Wal Mart Stores
Case Study „Wal-Mart
Stores, Inc.“
MLA1 International Business and Management
Introduction
Wal-Mart is one of the world’s largest companies and is operating in discount retailing. Its first stores were opened in 1962 in small towns because Wal-Mart’s founder Sam Walton who died in 1992 had the idea that these towns were large enough to support one discount retailer, but not two. The main reason for
Wal-Mart’s leading position in the market has always been based on its ability to offer products at low prices. In the U.S., Wal-Mart has more than 4,000 thousands stores in its different formats: discount stores, supercenters, neighborhood markets and “Sam’s Club”. Since the early 1990’s, Wal-Mart had limited success with entering foreign markets in South America, Europe and Asia. Now, Wal-Mart is trying to enter the African market, a $2.4 billion merger with Massmart Holdings should help. In 2011,
Wal-Mart generated net sales of nearly $419 billion and an operating income of $25.5 billion.
(http://walmartstores.com/sites/annualreport/2011/financials.aspx)
1. Please analyze the sources of Wal-Mart’s competitive advantage in discount retailing.
On the market of discount retailing, Wal-Mart has a competitive advantage over its rivals because of its profitability which is greater than the average profitability of all companies competing in the market of discount retailing. Wal-Mart’s competitive advantage is based on distinctive competencies. These firmspecific strengths enable Wal-Mart “to differentiate its products from those offered by rivals and achieve substantially lower costs than its rivals.” (Hill/Jones 2010, P. 74) These distinctive competencies result from two complementary sources: resources and capabilities. (Appendix 1)
Wal-Mart’s most important (tangible) resource is its high number of stores. Moreover, Wal-Mart own different store formats. In the U.S., there are 629 discount stores offering a pleasant and convenient shopping experience. Furthermore,
Stores, Inc.“
MLA1 International Business and Management
Introduction
Wal-Mart is one of the world’s largest companies and is operating in discount retailing. Its first stores were opened in 1962 in small towns because Wal-Mart’s founder Sam Walton who died in 1992 had the idea that these towns were large enough to support one discount retailer, but not two. The main reason for
Wal-Mart’s leading position in the market has always been based on its ability to offer products at low prices. In the U.S., Wal-Mart has more than 4,000 thousands stores in its different formats: discount stores, supercenters, neighborhood markets and “Sam’s Club”. Since the early 1990’s, Wal-Mart had limited success with entering foreign markets in South America, Europe and Asia. Now, Wal-Mart is trying to enter the African market, a $2.4 billion merger with Massmart Holdings should help. In 2011,
Wal-Mart generated net sales of nearly $419 billion and an operating income of $25.5 billion.
(http://walmartstores.com/sites/annualreport/2011/financials.aspx)
1. Please analyze the sources of Wal-Mart’s competitive advantage in discount retailing.
On the market of discount retailing, Wal-Mart has a competitive advantage over its rivals because of its profitability which is greater than the average profitability of all companies competing in the market of discount retailing. Wal-Mart’s competitive advantage is based on distinctive competencies. These firmspecific strengths enable Wal-Mart “to differentiate its products from those offered by rivals and achieve substantially lower costs than its rivals.” (Hill/Jones 2010, P. 74) These distinctive competencies result from two complementary sources: resources and capabilities. (Appendix 1)
Wal-Mart’s most important (tangible) resource is its high number of stores. Moreover, Wal-Mart own different store formats. In the U.S., there are 629 discount stores offering a pleasant and convenient shopping experience. Furthermore,