Walmart Inc.
Walmart Inc.
Walmart Inc. is a renowned multinational company that operates numerous forms of retail enterprises that range from supermarkets, departmental stores amongst others. Walmart Inc.’s key operations are comprised of three classifications that Walmart U.S, Walmart International and Sam’s Club. The research paper aims to assess Walmart’s business-level strategies, corporate level strategies, Competitive environment and the market cycles.
Business-Level Strategies
Walmart has sustained the top position in the retail market successively for numerous years. At the heart of Walmart’s business strategy is cost leadership. The company has led the United States selling market through integration of the lowest rates. Currently, the company manages over 11,300 retail chains and some e-commerce sites under 58 placards in over 28 nations globally. The emphasis of Walmart is today on developing an all-in-one experience for its consumers while spending from mobile handsets or within the stores. The company has employed approximately around 2.2 million employees that are considered as associates.
The foundation of the company’s business policy involves daily low prices. The company retails a wide range of products and its emphasis continuously remains on retailing products at the lowest prices in the market. The key target market, millennial consumers, are engrossed by three components. They are accessibility, lowest rates, and quality of products. The products range from grocery and entertainment amongst others. Walmart offers a large collection of products. The strategy aims at attracting consumers with lower rates and keep them engrossed with price cuts and convenience in shopping. The low prices policy is certainly great in regards to retention of consumers. This because consumers in America are to some extent gripped with low rates. According to Timilsina (2015), consumers will not go shopping if not for integration of discounted prices. The millennial consumers are even more hooked to lower prices and spending handiness. This means that they opt to shop on their own terms and do not shop unless there is a discounted price ranging from 50% to 70%. They would like to shop on their own terms and would not shop unless there is a big discount like 50 or 70%.
The most effective business approach for the company’s long term success should be consumer oriented. Research studies prove that customer orientation is a precursor to the overall productivity of the general productivity of a company. In addition, it is a significant aspect in universal competition. Laying emphasis on the consumer guarantees that the company can accomplish a justifiable approach of maintaining a leading role in the market. Walmart has integrated a customer orientated mechanism that is widely described solely concentrating on the customers. One of the key principles attributed to the approach is a concentrating on the needs of the consumer.
The company has integrated various mechanisms such as offering convenience and this has been achieved through an increase in stores. It has also ensured that ecommerce websites are readily available for online purchasing. The other vital mechanism of the approach is guaranteeing product quality for both branded and unbranded merchandise. This ensure that the client’s value for money is met. When the needs are attained, it leads to growing loyalty amongst the consumers and sustainable accomplishments by the company.
Corporate Level Strategies
According to Qian (2018), a corporate level strategy is a form of mechanism undertaken by a company aiming at gaining a competitive advantage through choosing and managing a business mix contending in numerous product markets. Over the years, Walmart utilizes a combination of numerous strategies that includes overall cost leadership and differentiation to guarantee long-standing achievements of the company. The aspect of differentiation is incorporated by guaranteeing that the company has an array of products that are made available as compared to the competitors. To guarantee that the company meets the goal of lowering costs, the firm has developed a robust network of distribution and heavily invested in transportation, logistics and information systems. This makes it very effective and utilize economies of scale.
The company’s effective general cost leadership and differentiation policy results in great access obstacles for rivals. This also makes it difficult for auxiliary products to gain access to the market. The company is known for its bargaining authority with the contractors, guaranteeing the best prices for the products. The company altered its competitive aspects from retail to transport logistics their competitive challenge from retailing to transportation logistics and communication businesses to play to their strong points. Walmart Inc. has evaded the downsides of the general cost leadership and differentiation approach by proper calculation of future incomes and expenditures.
Due to the technological advances such as the Internet, the company has grown its business operations by reducing the cost of production. With the clients’ augmented product using the online platforms, Walmart is in favourable position of providing quality products from a broad spectrum and is more receptive to the needs of the consumers. This is considered to be coherent the company’s corporate strategy of price leadership and differentiation. The online platforms offer a custom-made experience for the clients as accounts can be created, tracking of orders, and acquire information on the current trends and new products. Clients also have the chance of offering feedback on the quality of services.
Walmart Inc. has numerous general price leadership value-chain undertakings. The company contains less layers of management as compared to the rivals, therefore reducing the overhead expenses. The company has integrated an efficient internal logistics mechanism by utilizing the just-in time inventory (Lin, 2019). This has led to a reduction in the expenditure from outbound logistics through the creation of improved fuel efficiency in their vans, having extra pallets on a cargo, and reducing empty distances steered by their cargo vehicles. The company also decreases the expenditure through acquisition in bulk as it reduces the numerous runs and discounts are offered. Walmart has numerous distinction value-chain undertakings. According to Lin (2019), the company is known to integrate speed during the transfer of merchandize from their storage zones. Their technological advancements offer a distinctive method of ordering for products. While Walmart does not provide numerous sales, their policy of “daily low valuing” has proved to be effective. Their motto “reserve money, live better” perfectly characterizes the firm’s images.
