1. Key success factors for supermarket industry
* The store format * Technology * Human Capital
* The first real success was the lower prices * Discounts * Variety of products (food, clothes, IT, home) * Walmart has its own brand for specific products called “Great Value” * Very high purchasing power * Highly efficient supply chain * Very large scale of operation * Highest level of customer base * Unmatched pricing
2. 5 forces analysis
* Family owned supermarkets * Regional supermarkets (Publix, Sedanos, Acme, HCV, Albertsons) * Specialized markets (Such as home depot, best buy, circuit city)
3.2 Competitors USA * Target (was the closest competitor) * Costco * Kmart (Not from the case)
Competitors only in some areas: * Home depot * Best buy * Circuit city
3.3 Potential Entries
EUROPE * UK: they managed ASDA stores and they did a joint venture ASDA-Walmart, 7 GEORGE and depots * Germany: They joined forces with the Aldi group and acquired Wertkauf
AMERICA * Mexico: joint venture with Cifra * Argentina: They opened Sam´s Club * Canada: They bought Woolco Stores * Brasil: Their competitor was Carrefour and they bought Bompreco
ASIA * South Korea: acquisition of Makro Stores * Seul: Acquired Kangman Store * China: formed a partnership with with Thai-based Charoen Pokphand Group, but it eventually fell apart, and Walmart opened Sam´s Club * Japan: They invested in Seiyu and eventually they took over.
3.4 Buyers * Consumers have low to moderate power in changing the price. * The consumers are now more sophisticated and mature. As said by Carrefour, they want it now and they want it with the best service and the best quality. Consumers enjoy increasing choice of products and increased price competition, and they demand better and wider choices. They also exert pressure on manufacturers and retailers to give more relevant product information. * For Technology and home they have more power than for the food and clothes in Walmart.
3.5 Suppliers Because of the diverse product range that is distributed by retailers there are many different suppliers. Suppliers include both domestic and international manufacturers and as the products are more or less standardized in nature, retailers and wholesalers have low switching costs, the powers of supplier are moderate to low.
3. Strategic groups
STRENGHT * IT System * Brand recognition * Bargain power with suppliers * Lower Price guarantee * They have adapted to every market (Adaptation) * Product Value for money (Great value brand) * Good and diverse location
WEAKNESS * Their Human Capital image * Flexibility: As they have so many different lines, they are not as flexible as specialized stores. * Too many temporary employees
OPPORTUNITIES * New markets * Possible specialization * Strategic alliances with other companies * New locations * Improve local communities perception
THREATS * Other companies doing joint ventures, such as Kmart and Sears * Family and regional supermarkets * Bad corporate Image
5. In your opinion, which is the base of the competitive advantage of WalMart? Is it sustainable? * Low cost * High volume * Customer Satisfaction * Distribution capabilities * Successful Supply Chain Management
In the short run is sustainable, they are the leader worldwide and they keep growing, even in crisis, they keep growing. If the keep developing their competitive advantages and adapt to the customer needs, they will probably keep on being the market leaders.
Nonetheless, they will have to adapt to the technological advance in order to be sustainable in the long run. As for the past, they have been always leaders in IT, so they have to keep going that way.
If the open specialized stores, they will probably be sustainable in the long run.
6. Which resources and competencies are key to sustain its competitive advantage?
* Sustain supplier partner relationships. * Maintain their brand reputation * Maintain their ability to keep costs and prices low * Keep good customer service * Keep a good value pricing product relationship * Quickly and effectively respond to changes in demand and competition * Maintain technological superiority