1.

What, historically has been Wal mart’s key source of competitive Advantage in
discount Retailing?
The key source of competitive Advantage in discount retailing are:
 Brand name: It has established itself as a retail brand that favour the customers.
It is known as the best brand for its obsession for lower prices. This brand image
has benefited a lot and not just created popularity but also helped it overcome
small and big jolts.
 Pricing strategy: the key strength of the brand upon which its entire business
model rest. It has not just help it built a great brand image that is popularly for
its low-cost model but also a large customer base.
 Customer service: It is known for its focus on customer experience. It also
framed attractive return policy for the sake of customer convenience.
 Large scale operation and bargaining power: The benefit of large-scale
operation is economic of scale. It allows Walmart to buy in bulk and sell at
lower prices.
 Financial strength: Walmart spend more on R&D as well as allowing more
funds for marketing and advertisement.

2.How sustainable is Walmart’s competitive advantage?

Walmart uses technology to reduce the operation cost and lead to increase in its profit margin.
This further helped the company to sustain its competitive because the expansion has increased
its customer base.
Walmart’s Human resource has essential for the sustained competitive advantage. The
performance if individual directly affect the company performance. The qualified employees
which company has given it competitive edge over competitors.

Physical resources in the form of asset which Walmart has is another factor. They have vehicles
for transportation, which help in improving the efficiency of supply chain. In supply chain
Walmart uses the strategy which lower production cost, improved in store variety, and
competitive pricing for the customers.

3.Will Sam’s whole club prove to be as big a success as its discount stores?
Yes, Sam’s whole club prove to be as big success as its discount stores. Clubs limited the gross
margin to 9% - 10%, implying price 20% below those of conventional discounters and
supermarkets. Warehouse club sales had reached $4.4 Billion. They were expected to exceed
$20 billion in early 1990s. It turned inventory about 12 times a year and held market share
slightly under 20%.

4. How do you explain Walmart’s extraordinary performance in discount Retailing?

Walmart’s extraordinary performance in discounting retail due to the following reasons:
Every day low cost: It control the expenses so that the saving can be passed to its customers.
Every day low price: The products are priced for very low prices on a daily basis so that
Walmart customers build trust on them and they will a notion that their price won’t change
often like other just for promotional activities.

Walmart Pick up: This option helps a customer to place his or her order online and get free
pickup from any of its nearest store.
Great customer experience through instant online deliveries to reward for the customers.
Money back guarantee the products do not meet the required standard of the customer.

Excellent warehouse keeping, distribution system and good use of technology to improve the
services make it more successful.

5. Carry out the VRIO analysis of Wal- mart and draw its core competencies.

Competency Value Rare Imitable Substitute Conclusion

Integrated technology of YES YES YES YES Sustainable
supply chain competitive advantage
Generate large sales YES NO NO YES Competitive parity
volume
Superior logistic system YES YES YES YES Sustainable competitive
advantage.
Strong culture YES YES YES YES Sustainable competitive
advantage.
Human resource YES YES YES NO Temporary competitive
advantage.

Core Competences of Wal mart are:

Low cost operation
Distribution
Logistic system
Culture
Integrated technology of supply chain.
Environment awareness.
6. Carry out a 5 forces analysis of Retailing Industry and explain how did Wal mart
establish its strategic position.

The Walmart positioning strategy was low price and satisfied customer service which include
a wide assortment of good quality merchandise, friendly service, convenient hours and pleasant
shopping experience. Walmart is offering both value and low price to customers.