Walmart Leadership Strategy

1. Introduction and History of Walmart

Founded by Sam Walton, Walmart was being built based on an unshakable foundation of equipping the “Lowest Prices Anywhere, Anytime.”, and its first store being set up at Rogers, Ark. Walmart aimed towards achieving higher sales in volumes by selling at a lower prices than its competitors by reducing their profit margin. Taking up the inspiration from other discount departmental stores, Walmart started its second store in Harrison and grew up to 24 stores across the states of Arkansas in 1967.

By 1985, Walmart grew up to 882 stores and with the advancement in IT, it made its process more efficient by setting up offices to track inventory, sales and send instant communication to their stores. In 1988,

Walmart provides a wide variety of products and services with the similar or higher quality at a price which is cheaper than the price their competitors can provide. Walmart focuses on finding ways to lower their costs by rethinking constantly on how to complete their primary and support activities by reducing costs still further by maintaining competitive levels of differentiation. Their supply chain management is an important factor helping them in implementing the cost leadership strategy, adding to their success. In conclusion, Walmart 's overall successful strategy of cost leadership/differentiation leads in creating high entry barriers for competitors.

Corporate Strategy: The main reason behind the success of Walmart is that the company believes and concentrates on the strategy of single business, i.e. more than 95% of its revenue comes from their grocery business. The strategy of single business has been contributing greatly from over 30 years to the success of Walmart. Walmart has never believed in diversification for sustenance of its growth and also its advantages at competitive level which Walmart used as a market entry strategy in the international arena,

With the External Factor Evaluation Score of 3.07 and Internal Factor evaluation score of 3.12, which is being analyzed in the later part of the report, Walmart has always been through ‘Grow and Build’ Strategy. 3. Walmart: External Analysis

In order to analyze the environment Wal-Mart operates in, we have made a PESTEL analysis. Performance of the company is directly affected by the Political, Economic, Social and Technological factors hence it is necessary have a study upon these factors.

Moreover, there are other forces which make the market more or less attractive with respect to the profitability of the industry. Hence there we will use Porter’s five forces. Three of those are threats of external substitute products/services, the established rivals and new entrants; and the remaining are internal threats of the bargaining power of customers and that of suppliers.

Macro analysis of Walmart