What Is Walmart's Competitive Advantage

Walmart is one of the biggest company in the United States. The company is worth nearly $260 billion, as well as having to managed more than 5,000 stores in 10 countries around the world and employed approximately 1.5 million workers. Unlike others, Walmart developed its purchasing power by eliminating the middlemen and building direct relationship with the suppliers. In addition, the company purchases the products in bulk directly from suppliers at a lower cost and then sell items in stores at a discounted price. Recently, Walmart had ventured into e-commerce, online classified services, auto and tire maintenance, vacation planning, financial services, because of this wide variety of services offered to its consumers, the retail gained

The supercenter offers vision centers, Tire maintenance, photo centers, banks, hair salons and even employment agencies. Having such a center allowed Walmart to offer over 100,000 products, 30,000 of which includes grocery products at once. On top of their supercenters, Sam’s Club also plays a big contribution to their success. Since opening, Walmart successfully increased the locations of Sam’s, accounting almost 12% of their total revenues

Upon understanding the case study, Walmart’s competitive advantages are relatively sustainable. This is mainly due to their efficient overall operation. While Walmart’s competitive advantage varies, their primary competitive edge comes from their capability in tracking supplies, distribution inventory and in-store inventory. This sophisticated technological operation and strategy of monitoring every single inventory has successfully enabled them to maintain appropriate inventory and thus, helped them maintaining its low prices.
Unlike their competitors, Walmart does not invest tremendous amount of funds on advertising. Their primary source of marketing comes from word-of-mouth or a printed leaflet. Because Walmart’s location and stores tend to be saturated, the business is able to advertise itself through a single market, resulting less advertising costs. More importantly, Walmart sustains their competitive advantages because of its store locations, operational costs, and distribution costs being below industry average. Moreover, Walmart sustains advantages by meeting customers’ needs with several distinct retail options; these include discounted products and stores, supercenters, Sam’s clubs where most of customers’ needs and demands are satisfied. Their smart strategies mentioned the above have proven to sustain their competitive advantages earned more than $250 billion in overall