Walmart Strategy

5. What are the biggest threats to WalMart’s continued success? Will WalMart’s business model be superseded by another retailing concept? Can WalMart’s advantages be duplicated in markets outside the US? (How successful has WalMart been in transferring its business model to new international markets?) What recommendations ?

a. Expanding the existing formats to other countries is intuitively appealing. A low cost volume-based strategy offering superior customer satisfaction seems appealing anywhere we can identify a sizeable middle class (or aspiring middle class) and decent population growth. Though when reviewing the competitive advantages, one notices that Wal-Mart might prefer a mature and developed retail market to realize its low-cost advantage on the one hand, but an underdeveloped, emerging slowly growing retail market to have time to grow corporate culture perspective.

i. Advanced data mining / customer insight

ii. EDLP

1. Despite the fact that Wal-Mart is the inventor, we see different retailers in different countries adopting an EDLP strategy. We see little problem in copying this part of the strategy.

iii. Customer oriented workforce

1. Organic growth is the preferred option to build a similar customer oriented workforce. Though this may not be trivial if Wal-Mart needs to acquire volume fast.

iv. Distribution capability

1. The distribution network has to be build from scratch in a new country. This limits the optimal choice of a target country:

a. In order to get the competitive cost advantage, volume is needed. This means that acquisition is a preferred tool from a cost perspective.

b. A decent infrastructure is needed so all goods can be transported efficiently

c. The country is preferably large so economies of scale can be attained. That means similar assortments, and therefore similar consumer tastes, across large regions so from a distribution point of view, a large developed retail market is the preferred choice.

v. Partnership...