2-3 page executive summary
Running Head: WAL-MART STORES, INC. COMPETITIVE STRATEGY ANALYSIS 0
Wal-Mart Stores, Inc. Competitive Strategy Analysis
Competitive Analysis of the Wal-Mart’s Industry
Wal-Mart has to direct attention on competitive rivalry in its industry together with threats that come from new entrants. This is because the two external factors have a significantly strong force on the company. Below are the five forces:
The intensity of competitive rivalry – with many competitors in the industry, the level of competitive rivalry is very strong. The competitors are of different size. These competitors are very aggressive in the market. Therefore, there is a strong force of competitive rivalry in the market.
Bargaining power of buyers – there is a weak intensity of bargaining power of buyers that the company faces in the industry. With a large number of buyers in the market, it becomes difficult for buyers to exert pressure on the firm. This means that bargaining power of buyers is weak in the industry.
Bargaining power of suppliers – the retail industry has got many suppliers. With high availability of suppliers, the competition among them becomes very strong. This produces a weak bargaining power of suppliers. The large numbers of suppliers are aggressively competing for the limited space that is available in the retail stores.
The threat of substitutes – there are a wide variety of goods that are being offered by the organization together with some services that seem to have no substitutes (Baron, 1995). It becomes very difficult for buyers in the market to buyer different products since there is a wide variety that is available at Wal-Mart. This makes the threat of substitutes to be weak.
The threat from new entrants – this threat is very strong since the possibility of new firms entering the market is very high.
Innovative and Technology Trends
There are some innovative technology trends that have been introduced by the organization. This was carried out by the organization so as to help improve its performance in the industry. The first type of innovative technology trend is changing the process of decision-making through the introduction of information and communication technology when it comes to decision-making. This helped the organization to enhance its efficiency together with the responsiveness of its customers. Due to the use of information technology in making its decision, the organization has seen good performance.
The second type of innovative and technology trend is when it comes to the use of the computer in inventory control. The organization was the pioneer of using the computer in controlling its inventory. Through this, the organization initiated EDI with its vendors. Apart from that, it also introduced bar code scanning for point-to-point as well as inventory control. In the year 1984, the organization invested $24 million to purchase its satellite that made it possible for to link cash register and store sales with inventory control and supply chain management (Barney, 2012).
Wal-Mart’s Company Situation
Being in operations for a long time, the organization has managed to occupy the top spot in its retail industry. Wal-Mart has managed to tap into different markets and capture a large number of buyers. The core competencies of this company are logistical superiority, supply chain management, and buying power (Christopher, 2016). Due to this, the organization has the capability of selling its products at lower prices compared to those of competitors in its market. Wal-Mart has a wide range of resources that enables it to achieve its success. It has invested so much in resources. These resources can be classified as tangible and intangible. Among the tangible resources is the real estate. Most buildings occupied are owned by the company. It also owns most of its surrounding storefronts. It tries to move away from the usual commercial practice being done by most of its competitors where stores are leased. The biggest intangible resource that the company has is an experience. The management of the company knows better ways of managing large retail chain. This is seen when it comes to how the firm has dominated the United States market. This strategy has been employed by the company in its overseas market.
Wal-Mart’s Organizational Structure
The organizational structure of Wal-Mart determines its business activities. The organizational structure also introduces limits when it comes to the manner in which the organization addresses its problems. The organization structure positively interacts with its organizational culture; hence making it possible for the organization to achieve success together with a competitive advantage. The structure and culture of the organization are designed to embrace change. One thing that is consistent in the organization is change. The organization is always changing. The willingness to alter and flexibility has made it possible for the company to adapt easily to changes that are taking place in its external environment. The organization culture and culture promotes a unique mindset, and this promotes the resilience of the human resource. Therefore, the organization structure promotes success and competitiveness of the company.
References
Anonymous. (2012). Wal-mart stores Inc., Case 6.
Barney, J. B. (2012). Purchasing, supply chain management and sustained competitive
advantage: The relevance of resource‐based theory. Journal of supply chain management, 48(2), 3-6.
Baron, D. P. (1995). Integrated strategy: Market and nonmarket components. California management review, 37(2), 47-65.
Christopher, M. (2016). Logistics & supply chain management. London, UK: Pearson UK.
