Question

Describe the core competencies/advantages of Wal-Mart and its ability to transfer them to different international locations. Which of Walmart’s core competencies is helping Walmart to become a globally competitive company and which competencies are more US-environment based and so are less helpful in global contexts? Consider all the different competencies including logistics, retail location costs, HR, etc...

(there is no minimun of words but try to explain everything in details and answer everything that is been asked! )

Answer 1

Core competencies of Wal-Mart:

Some of the distinctive capabilities of Wal-Mart are listed below:

• Architecture: the internal architecture of Wal-Mart is such that they manage their associates, their employees are hardworking, efficient & process oriented & their relationship with their suppliers is in such a way that they go extra mile of establishing their offices close to Wal-Mart’s headquarters which helps in cheap & convenient transportation of goods. Also their culture is such that it can lead to innovation & learning:

Wal-Mart has in place a system that helps to achieve their goal of lower prices. This Information Technology system includes computers, networking, and internet that cuts inventories and waste and helps with speedy delivery. This system also helps Wal-Mart to keep in constant contact with suppliers by transferring the data that suppliers need so they know what Wal-Mart needs. Wal-Mart also works with suppliers to improve their production and squeezes the best prices out of its supplier. The video referred to Wal-Mart as the customer’s agent. All of this focus Wal-Mart puts on suppliers reduces costs and lowers prices. Wal-Mart’s technological/logistical leadership remains unmatched by competitors

• Reputation: the company has such a reputation that has placed it in the number one position in United States & all over the world for its standards & keeping its promise establishing itself as the lowest price retailer in the world for its pricing philosophy as “every day low price”.
• Innovation: Wal-Mart is considered to be very innovative as it uses its VSAT for its warehousing & cross docking techniques in which even its competitors are not up to date. It also keeps changing its store formats & also adapts itself to the local markets.
• Low cost operations: Wal-Mart mainly focused on low overhead & small towns when there was economic recession in 1970’s. Today Wal-Mart can generate large sales volume which can help the company to gain profits with low profit margin that can give them an advantage when compared with its competitors.
• Distribution: it operates over an unrivaled global network of around 150 distribution centers. As a result of this vehicles need not travel so long in order to make their deliveries which can reduce their lead times to serve its stores & for suppliers to ship their merchandise to the distribution centers. This means less stock needs to be stored & lower stock means high inventory turnover rate & this is another competency which can’t be found in another competitors.

I feel the above factors equally contribute to Wal-Mart in becoming a global competitor & there don’t seem to be any factors that are only US based. May be there can be any political & economic laws locally that would contribute only to US factors or to the core competencies of Wal-Mart & doesn’t act globally.