Wall Mart
Wal-Mart Stores Inc.,
May 2002
Robert M. Grant
Wal-Mart Stores
1. TO WHAT EXTENT IS WAL-MART’S PERFORMANCE ATTRIBUTABLE TO INDUSTRY ATTRACTIVENESS AND TO WHAT EXTENT TO COMPETITIVE ADVANTAGE?
A company has a competitive advantage over its rivals when its profitability is greater than the average profitability of all companies in its industry.
It has a sustained competitive advantage when it is able to maintain above-average profitability over a number of years. Wal-Mart is a good example to understand this.
First of all we have to know how the industry is’s attractive. We can know with the five forces porter.
Analyzing five forces porter we find out if this is an industry attractive or not.
• The threat of new competitors is not very high. This makes the industry is closed and businesses one point of tranquility.
• The rivalry among competitors is very high and this will cause the continuing price war among supermarkets.
• The bargaining power of suppliers is an important point in this sector. Depends on the suppliers throughout the rest of the chain.
• Buyers do not have much bargaining power so this will make the industry more attractive.
• There is a strong threat of substitutes in this industry.
The center of Wal-Mart 's efforts to gain market share through a wide range of categories is still his attitude towards the management of the supply chain. Long recognized as a key competitive advantage, Wal-Mart operates an unrivaled global network of 146 distribution centers. Included in this total are 103 domestic distribution centers that service to approximately 2,800 discount stores, Supercenters, Neighborhood Markets and 525 Sam 's Clubs, and 43 other establishments that 1,300 international units of service Wal-Mart located in nine countries.
On the other hand it is important to say that in marketing and strategic management, competitive advantage is an advantage that a company has over
May 2002
Robert M. Grant
Wal-Mart Stores
1. TO WHAT EXTENT IS WAL-MART’S PERFORMANCE ATTRIBUTABLE TO INDUSTRY ATTRACTIVENESS AND TO WHAT EXTENT TO COMPETITIVE ADVANTAGE?
A company has a competitive advantage over its rivals when its profitability is greater than the average profitability of all companies in its industry.
It has a sustained competitive advantage when it is able to maintain above-average profitability over a number of years. Wal-Mart is a good example to understand this.
First of all we have to know how the industry is’s attractive. We can know with the five forces porter.
Analyzing five forces porter we find out if this is an industry attractive or not.
• The threat of new competitors is not very high. This makes the industry is closed and businesses one point of tranquility.
• The rivalry among competitors is very high and this will cause the continuing price war among supermarkets.
• The bargaining power of suppliers is an important point in this sector. Depends on the suppliers throughout the rest of the chain.
• Buyers do not have much bargaining power so this will make the industry more attractive.
• There is a strong threat of substitutes in this industry.
The center of Wal-Mart 's efforts to gain market share through a wide range of categories is still his attitude towards the management of the supply chain. Long recognized as a key competitive advantage, Wal-Mart operates an unrivaled global network of 146 distribution centers. Included in this total are 103 domestic distribution centers that service to approximately 2,800 discount stores, Supercenters, Neighborhood Markets and 525 Sam 's Clubs, and 43 other establishments that 1,300 international units of service Wal-Mart located in nine countries.
On the other hand it is important to say that in marketing and strategic management, competitive advantage is an advantage that a company has over