Walmart Strategies

Contents

Introduction3

Business Level Strategies3

Corporate Level Strategy5

Walmart versus Target7

Slow versus Fast cycle markets8

Conclusion8

References10

Business and Corporate level Strategies

Introduction

Walmart is recognized as the biggest retail corporation in the world. The first Walmart store was founded by Mr. Sam Walton in the year 1962 (Walmart, 2013). Since then the company has developed and entered in diverse forms retail stores. It has also gone global by directly entering in twenty seven countries and has suppliers and other contracts in more than hundred countries around the globe. The continuous success and improvement of Walmart has made it the best company of the world in the Forbes list for the year 2013. Also, the CEO of Walmart Michael Duke was recognized as the tenth most powerful person in the world (Forbes, 2013). These rankings clearly highlight the fact that the company is successful in its operations.

Business Level Strategies

Business level strategy is defined as 'Integrated and coordinated set of commitments and actions the firm uses to gain a competitive advantage by exploiting core competencies in specific product markets/industry' (Hitt et al, 2011). Companies develop business level strategy in order to gain clarity about where they want to see themselves in the market and what actions will help them in achieving that position.

Companies in a particular market first analyze the level of competition in the market, the external and internal environment for the company and the way in which it can achieve the competitive advantage. The two possible ways of achieving competitive advantage are through cost and uniqueness (Porter, 2008). Another important consideration to aim at competitive advantage is defining the scope of competition. Companies either target 'broad' or 'narrow' market based on its ability and the opportunity foreseen.

The target market and basis for consumer value divides possible business strategies into five categories which are differentiation, cost leadership, integration, focused differentiation and focused cost leadership as shown in Appendix A.

The concept of cost leadership means that a company focuses on minimizing its costs and charging less for a product than rivals. Differentiation is an idea in which a company develops or sells something unique or it may sell the same thing in a distinctive manner. Focused cost leadership and focused differentiation is also the same thing but the company's scope in narrow market in these cases. Finally, integration of cost leadership/differentiation is an infusion of both strategies for different products of a company.

The most common strategy used in the retail business is the cost leadership. All the major rivals in the industry try to provide products at a lower price. The economic recession has furthered increased the demand from customers to have products at cheaper rates. According to a survey of retail stores, the biggest concern of retail giants is the pricing pressure with which they have to deal in every day situation (KPMG, 2012).

The element of differentiation is less in retail market because most products are for normal use and more or less standardized in nature. Differentiation can be done by introducing new product or by ...