WAL-MART

THE WORLD BIGGEST RETAILER

SUSTAINING CORE COMPETENCE AND COMPETITIVE ADVANTAGE

Presented by
Polawat and Mostafa
K COMPANY REVENUES (in $ millions)

Exxon Mobile 444,851.0

Wal-Mart Stores 405,607.0

Chevron 263,159.0

ConocoPhillips 230,764.0

General Electric 183,204.0

2009 Global Fortune

RATAIL INDUSTRY STURCTURE
 CORE COMPETENCE & COMPETITIVE ADVANTAGE
PRIMARY ACTIVITIES SUPPORT ACTIVITIES

Organizational Culture:
Low cost business model, Sundown rule, 10 feet
attitude CORE
COMPETENCE
Information Technology System -
Satellite, Radio Frequency Identification Scanned -Capabilities to
(RFID), Electronic Data Interchange (EDI) reduce cost
across the
value chain
-
MARKETING -Organization
PROCUREMENT AND SALES
DISTRIBUTION Culture
-Reduce inventory cost -A few
w cost promotion
-Efficient distribution (Cross-Docking)
osed Relationship with suppliers


 OUTSOURCING FOR LOWER COST:



• Wal-Mart pressures manufacturers to

outsourcing jobs


• More than 70% of Wal-Mart merchandise has a

Chinese component


• Wal-Mart is the global leader of outsourcing




• Wal-Mart is facing stiffer competition everywhere. In
discounting retailing area, many of its competitors—
Kmart Sears and JC penny—are being revitalized by
new management. In warehouse clubs, its Sam’s clubs
ran a poor second to Costco.
•
• Wal-Mart attracts criticism of environmentalists, anti-
globalization activists, women’s and children’s rights
advocates, small business representatives and a
growing number of legislators of varying political hues.
•
• How can Wal-Mart sustain its competitive advantage
and core competence in the US and the world market?
 +
Profit + + +
+ +
Marketing Power Marketing Marketing Investment in
Power over Power over Outsourcing
Revenue over suppliers
labor customers
process
+ improvement

+
Sales -
- - -
- Unit Cost +
+ Investment in
+
Capital Low Price CSR Issue Green
Technology
Productivity
+
Brand Image -
Resource
Depreciation +
+
Consumption -
BRAND IMAGE
 WAL-MART GOING GREEN
To build a more
environmentally and
socially responsible
global supply chain
The Operation's
Strategic Objectives

-To be supplied by 100% renewable energy

-To create zero waste Operation
-To sell products that sustain resources and Strategy
The Operation's
environment Competitive Role and
Operations Position
Strategy

Input Output
Resources Products and Customers
Design Operation Improvement Services
Manageme
nt

Planning and
COntrol
 Operation Planning and Controlling
• 1. Increase fuel efficiency in Wal-Mart’s truck fleet by 25 percent over three years and
 doubling it within 10 years


• 2. Reduce greenhouse gases by 20 percent in 7 years

•
• 3. Reduce energy use at stores by 30 percent in 7 years
•
• 4. Cut solid waste from U.S. stores and Sam’s Clubs by 25 percent in three years.
•
• 5. Buying diesel-electric and refrigerated trucks with a power unit that could keep cargo cold
without the engine running, saving nearly $75 million in fuel costs and eliminating an
estimated 400,000 tons of CO2 pollution in one year alone
•
• 6. Making a five-year verbal commitment to buy only organically grown cotton from farmers,
and to buy alternate crops those farmers need to grow between cotton harvests.
•
• 7. Promising by 2011 to only carry seafood certified wild by the Marine Stewardship
Council, a group dedicated to preventing the depletion of ocean life from overfishing.
•
• 8. Buying (and selling) 12 weeks' worth of Restrictions on Hazardous Substances (RoHS)
-compliant computers from Toshiba
 IN THE WORLD MARKET
• Wal-Mart’s low price strategy was not successful
in German and Korean Markets because of :
 -Differences in consumption behavior
 -High cost to invest in IT system
 -Differences in Organization Culture


• Wal-Mart should use focused-market strategy in

the world market.



CONCLUSION
• In the order to sustain the competitive advantage
in US Market, Wal-Mart is now focusing on
creating positive brand image and reputation
through Green Supply Chain Management.
•
• Also, As the US Retail Market is saturated, Wal-
Mart should enter more international market
by using focused-strategy.