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Previously, you worked with your group to compose a comprehensive paper with respect to Walmart. In that paper, your group made recommendations concerning 4 corporate strategies you believed the company should use to achieve or maintain a sustained competitive advantage.Choose one of the corporate strategies; and, building on that recommendation, work with your group to identify 4 initiatives HR could implement in order to support that strategy. In what manner would each initiative contribute to the strategies’ success?What should each initiative measure?How should each initiative be measured?Your response should be 750-1000 words. Be sure to cite your sources for information.
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Wal-Mart:
Introduction
Walmart is a retail behemoth. With over 10,000 stores operating worldwide, the blue and
yellow themed chain is renowned for its rock-bottom prices and infamous price ‘roll-backs’
(Smith, 2019). The company has consistently ranked among the best retailers on the Fortune 500
list for the last half-decade (Hunt, Watts & Bryant, 2018). When Sam Walton’s massive
superstore comes to town, it is essentially a death warrant for smaller retailers: there is simply no
competing with the discounts that Wal-Mart’s sheer size allows it to offer. With over 100,000
suppliers, Wal-Mart is a logistics pro. In the wake of Hurricane Katrina, while FEMA sputtered
to act, Wal-Mart’s nearly immediate disaster-relief mobilization was much-lauded (Brinkley,
2006:p.251). From its humble beginnings in 1962, Wal-Mart has strategically positioned itself to
be a global leader in low-cost retail. To remain relevant and competitive, however, Wal-Mart
must continually adapt. The company can leverage an endless array of corporate strategies to
maintain a sustained competitive advantage. This includes embracing technological innovation,
diversification, cost leadership, and mergers and acquisitions. The company may need to
reconsider its current customer strategy in order to remain within its competitive position. IN
order to continue as a leader, Wal-Mart can strategically focus on its goods and services,
customers, and innovation.
Cost Leadership
Cost leadership at Walmart would continue helping the business to attract and retain the
highest number of customers by offering its general merchandise at the lowest possible cost
without compromising its quality standards. It is essential to highlight that cost leadership
empowers an organization to offer its products and services at lower prices compared to its
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competitors; thus, increasing its ability to attract and retain more customers (Kharub, Mor &
Sharma, 2018). Therefore, Walmart can achieve cost leadership position by sourcing its products
from the most affordable vendors in the market. Cost leadership can also be achieved through the
companies large scale of operations, which enables it to enjoy economies of scale. By acquiring
different merchandise in large volumes, the company can enjoy discounted prices from different
manufacturers; thus, being in a position to charge reduced prices without harming its profit
margins (Stankevičiūtė, Grunda & Bartkus, 2012). Overall, Walmart can continuously leverage
its cost leadership corporate strategy to maintain its sustained competitive advantage. The
company should, however, remain conscious of the primacy of maintaining high quality when
embracing the cost leadership strategy if it intends to remain successful.
Technological Innovation
Walmart has continuously occupied a central position in the macro technology forces
arena; all of which have played a critical role in steering innovative developments over the years.
It is essential to highlight that Walmart has continuously exploited modern technological
developments to reach its local and global shoppers who require personalized brand relationships
(Trotter, 2019). As a result of technological innovation, Walmart has succeeded in the
modernization of its core operating systems; an initiative that has accrued increased speed,
efficiency, and adaptability in all its operations. For instance, the company’s supply chain,
merchandising, e-commerce, and human resource functions, among others, are technically
advanced to increase their efficiency. The company’s store associates have been trained using
virtual reality technology to increase their ability to deliver on the company’s mandate. Walmart
uses modern technologies such as cloud computing, cognitive computing, and digital reality,
among others, as strategic initiatives as a way of driving transformation while creating new
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opportunities (Trotter, 2019). Therefore, Walmart can uphold or beef-up its pursuit for
technological developments in a bid to maintain its sustained competitiveness in all markets
where it operates. Technological developments would increase the company’s ability to deliver
outstanding, reliable, and personalized shopping experiences for modern shoppers.
Mergers and Acquisitions
The success of Walmart in different parts of the world can be boosted by entering into
sound merger and acquisition agreements with other local companies in a bid to achieve and
retain a sustained competitive advantage. Merging or cooperating with local companies can give
the business an upper hand in new markets by gaining a clear understanding of the local cultures
and beliefs and offer the most appropriate products and services for such lifestyles. The strategy
would also give the company a reliable bargaining power in foreign jurisdictions in critical
matters such as taxation and licensing (Hunt, Watts & Bryant, 2018). Such a strategy would
prevent business failure as evidenced in the aborted efforts of the business to enter Germany and
South Korea (Hunt, Watts & Bryant, 2018). Therefore, the strategy would give the company a
sharp edge to pierce through new economies and markets. Acquisitions can help the company in
other aspects, such as technology (Trotter, 2019).