Walmart’s Competitive Environment
According to Timilsina (2015), strategic competitiveness is considered as formulating and implementing a value generating policy. Walmart Inc.’s competitive environment is quite unique. Even though the company’s main rivalry is from overall product vendors, warehouse clubs and supermarket retailers similarly offer competitive pressure. The concession selling industry is considerable in magnitude and constantly experience development and changes. The topmost rivals contest both nation-wide and globally. There is widespread rivalry on valuing, location, size of the store, design and surroundings, products mix, technology, and general impression. The market is certainly typified by economies of scale. Topmost vendors vertically assimilate numerous functions. For instance procuring, production, marketing, and transport. These large scale roles present the top rivals with a momentous cost gain over minor rivalry.
Over-all merchandise vending, Wal-Mart’s key rivals include Target and Kmart. Trade supermarkets such as Bath and Beyond, also provide selling rivalry. According to Timilsina (2015), recent surveys indicate most of the participants were in favour of Walmart rather than other stores such as Target and Kmart. The survey participants stated that the firm offered lower rates, improved assortment and also better quality. The consumers’ desires are a significant economic aspect in every competitive environment. The types of attributes such as quality and prices encourage consumers to select a certain retailing company over another is significant in the competitive environment.
In the storehouse section, Wal-Mart’s Sam’s Club harshly competes with Costco. Costco has less storage houses but superior trades and incomes. Costco clients also go shopping at Costco regularly as compared to Sam’s Club clienteles and, averagely, expend on every visit. Costco’s supremacy might be the outcome of better invention. Costco is known to provide luxurious items. Moreover, the corporation was the first to retail fresh produce such as meat along with gasoline. This is significant since invention is a fundamental aspect in evaluating competitors in particular market.
Wal-Mart is also considered to be in direct rivalry with huge hypermarket venders. The production capability within the grocery market is fairly populated and Wal-Mart presents an earnest danger to numerous supermarket vendors, both huge and minor. Several companies such as Kroger, Albertson’s, and Safeway are altogether discovering that it is challenging to contend with Walmart Inc.’s lower costs. Since the market is rather congested, most of the established vendors are aiming to distinguish themselves to gain a significant portion of the market share.
Walmart’s Market Cycle
The most noteworthy rivals are reliant on the industry situation and the market cycle. The market cycle is distributed into various segments. They include slow cycle markets and fast cycle markets. The most momentous rival may be dissimilar from the rapid cycle market if the market is slow cycle. There are several aims of strategic associations established in the slow cycle market. According to Timilsina (2015), slow cycle markets are described as markets whereby rivals lack the capability to reproduce competitive edge of a renowned firm that may last for a long duration. The imitation may be deemed to be a costly affair. Rivals are known to last longer slow cycle market segments. On the other hand, a fast cycle market involves rivals that replicate a company’s abilities and do not last longer in the sequence.
Walmart is considered to be in a slow cycle market since they have the ability of sustaining their rivals. Not every company found in a slow cycle market has the ability permanently sustaining the approach. Most companies are likely to experience a decline in value and need to devise ways of targeting the right consumers. This, nonetheless, might be the situation in fast cycle markets. This is due to the company being compelled to continually adjust its policy to preserve its competitive edge. Walmart has the ability to maintain its market share due to the numerous stores that attract various clients.
Walmart is a renowned corporation that has other numerous firms under its label. The company has also instituted different firms within its retail segment, therefore having numerous rivals in the industry. Nonetheless, Walmart has the ability to sustain the business due to the quality of services offered to the consumers. Walmart will continuously maintain its status as one of the leading retail companies universally.
Conclusion
Wal-Mart has succeeded in maintaining its status as the leading retailer in the industry. This is largely attributed to well deliberated business and corporate level approaches. The firm has devised ways of presenting products of high quality at discounted prices but still maintaining a healthy profit margin. This is due to the use of different mechanisms as differentiation and cost leadership to appeal to new clients.
References
Lin, R. (2019). The Importance of Successful Inventory Management to Enterprises-A Case Study of Wal-Mart.
Qian, J. (2018). Charitable Giving, Corporate Image Building, and Market Expansion: The Case of Walmart (Doctoral dissertation).
Timilsina, B. (2015). Competitively Distinct Operations as a Key for Superior and Sustainable Business Performance: An Example from Walmart. Management (18544223), 10(3).