Case 1-3 Walmart Stores Inc. case study seeks to answer the question of whether Walmart has a competitive advantage.
Jay B. Barney; William S. Hesterly
England: Pearson Hall (Strategic Management and Competitive Advantage: Concepts and Cases)
2014
Case questions answered:
- Does Walmart Stores Inc. have a competitive advantage?
- Temporary CA?
- Sustainable CA?
- What changes could be made to develop CA and/or create a more sustainable CA?
- Are there resources Walmart or its competitor’s control that are key to CA?
- Financial, Physical, Human, and Organizational?
- Temporary CA?
- Sustainable CA (VRIO)?
- How has Walmart’s history shaped its capabilities/resource bundles (Financial, Physical, Human, and Organizational)
- How does Walmart’s internal environment drive its strategic and tactical decisions at the organizational and divisional levels (as highlighted in the case)?
- Which of Walmart’s capabilities/resources are most important for effective international expansion?
- What adjustments should Walmart make in altering/acquiring capabilities/resources for particular foreign markets (dependent on the differing strategies/tactics it should deploy in these markets)?
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Case 1-3 Walmart Stores Inc. Case Answers
Does Walmart Stores Inc. have a competitive advantage?
Walmart Stores Inc. has a competitive advantage. As of 2013, Walmart held a dominant position in the retail market (PC 1-26) with billions in sales in the United States.
It is a profitable venture both locally and internationally. It has had remarkable success even in areas where other retailers specialize, such as clothes, food, toys, and health and beauty products.
It is only closely rivaled by Kmart, another discount giant, and uses cost leadership, differentiation, and focus on having a competitive advantage over the competition.
Temporary CA?
International operations may have considerably boosted Walmart’s growth in sales. However, it is not without challenges, as other retailers have also gone global with some success and failure in some global markets.
Walmart Stores Inc. is not able to uniquely compete against foreign firms in their locality, especially where there may be entry restrictions, trade barriers, and an uncertain political environment.
Walmart has also embraced the use of Internet technology in the retail business. Online shoppers’ option was, however, reactionary and merely copied what other retailers were doing without necessarily adding a unique feature for their customers.
Sustainable CA?
Its consistent use of improved technology and innovativeness has ensured that Walmart Stores Inc. remains ahead of the curve in competition with other retailers.
Innovation will also improve the quality of their products and create new niches for their products by personalizing services and making them accessible to everyone.
What changes could be made to develop CA and create a more sustainable CA?
Investment in research and development of innovative products and improvement in customer service will greatly ensure a sustainable competitive advantage. They may also establish brand loyalty by coming up with a credit policy or other benefits besides price reduction.
Are there resources Walmart or its competitor’s control that are key to CA?
Yaohan, a competitor of Walmart Stores Inc., had…
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