Wal-Mart’s Strategy for Long-term Competitive Advantage
Today, firms are experiencing great success because of the impact that logistic managers all over the world have in the global market. There are components in business that makes logistic management a success at Walmart; its success can be attributed to its business strategy and supply chain management strategy.
Walmart at a Glance
The history of Walmart can be traced back to a man named Sam Walton who opened his first Walmart store in Rogers, Arkansas in 1962 (Bergdahl, 2004). According to Bergdahl (2004), from 1962 to today, Walmart employs 2.2 million associates and promotes 160,000 people to jobs of greater responsibility each year. Walmart is a global business with more than 11,000 stores in 27 countries. At the end of January 2013, Walmart reported increased net sales by 5% to $466.1 billion and provided a $13 billion return to its shareholders. Walmart prides itself on environmental sustainability, humanitarian efforts to fight hunger in America, and women’s economic empowerment.
Wal-Mart employs the use of advanced strategies like the site-to-store strategy, which enables the company to distinguish itself from online retailers. It uses this strategy to have goods shipped free of charge to local Wal-Mart stores. According to Ghiani, Musmanno, & Laporte (2013), close to 30 percent of customers who buy from Wal-Mart stores also buys products from its online stores saving more money in a month than with shopping with competitors. That number is expected to rise by 2% over the next year as customers buy more frequently online than in brick and mortar establishments (Ghiani et al., 2013). Wal-Mart utilizes the site-to-store strategy to ensure maximum utilization of its 158 distribution centers. It connects its logistics system with over 50 transport offices, 53,000 trailers and over 8000 drivers. Recently, the company established a distribution center to manage foods imports using other multi-faced strategies to remain the leader in stores and distribution management.
Walmart’s Generic Strategies for Business
Walmart has three generic strategies it uses to strategize its business. The first is called its focus strategy. The focus strategy can be defined as products and services offered to a particular market segment, buyer group, or geographical market. According to businessdictionary.com, “A focus strategy is usually employed where the company knows its segment and has products to competitively satisfy its needs” (Business Dictionary, 2014, para. 2). The second strategy is called the differentiation strategy. The differentiation strategy can be defined as a strategy that takes a product or service that is perceived to be unique and offer it at a lower price. The differentiation strategy is “Usually employed where a firm has clear competitive advantages, and can sustain an expensive advertising campaign” (Business Dictionary, 2014, para. 1). Finally, there is the strategy of overall...