Wal-Mart Case Analysis
Wal-Mart Stores, Inc., 2009 – A Case Analysis
MBA 712-01 - Strategic Management
Introduction
Wal-Mart Stores ended its 2009 fiscal year with nearly $266 billion in sales at its Wal-Mart Stores, $47 billion at Sam’s Club, and $99 billion in its international locations. This represented an increase a substantial portion of market share that presented a challenge for competitors. Yet Wal-Mart at the same time was challenged to move forward with intense competition from its rivals, Target and Costco. Target was a slightly higher end option for Wal-Mart stores, and Costco was a Sam’s Club competitor that rivaled the bulk retail center with its club membership and low wholesale pricing. In addition, there were challenges with its size creating issues with speed and response, as well as becoming more vulnerable from competitors because of its larger visibility in the market. Attacks by labor unions targeting Wal-Mart’s employees created challenges, corporate responsibility and environmental issues were coming to the forefront, and there were also issues with how to successfully expand into international markets.
Wal-Mart’s core competencies, which included its EDLP or Every Day Low Pricing structure, it’s cutthroat purchasing and vendor/supplier tactics, sophisticated supply chain and distribution network, relationships with major branded products as well as its own line of Great Value products, and its high emphasis on outstanding customer service were all unique drivers in Wal-Mart’s strategic positioning that would ensure its success if it followed its previous strategies while integrating some new ones to adapt to economic and consumer-mindset changes occurring in recent history.
The above graph shows how Wal-Mart has the market share in comparison to other large retailers over the last decade and going into 2009 (2).
Wal-Mart’s Operations
Wal-Mart set itself apart from competitors by its distinct vendor relationship- dealing directly with manufacturers,
MBA 712-01 - Strategic Management
Introduction
Wal-Mart Stores ended its 2009 fiscal year with nearly $266 billion in sales at its Wal-Mart Stores, $47 billion at Sam’s Club, and $99 billion in its international locations. This represented an increase a substantial portion of market share that presented a challenge for competitors. Yet Wal-Mart at the same time was challenged to move forward with intense competition from its rivals, Target and Costco. Target was a slightly higher end option for Wal-Mart stores, and Costco was a Sam’s Club competitor that rivaled the bulk retail center with its club membership and low wholesale pricing. In addition, there were challenges with its size creating issues with speed and response, as well as becoming more vulnerable from competitors because of its larger visibility in the market. Attacks by labor unions targeting Wal-Mart’s employees created challenges, corporate responsibility and environmental issues were coming to the forefront, and there were also issues with how to successfully expand into international markets.
Wal-Mart’s core competencies, which included its EDLP or Every Day Low Pricing structure, it’s cutthroat purchasing and vendor/supplier tactics, sophisticated supply chain and distribution network, relationships with major branded products as well as its own line of Great Value products, and its high emphasis on outstanding customer service were all unique drivers in Wal-Mart’s strategic positioning that would ensure its success if it followed its previous strategies while integrating some new ones to adapt to economic and consumer-mindset changes occurring in recent history.
The above graph shows how Wal-Mart has the market share in comparison to other large retailers over the last decade and going into 2009 (2).
Wal-Mart’s Operations
Wal-Mart set itself apart from competitors by its distinct vendor relationship- dealing directly with manufacturers,
References: 1. Grant, R. M. Contemporary Strategy Analysis: Text and Cases, 7th edition, John Wiley & Sons, 2010, pp. 551-571. 2. Graph from “Will Wal-Mart Growth Plans Move the Stock?” November 3, 2009, (http://seekingalpha.com/article/170779-will-wal-mart-growth-plans-move-the-stock). 3. “Looking Back at the Wal-Mart RFID Time Line” February 23, 2009 (http://scdigest.com/assets/newsviews/09-02-23-1.pdf).