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Hbs Case: Airborne
Case Report | Creating Sustainable Competitive AdvantageWall Mart | | |

1. Background

2.1. Retail Discount Merchandise (wide variety) National Market B2C

Retail Discount Merchandise (wide variety) National Market B2C

Market

Discount Merchandise (wide variety) National Market B2C

Discount Merchandise (wide variety) National Market B2C

Merchandise (wide variety)
National Market
B2C

Merchandise (wide variety)
National Market
B2C

2.2. Value Chain

2.3. Strategy
Wal*Mart’s strategy was a cost leadership (approximately 15% below competition), this was achieved by discount prices and large volume purchases. Prices are adapted to the local competition and set below all competitors. Their marketing expenses are lower than all others in the market. Their locations focused on rural areas (app. 5.000-25.000 inhabitants), aiming to compete if at all only with local stores, which could be out-priced and outgunned easily.
Their distribution centres were located in the middle of many stores in order to be able to serve many at the same time and build synergy-effects. Their info system was technically innovative, which –combined with the close by distribution centres – lead to a highly flexible distribution process – they could deliver wares even within 24 hours.
In order to diversify their market offerings vertically, they introduced several new market concepts, such as supercentres (offering additional services such as hair salons, florists, bakeries), Sam’s Club (high volume offerings, focused on business customers).

Their Capabilities were a combination of many different features: They excellently improved their value chain by collection as much information as possible about their processes and ultimately optimizing them.

2.4. Special Situation (Porters Five Forces)
Supplier
Wal*Mart developed its suppliers from few brands (which meant little
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