MARKETING CASE STUDY

Marketing Case study

Marketing Case study

1. Use the Generic Strategy model to discuss the strategy that has led to success at Wal-mart. How has the company maintained the strategy despite its growth and a changing external environment? Could other strategies have worked?

Ans. Porter introduced a model of generic strategies that has influenced much of the current thinking in strategy formulation. Although Porter did not coin the terms, he was the first to discuss the importance of choosing and focusing on one of the three alternatives: 1.Cost leadership, 2.Differentiation, and 3.Focus. Any attempt to combine or reconcile strategies would result in firms becoming “stuck in the middle”, a poor strategic choice due to the existence of an inevitable trade-off. The dearth of recent research on the topic suggests that the initial debate has faded since the beginning of the 1990s, even though some discussions still take place in strategy Wal-Mart is an example that pointed out among other companies that pointed out as having successfully reconciled both strategies. In order to investigate the question of an inevitable trade-off in general and the current state of art of the research topic in particular, a thorough literature review has been conducted. It is accompanied by a cross-check examination of contemporary practitioners' position in the matter, that is, whether current practitioners principally believe that strategies are mutually exclusive, or, reconcilable. Even though the lack of a concise definition of the concept “mixed strategy” or “combination strategy” (or “combined strategy”) greatly hinders research on the topic, both theory and practice support the existence of a trade-off.

Porter's Generic Strategies (source: Porter, 1985, p.12)

It may be helpful to think of strategy frameworks as having two components: internal and external analysis. The external analysis builds on an economics perspective of industry structure, and how a firm can make the most of competing in that structure. It emphasizes where a company should compete, and what's important when it does compete there. Porter's 5 Forces and Value Chain concepts comprise the main externally-based framework. The external view helps inform strategic investments and decisions. Internal analysis, like core competence for example, is less based on industry structure and more in specific business operations and decisions. It emphasizes how a company should compete. The internal view is more appropriate for strategic organization and goal setting for the firm.

Porter's focus on industry structure is a powerful means of analyzing competitive advantage in itself, but it has been criticized for being too static in an increasingly fast changing world. The internal analysis emphasizes building competencies, resources, and decision-making into a firm such that it continues to thrive in a changing environment. Though some frameworks rely more on one type of analysis than another, both are important. However, neither framework in itself is sufficient to set the strategy of a firm. The internal and external views mostly frame and inform the problem. The actual firm strategy will have to take into account the particular challenges facing a company, and would address issues of financing, ...