developmental activities of the group enables it for meeting the training
and the development needs of the employees of the group.
The introduction of Walmart Academies is observed to provide simultaneous
classroom and sales floor training to the employees of the group for improving the retail
skills of the employees along with the soft skills such as the leadership, change management
and communications. The acceptance of the training activities amongst the employees of the
group is seen to be significant and that is pretty evident with the participation of 450000
number of associates in the Walmart Academies (Corporate.walmart.com, 2019). Other than
this, the group is able to design an educational program in association with Guild Education
in the name of Live Better U which provides the scope of debt free high quality degrees in
various domains such as the Supply chain management and the business management at the

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cost of just 1 US dollar per day (Corporate.walmart.com, 2019). The initiatives of the group
in meeting the developmental needs of the employees contributed in the improvement of the
approaches of the employees in handling the clients and meeting the demands of the clients.
Hence it becomes valuable for the group and at the same time, the bulk monetary investment
required for the set-up of the training activities make it costly to imitate for others.
Other than this, the expanded product offerings of the group is observed to be an
important factor capable of providing the competitive benefit to the group. The organization
sells a series of electronics, Jewellery, Home and furniture, Clothing, Health and beauty,
Sporting goods and fitness along with Grocery products. Considering the offerings of these
products, the group is able to achieve the variety on the basis of the quantity and flavours
(Walmart.com, 2019). Hence it becomes effective for the group in meeting the diverse
demands of the clients in an efficient manner. Other than this, the increased offering of the
products enables the group in targeting a larger number of clients which eventually increases
the sales of the group. Hence it is excessively valuable for the group. However, the
establishment of such wide product range forces the group in forming a sustainable supply
chain which in many cases, requires considerable amount of monetary investment. Hence it is
costly to emulate for other enterprises and is rare in the global retail industry.
Other than this, the success of the companies in reaching out to the clients with their
products and services also has a positive impact on the business performances of the group.
The group is able to increase their store presence to 11,368 number of stores across the globe
by the month of April 2019 (Walmart.com, 2019). Along with such strong store presence, the
group is able to strengthen their online business operations with a precise focus on the
increasing number of youth buyers. The strong store presence of the group also helps it in the
effective management of the marketing and the promotional activities which is significantly
valuable for the group in communicating the information of their products and services to the

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clients along with the news of the discount or the new offerings. As the marketing and the
promotional campaigns is crucial for the chosen group in appealing a larger number of
clients, the availability of the store outlets plays a substantial role in the minimization of the
infrastructural cost. Hence the significant strong store presence and the efficient online
business operations of the group is valuable for the growth and survival of the group. Other
than this, the establishment of such high number of stores across the globes requires a strong
monetary support from the part of the shareholders of the group and under such situation, the
mentioned resource of Walmart is costly to imitate for the other competitor organizations of
retail industry and rare at the same time. In addition to this, the effective link up between the
other business operations of the group and the mentioned resource is pretty strong and
portrays the establishment of a stable organization from the part of the group for the
generation of the customer value.

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References:
Corporate.walmart.com (2019). Working at Walmart. Retrieved 5 August 2019, from
https://corporate.walmart.com/our-story/working-at-walmart
D’Auria, A. (2014). Resource-based development: A proposal for tourism in Val d’Agri.
Acta Oeconomica Universitatis Selye, 3(1), 9-22.
David, F. R., & David, F. R. (2013). Strategic management: Concepts and cases: A
competitive advantage approach. Pearson.
Simão, J., & Diaz, P. (2013). An extended VRIO model as a framework for sustainable
tourism planning: a review. Tourism as a Tool for Development, 4, 71.
Walmart.com (2019). | Save Money. Live Better. Retrieved 5 August 2019, from
https://www.walmart.com/
Walmart.com (2019). Products-All. Retrieved 5 August 2019, from
https://www.walmart.com/tp/new-products-all