How Did Sam Walton Build Wal-Mart’s Sustainable Competitive Advantage? (2024)

FAQs

How sustainable is Walmart's competitive advantage? ›

How sustainable is their competitive advantage? Wal-Mart's competitive advantage in discount retailing is very sustainable due to the three reasons. The first reason is the durability. The customers of Wal-Mart value the value of the dollar and being able to buy brand names at low discount prices.

Walmart's success can be attributed to having their own supply chain to streamline fulfillment and cut down on costs. It also provides them with more control over their logistics network. In this article, we take a closer look at the Walmart supply chain and why it continues to be so successful decades later.

Walmart has continued to leverage technology, such as machine learning, cloud powered checkout and pickup capabilities to offer more convenience and enhance the overall shopping experience for customers. To learn more about Walmart's recent innovations, visit corporate.walmart.com.

Walmart reinforced its competitive advantage by locating its stores around its regional distribution centers. Most of the stores were located in such a way that it took just a day trip from its warehouse, whereas Kmart's stores were located far from each other and also from their distribution centers.

The idea here is that if a firm is to maintain sustainable competitive advantage, it must control a set of exploitable resources that have four critical characteristics. These resources must be (1) valuable, (2) rare, (3) imperfectly imitable (tough to imitate), and (4) nonsubstitutable.

Economies of scale and supplier pressure: Wal-Mart uses its volume to reduce its costs of purchase from vendors, as much as possible. Wal-Mart also leverage it economies to provide relationship with its suppliers that could would out volume discount that Wal–Mart would pass on to its customers.

Comparing the results to its competitors, Walmart Inc reported Total Revenue increase in the 3 quarter 2022 by 8.74 % year on year. The sales growth was above Walmart Inc 's competitors average revenue growth of 7.43 %, recorded in the same quarter.

As of 2021, we've diverted 78% of global waste from landfills and incineration, and donated 696 million pounds of food in the U.S. alone. We've conserved over 1.8 million acres of land since 2005 in partnership with Acres for America. Private-brand packaging by 2025.

Every Day Low Price (EDLP) is the cornerstone of our strategy, and our price focus has never been stronger. Today's customer seeks the convenience of one-stop shopping that we offer.

What made Walmart successful globally? ›

Walmart acquired businesses that already captured a dominant share of the local market, and most of them were unprofitable. This strategy helped Walmart reduce entry barriers and utilize currently available resources, including suppliers, customer base, brand recognition, and local capitalizing.

Strength in Both In-Store and Online Grocery Sales

Consumers that shop for online groceries at Walmart are drawn to low prices, one-stop convenience, brand selection, and curbside service. However, competitors may be able to exploit Walmart's weaknesses in the future as online grocery shopping becomes more commonplace.

Building a Competitive Advantage

Michael Porter, the famous Harvard Business School professor, identified three strategies for establishing a competitive advantage: Cost Leadership, Differentiation, and Focus (which includes both Cost Focus and Differentiation Focus)[1].

A well-known example of a company with a sustainable competitive advantage is Walmart. Walmart maintains a sustainable competitive advantage in part because its strategies are specific to its organization and these strategies are known for creating a gap between Walmart's performance and that of its competitors.

We're making progress: As of 2021, we've diverted 78% of global waste from landfills and incineration, and donated 696 million pounds of food in the U.S. alone. We've conserved over 1.8 million acres of land since 2005 in partnership with Acres for America. Private-brand packaging by 2025.

Walmart's goal is to make as light a footprint on the planet as we can, and we take this responsibility very seriously. We have three goals: to create zero waste, operate with 100% renewable energy and sell products that sustain our resources and the environment.

We set aspirational goals to achieve 100% renewable energy, zero waste and a more sustainable supply chain for people and the planet. This commitment to sustainability came after Hurricane Katrina ravaged the Gulf Coast, when we saw firsthand how climate change could impact communities.