Diversification
Walmart has continuously invested in retailing a wide range of products and services in
the U.S.A and other parts of the world; an approach that has significantly boosted its
competitiveness and ability to expand its business operations (Walmart, 2019). As such, the
company can maintain its product and service diversification portfolio in a bid to uphold its
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competitive advantage. By continuing its diversification strategy, the company can attract and
retain more customers from different backgrounds, ages, and classes.
Goods & Services
“Everyday low price (EDLP) is the cornerstone of Walmart’s strategy” (Walmart,
2019). Walmart’s goods and services provide a “one-stop” shop for its customers: anything from
grocery items to outdoor and automotive supplies. Goods are transported from one of the
multiple distribution centers to ensure items are moved efficiently and quickly to provide as
many choices as possible for its customers.
Walmart also utilizes thousands of different
suppliers and vendors to remain competitive in the market (again remaining the top competitor
for a one-stop-shop).
Amazon specifically is a significant competitor to Walmart, along with others such as
Target, Costco, and eBay.
Although these competitors provide many of the same goods,
sometimes at lower prices, Walmart’s service listing sets them apart from the competition.
Services provided at Walmart’s brick, and mortar stores include financial (such as check cashing
or money transfers), auto services and health services (i.e., a full-service pharmacy, wellness
center, and eye care) (Walmart, 2019).
Walmart must continuously diversify its suppliers to keep a competitive advantage due to
their competition, who cannot only supply to same goods and some of the same services but also
deliver these goods or services directly to the customer’s home. With the rise of popularity of
Amazon and similar sites, Walmart has remained strategic by now offering shipping directly
from suppliers to eliminate the distribution center step and delivering to customer’s homes, while
still making a profit from items sold.
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Customers
The patrons of Wal-Mart have a notoriously bad reputation. One needs only scroll
through the ‘People of Walmart’ website for photographic evidence that the shameless dregs of
society frequent Sam Walton’s chain of megastore: one after another, the disparaging pictures,
usually snapped furtively via cell phone, are meant to show that only the lowest common
denominator of the general public frequents the merchant known for its smiley-faced rollbacks.
While the outlandish attire of Walmart People is fleetingly amusing, with 275 million weekly
customers, these are bound to be the peculiar exceptions to the rule (Smith, 2019). The
household income of the average Wal-Mart customer is $56,482 (Danziger, 2018). True, this is
lower than the United States average of about $61,000, but not by much (Amadeo, 2019). The
middle class is just as likely to shop at Wal-Mart as those that place lower on the socio-economic
index.
Recently Wal-Mart’s emphasis on rock-bottom prices has mainly worked to its advantage
since “low-income shoppers are growing their spending more rapidly than middle- and upperincome earners” (Thomas, 2019). In the past, Wal-Mart’s emphasis has been on providing the
most bang for customers buck, all while providing a wide array of goods to provide a one-stop
shopping experience. Need shotgun shells, bananas, and tube socks? Wal-Mart has you covered.
Wal-Mart’s acceptance of Supplemental Nutritional Assistance Program for online groceries is a
clear indicator that the company is intent on keeping the business of low-income customers.
Those who are enrolled in the federal program “select ‘EBT card’ as a payment option at
checkout when shopping on the Walmart Grocery website” (Dellinger, 2019).
Given the above, it is puzzling why Wal-Mart is attempting to shift its focus. The chain’s
“core customer base of lower-to-middle income consumers are losing ground to higher-income
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consumers with greater spending power and much higher expectations of what they want when
doing business with a company like Walmart (Danziger, 2018). In recent years, Wal-Mart has
been acquiring and collaborating by “working with higher-end brands, like Lord & Taylor and
Bobbi Brown, and adding services like Jetblack personal shopping service (Danziger, 2019). The
collaboration with Lord & Taylor is particularly perplexing, at least from Wal-Mart’s
perspective. Lord & Taylor “has bounced around between several corporate parents, causing the
chain to fall into a state of neglect” (Levine-Weinberg, 2019). The nation’s oldest department
store is set to close ten of its 48 stores, with pundits criticizing how out of touch the company has
become. Customers no longer flock to the malls that the once specialty retailer anchored, and
poor management has meant that the company has seen a steady decline in sales for the last few
decades. Wal-Mart, however, seems to be nonplussed: the luxurious connotations of the brand
name seem to be enough of a draw.
