Wal-Mart Stores in 2003 Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Question 1

What, historically, have been Wal-Mart’s sources of competitive advantage in discount retailing?

Wal-Mart is the largest retailer around the world that continuously focuses on meeting the expectations of its customers by providing their desirable goods. There are several factors that contributed to the success of Wal-Mart and became the reason for their competitive advantage. The main source of Wal-Mart’s competitive advantage in discount retailing is their several strategic decisions. The selection of geographical locations that were not being served by other competing players in the market, particularly in the rural areas and small towns. This strategy of the company allows them to get the competitive edge over its rivals by being the only discount retailer provider in these areas and towns.

In addition to this, the inventory management methods and plans of the Wal-Mart is another source of their competitive advantage. The company has always been in the leading position to develop and implement innovative and cost-effective techniques that help them to efficiently manage their inventory.

Furthermore, Wal-Mart has efficient operation management as its operations activities are aligned with the objectives of the company to achieve maximum efficiency at lower costs. The company also has a competitive advantage because of their distribution centers. There are many distribution centers of the company that is functioning all around the world that allows the company to display their more products by lowering the space area that was devoted to the inventory as well as help them generate larger sales.However, Wal-Mart being a low cost leader in the industry always succeed that provides them edge over its rivals.

The relationship of the Wal-Mart with vendor also provides them a competitive advantage as it focused on specific suppliers along with their costs minimizing and efficiency maximizing strategy. The company has the open door policy of ideas sharing and discussing performance with its associates.

The culture of the Wal-Mart was among the one of the most important factors that gave them a competitive advantage over its rivals. The culture of the company focuses on developing loyalty and trust between their employee’s customers and supplier as Wal-Mart value their customers and employees most. The business practices and culture of the Wal-Mart is different and unique that differentiates it from its industry rival.

Question 2

Which of these sources of competitive advantage are sustainable? What are the sources of threat to Wal-Mart’s business model?

Sustainable Sources of Competitive Advantage

As, Wal-Mart has expansion all over the word and is known for providing variety of products in one store that assist them to retain its customer and maintain long term relationship with them. However, Wal-Mart almost all of the sources of competitive advantage are sustainable due to the fact that it is not easily replicable by other players in the market. Secondly, the other competitors did not have the expertises, skilled staff and knowledge that Wal-Mart has.

The offering products at low cost as well as internal operations and culture of the company are the sources of competitive advantage that are sustainable. Secondly, the strategic decisions of the Wal-Mart are the key source of competitive advantage that is sustainable. Hence all these competencies of the company provide them an opportunity to get sustainable competitive advantage over it competitors.

Sources of Threat to Wal-Mart’s Business Model

However, although the company is very successful in order to maintain its competitive advantage over its rivals but there are few threat to its business model. The several lawsuits against the Wal-Mart are the major threat to its business model as it may affect the operating activities in different countries.

In addition to this, major threats to the business model are associated with the changing market conditions in the retail industry as it will greatly impact the profitability and sales of the company. The changing perceptions and preferences of the customers related to the products they purchase.

These external threats require the company to make constant strategic changes in their business model in order to maintain their competitive advantage over its rivals.\ Moreover, aggressive competitions from other players as the competition in the retail industry is increasing and Wal-Mart is facing competition from local, regional and international firms that can be another major threat for the Wal-Mart business strategies...........................

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