Walmart Global Leader - Supporting Cost Leadership Strategy Essay Example
Wal-Mart – A global Retail Leader
Introduction
“Save money. Live better.” It is this simple vision of Sam Walton that Wal-Mart has adhered to from the very beginning. And it is that very concept that has propelled Wal-Mart into becoming one of the largest corporation in the world. Wal-Mart has become a prime example of a cost leadership corporation that has revolutionized the way consumer businesses interact and conduct with each other in today’s retail environment, in order to give their customer the best value; always. The purpose of this essay is to discuss how Wal-mart was able to achieve such a feat through their cost leadership strategies to bring more value to its customers, how it contributes to their stakeholders, as well as how it positively impacts the society overall.
Definition of Cost Leadership Paragraph
Since most of the discussion is on Wal-Mart and its successful implementation of cost leadership strategies, it is imperative to define the cost leadership strategy to give a clearer understanding of the discussion put forward. Cost leadership strategy has been generically defined as a firm being the lowest cost producer, to sell at or below industry prices; By doing so firms are able to gain a larger market share, allowing them to achieve higher overall profits through high volumes of lower marginal profits – That is exactly what Wal-Mart has done. Unlike Wal-Marts competitors who have focused on earning marginal profits by the dollar, Wal-Mart focused on marginal profits by the cents, which allowed them to attract large numbers of customers thus achieve a significant chunk of the market share. It has been stated that “Every seven days more than 130 million Americans shop at Wal-Mart—equivalent to 40 percent of the country. Each year, 93 percent of American households shop at least once at Wal-Mart.” Which is a clear proof that Wal-Mart –by focusing on earning marginal profits by the cents has attracted enormous crowds, in similar context it
Introduction
“Save money. Live better.” It is this simple vision of Sam Walton that Wal-Mart has adhered to from the very beginning. And it is that very concept that has propelled Wal-Mart into becoming one of the largest corporation in the world. Wal-Mart has become a prime example of a cost leadership corporation that has revolutionized the way consumer businesses interact and conduct with each other in today’s retail environment, in order to give their customer the best value; always. The purpose of this essay is to discuss how Wal-mart was able to achieve such a feat through their cost leadership strategies to bring more value to its customers, how it contributes to their stakeholders, as well as how it positively impacts the society overall.
Definition of Cost Leadership Paragraph
Since most of the discussion is on Wal-Mart and its successful implementation of cost leadership strategies, it is imperative to define the cost leadership strategy to give a clearer understanding of the discussion put forward. Cost leadership strategy has been generically defined as a firm being the lowest cost producer, to sell at or below industry prices; By doing so firms are able to gain a larger market share, allowing them to achieve higher overall profits through high volumes of lower marginal profits – That is exactly what Wal-Mart has done. Unlike Wal-Marts competitors who have focused on earning marginal profits by the dollar, Wal-Mart focused on marginal profits by the cents, which allowed them to attract large numbers of customers thus achieve a significant chunk of the market share. It has been stated that “Every seven days more than 130 million Americans shop at Wal-Mart—equivalent to 40 percent of the country. Each year, 93 percent of American households shop at least once at Wal-Mart.” Which is a clear proof that Wal-Mart –by focusing on earning marginal profits by the cents has attracted enormous crowds, in similar context it