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Wal-Mart Mini Case Analysis
Wal-Marts focus on low price and operational productivity has been a unique competitive advantage that no other retailer competitors could imitate. In the long run, however, Wal-Marts efficiency can hardly be a sustainable source of competitive advantage because other competing retailers will quickly emulate and learn from Wal-Marts best practices. Boosting its growth rate through international expansion and acquisitions may not be an expedient strategy either as it is evident that Wal-Mart is starting to lose its focus internationally. I think whether Wal-Mart can continue its remarkable growth rate in the future will depend very much on how it positions itself differently in the “supposedly” maturing domestic market and on how it can help Sams Club to make a significant turnaround.
Even though the market is said to be mature, what Wal-Mart needs to do is to look outside of its own traditional market segment. Wal-Mart has been going after only the lower-income customers over the years while having partly ignored the well-to-do shoppers who possess great buying power, which is crucial especially in todays high oil price situation. In order for Wal-Mart to attract more higher-end customers, it should offer more “trendy” or “signature” products on its shelves at a price lower than its competitors which can be achieved through its superb logistic efficiency and its clout over manufacturers. This will enable Wal-Mart to expand its market coverage while also retaining the traditional “low price” business model and culture. Under this strategy, Wal-Mart should also be able to compete with upscale retailers like Target.
One current trend that can be a complement to the above strategy is the popularity of organic food. Many “famous brand” manufacturers are now in the business of producing organic food to meet this trend. Some major retailers such as Wholefoods have also directly profited from the organic food boom. Needless to say, Wal-Mart can capture this market opportunity by offering organic products at its “supercenters”. Not only will this strategic move help attract urban and upscale consumers to shop more at Wal-Mart at a lower price,