Wal-Mart’s acceptance of digital federal assistance is in line with the company’s core
competency: offering convenience for lower-income customers who are likely to be working
multiple jobs and limited childcare. Wal-Mart’s foray into higher-end brands is downright
puzzling. The company would be better off focusing on stealing customers from the middle-class
frequented Target rather than making an alliance with a no-longer-relevant high-end retailer.
Wal-Mart’s personalized shopping service is also a head-scratcher: the sole personal touch that
the chain has historically offered is the famed Wal-Mart greeter. Stereotypes and snobbery
abound, and the effort Wal-Mart needs to put forth to win over higher-income customers would
be better off directed at increasing sales to its existing clientele.
Conclusion
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Walmart’s competitive advantage within the industry comes from its cost
leadership, technological innovation, diversification, goods & services, and the loyalty of its
customers. Their promise to their customers of Everyday Low Price (EDLP) of goods and
ability to provide a one-stop-shop experience has created a loyal consumer base not only
domestically but also internationally. Their technological innovation has provided opportunities
to increase the speed in which customers can receive their goods as well as work to create
efficiency in how goods are transported as part of their corporate social responsibility to protect
the environment. Walmart’s partnerships with numerous vendors and suppliers have increased
the diversity of goods and is a continuous process to ensure that they can provide everything
their customer needs. These strategic planning steps have lead Walmart to be one of the largest
organizations globally, though they may not be the top performer financially, they remain at the
top for customer choice due to low prices and convenience.
References
Amadeo, Kimberly. (2019). Average Income in the USA by Family and Household. The
Balance. Accessed at: https://www.thebalance.com/what-is-average-income-in-usafamily-household-history-3306189
Brinkley, Douglas. (2006). The Great Deluge: Hurricane Katrina, New Orleans, and the
Mississippi Gulf Coast. New York: Morrow.
Danziger, Pamela. (2018). Can Wal-Mart Attract Affluent Customers? Forbes. Accessed at:
https://www.forbes.com/sites/pamdanziger/2018/06/04/can-walmart-make-its-up-marketmove-work/#58a8a21678fe
LESSON 10 GROUP APPLICATION – COMPETITIVE STRATEGY
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Danziger, Pamela. (2019). Four Demographic Trends That Many Retailers Missed, But Not
Walmart. Forbes. Accessed at:
https://www.forbes.com/sites/pamdanziger/2019/05/05/four-demographic-trends-thatmany-retailers-missed-but-not-walmart/#1bcc598c5c81
Hunt, I., Watts, A., & Bryant, S. (2018). Walmart’s international expansion: successes and
miscalculations. Journal Of Business Strategy, 39(2), 22-29. doi: 10.1108/jbs-02-20170013
Kharub, M., Mor, R., & Sharma, R. (2018). The relationship between cost leadership,
competitive strategy, and firm performance. Journal Of Manufacturing Technology
Management. doi: 10.1108/jmtm-06-2017-0116
Levine-Weinberg, Adam. (2019). Lord & Taylor Confirms 2 More Store Closures: More Will
Follow. The Motley Fool. Accessed at: https://www.fool.com/investing/2019/06/10/lordtaylor-2-more-store-closures-more-to-follow.aspx
Smith, Craig. (2019). 60 Amazing Wal-Mart Statistics and Facts. Expanded Ramblings.
Accessed at: https://expandedramblings.com/index.php/walmart-statistics/
Stankevičiūtė, E., Grunda, R., & Bartkus, E. (2012). Pursuing A Cost Leadership Strategy And
Business Sustainability Objectives: Walmart Case Study. Economics And
Management, 17(3). doi: 10.5755/j01.em.17.3.2143
Thomas, Lauren. (2019). This statistic is a key reason why Walmart, Target, and Costco are
thriving while other retailers aren’t. CNBC. Accessed at:
https://www.cnbc.com/2019/06/05/this-is-why-walmart-and-target-are-thriving-otherretailers-arent.html
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Zwirz, Elizabeth. (2019). Walmart says EBT cards can be used for online grocery shopping at all
pickup locations. Fox Business. Accessed at:
https://www.foxbusiness.com/industrials/walmart-ebt-cards-online-grocery-shopping
Trotter, C. (2019). Walmart: The Startup Down the Street. Retrieved from
https://deloitte.wsj.com/cio/2019/03/13/walmart-the-startup-down-the-street/
Walmart. (2019). Our Business. Retrieved from https://corporate.walmart.com/our-story/ourbusiness
Walmart. (2019). Services | Walmart.com. Retrieved from
https://www.walmart.com/cp/services/6163033

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