Strategic Choice and Evaluation: A case of Wal-Mart

Strategic Choice and Evaluation: A case of Wal-Mart
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Strategic Choice and Evaluation: A case of Wal-Mart
Introduction
The current business strategy of Wal-Mart involves having low-cost and volume-based operations and product ranges that enhance company reliability and customer satisfaction. All the same, for an organization to realize growth, it must consider establishment of competitive advantage, especially in regards to its target market. For instance, Wal-Mart focuses on reaching mature and commonplace persons in a developed setting. This explains why the company chose to settle on its low-cost approach, among several possible strategies of reaching the market.
Organizations (especially those in the retail sector) can also consider achieving ‘Organic growth’ by enhancing operations of the company using internally generated resources instead of resorting to debt finance or mergers and acquisitions. This alternative also facilitates the establishment of a customer-oriented workforce and a much more established organizational culture.
Evaluation of Wal-Mart’s Strategies.
The Business Dictionary’ (2014) describes ‘value disciplines’ model as having generic elements of operational excellence, product leadership and customer intimacy. In this case, Wal-Mart operates under the discipline of Customer intimacy for the most part. This does not mean that the company lags behind in terms of operational excellence and product leadership considering it is of the ‘Leader’ status.
The company vigorously and consistently places emphasis on achieving the consumers’ preference as its primary value principle or rather ‘Buying power’ in reference to the five forces described by Michael Porter (Hitt, et al. 2012).
Additionally, the company employs generic strategy mechanisms that facilitate its competitive advantage in addition to creating barriers to new market entrants who pose as a threat. This is further propagated by the company’s low cost strategy of marketing that facilitates the company’s success. Still, Wal-Mart maintains desirable relationships with its suppliers, a factor that has greatly contributed to its expansion via proliferation of the company’s outlets. The company’s capability of modifying its merchandising response to specific and individual markets is important in its overall performance. This allows the management at store level to identify products that are most preferred by customers and to price them in accordance with the prevailing market conditions with ease. Other than that, Wal-Mart bears streamlined operations owing to heavy investments on information systems ahead of its competitors. This reliance on up to date technology has enabled the company to be very efficient in the functions of ‘Vendor Management’. All the same, the chief generic strategy in play in the business of Wal-Mart remains ‘Cost Leadership’, as was formed by the business model created by Walton- the founder. This strategy ensures the company maintains very low operational costs to facilitate realization of pleasing profit margins while still enabling the company to maintain its huge market share as it continues to attract more and more customers (Copeland & Labuski, 2013).
This grand strategy is also termed as EDLP (Every Day Low Price); it counters the use of coupon clipping as well as having to wait for discount promotions. This strategy aids Wal-Mart a lot- as a retailer in saving resources of time and expenditures incurred because of price markdowns. Over time, the company has reported increase in comparative sales within its target markets. It has realized movement of sheer volumes of products to the extent that its suppliers, partners and distributors remain highly cooperative. Nevertheless, the company employs strategies to bala...