Case of Walmart-Crafting and Executing Strategy

1. In an era of higher gasoline prices (for Noth American comsumers) can Wal-Mart Stores Inc. survive and prosper since it is a “destination” department store?

Usually people go to Wal-Mart shopping by driving a car there. It causes that Wal-Mart is required to consider more factors to make the decision where the new store are located. One of those important factors is parking. New store needs large vacant lot for parking area, but the building and maintenance cost is very high for some areas like downtown. So Wal-Mart’s stores are always located at somewhere relatively close to communities but far from the downtown area. Gasoline prices will directly influence customers shopping by car because those prices are supposed to be counted in total shopping cost. If gasoline prices are too high for a certain period, then the frequency of customers shopping in Wal-Mart would significantly decrease because it brings high cost for customers when shopping by car. Under this scenario, people tend to go to alternatives like other convenience stores which provide similar goods as Wal-Mart does and are close to their homes by reducing the cost. Wal-Mart’s value is to provide lower cost products for customers, but if the gasoline price goes up, it would force average shopping cost to increase for customers. Therefore it would bring negative impact on interests of Wal-Mart because the company would fail to satisfy customers shopping experience and lose its low-cost strategic advantage in competition.

2. If the days, for large North American department stores are over, can Wal-Mart Stores Inc. survive against smaller competition and boutique stores?

It’s necessary to do SWOT analysis for Wal-Mart at first.

Strength: a) cost advantage; b) low price & customer-oriented; c) strong supply chain;

Weakness: a) store decoration; b) relatively less flexible than focused competitors

Opportunity: a) build its own brand; b) have good reputation and company image; c) new locations and...