Wal-Mart Business Environment



Wal-Mart Business Environment

Introduction

The first Wal-Mart was opened in 1962 as a result of Sam Walton's dream to give people high value, low prices and a warm welcome. Till today there are more than 1.2 million associates of Wal-Mart worldwide. It has more than 3,000 stores and offices across the U.S and more than 1,000 stores internationally. In 2000 Walmart.com came into being which has brought Sam Walton's dream of bringing Wal-Mart to the Internet. It is because of the great prices and appealing selection that customers return to Wal-Mart again and again. It is also because of the people at Wal-Mart who greet people with prompt friendly service. In this paper we analysed the Wal-Mart Strategic Management.

Wal-Mart Strategic Management

The nation's largest retailer has implemented an Internet EDI system that enables its smallest suppliers to work with automated ordering systems. Wal-Mart Stores Inc. last week deployed Harbinger Corp.'s TrustedLink Express to make EDI services available to companies unable or unwilling to bear the expense of a proprietary EDI connection.

Wal-Mart helped ensure a change in the character of downtown, he said. Laura Richardson who is a retail analyst with Pacific Crest Securities is all for a competitive change involving smaller retailers. It s a big store. It carries a broad selection. There s no depth, Richardson said. That s where the local shops can compete. They need to figure out what Wal-Mart doesn t do, be flexible and do it. The expansion of Wal-Mart throughout the U.S. is a positive change for towns, cities and the economy. It brings prosperity, healthy competition and it is part of the inevitable evolution that sweeps through the country on a daily basis. Wal-Mart should be greeted with open arms and with a positive outlook for the future. (Wilson, 1999, pp 121-190)

Porter's 5 Forces of Competition

Rivalry among competing firms

The main driver for competition is centered on price-competition. Special promotions that enhance buyer appeal, such as the 'buy American' theme also contribute to the rivalry. Wal-Mart marketing strategies seem to always come ahead of competitors, and even if they lag behind, the customer loyalty will retain their customers. A competency that also causes rivalry. Although it seems that competitors have also started to renovate ideas to match Wal-Mart.

With these factors, rivalry can be considered as strong. The industry's limited competitors and high profitability. The demands for the products are also growing slowly. Because of its necessity nature, the demand for grocery items grows rather slowly. Also, because of the temptation to cut prices to be used as a competitive weapon, rivalry can be considered strong.

Entry of new Competitors

A key source of advantage for Wal-Mart is their resources and management innovative skills. This is difficult to match technical know-how especially for a new comer. The company's identity keeps suppliers and merchandisers to pursue Wal-Mart's name as a carrier. Customer loyalty, low-price and capital requirements also minimize the threat of potential entrants. Wal-Mart should focus on these strengths so that potential entry of ...