How sustainable is Wal-Martâ€™s competitive advantage in discount retailing in 1990?
Wal-Martâ€™s competitive advantage in discount retailing in 1990 is very sustainable, because they follow the two competition principles â€“ the key to a firmâ€™s success in competition is its competitive advantages; and how sustainable a firmâ€™s success is depends on how sustainable its competitive advantages are.
Competitive Advantages are what customersâ€™ value and what a firm is better than its competitors in. Wal-Martâ€™s customers value the value of the dollar and being able to buy brand names at low discount prices. Sam Waltonâ€™s philosophy was that he believed in the value of the dollar and keeping prices below everybody elseâ€™s. He made providing value part of the culture of Wal-Mart. Competitive advantages can be considered to be price, quality, design, convenience, good brand image and reputation associated with products and services and many other factors. Customers determine what competitive advantages are relevant to them and price, quality, convenience and brand image were what Wal-Mart customers considered to be the competitive advantages of Wal-Mart versus other discount stores.
Competitive advantages come from
In having inventory warehouses close to its stores, Wal-Mart was able to restock its inventory within days instead of having to wait weeks, while at the same time removing its non-selling inventory from the store without having to store it until it was time to ship it out. "Wal-Mart identified its competitive advantages by the functional approach, which is to analyze each functional area of the company and to use benchmarking to assess relative strengths. Wal-Mart was very competitive in terms of prices and it gave its store managers more latitude in setting prices than "centrally priced" chains did. External sources can be classified as technological changes, changing customer demand and changing prices. manufacturers to participate in it and estimated that they had converted or retained over 1. They also benchmarked, by looking closely at their competitors. Under Sam Walton, Wal-Mart was always looking within itself to see how it could improve its services. There were interactions among departments and individuals were ideas and suggestions were shared on how to improve the business, and this included everyone from the bottom to the top of the ladder. Wal-Mart leases about 70 of its stores and owns the other 30. Using information systems they tailored merchandise to individual markets and stores.