Question

What are the Walmart CORPORATE LEVEL STRATEGIES

Answer 1

Corporate level strategy of Wal-Mart:

Wal-Mart is considered to be in the maturity stage in its lifecycle. The main competition for them is focus on businesses such as grocery, clothing, auto parts etc. there can be no competitors for Wal-Mart offering this many variety of goods at very low prices. Few competitors like Kmart, sears & pamida has already closed.

The company uses a combination strategy of cost leadership & differentiation. Their transportation, logistics & information systems reduce their costs. They also have lower costs by having no frills service & by having economies of scale. Their leadership strategy is considered to be a challenge for the high entry barriers & also for the substitute products to enter the market. They also have good bargaining power with their suppliers & they have changed their competitive challenge from retailing to transportation logistics & communication industries to play strengths.

The Internet has helped Wal-Mart grow their business by lowering transaction costs. Wal-Mart allows customers to order products online which reduce sales force expenses. Customers can have their own account page on the Wal-Mart website to look at prior orders and track current orders. Their Internet site allows you to ask questions and give feedback.  Wal-Mart differentiates its website by providing recommendations of other products to buy when you make a purchase.

They also have many cost leadership activities & have very less management layers that reduce their overhead costs when compared with their competitors. They use JIT system which results in effective inbound logistics. They also reduce their costs by buying in large quantities. They have cut costs from outbound logistics by creating better fuel efficiency in their trucks, getting more pallets on a load, and decreasing empty miles driven by their trucks.

They also have different value chain activities. They follow the concept of flexibility & speed while transferring goods from their warehouses. They have everyday low pricing strategy which is considered to be very successful. Also their technology provides an accurate ordering process.