The Competitive Advantage Of Walmart Essay

757 Words Oct 3rd, 2016 4 Pages
Porters
Degree of Rivalry - Stacy In the retail world, there will always be a high level of competitive rivalry, mostly because there are a high number and variety of firms. Retailers, such as, Target, Kmart, Shopko, Carrefour, and Best Buy are all competing in a similar retail environment and must all remain highly competitive to survive. Walmart has the competitive advantage in the retail industry and they must create new strategies and sustainability to remain number one. Keeping prices low and having thin profit margins are Walmart’s secret to being successful in the competitive area. Economies of scale helps Walmart tremendously because they can deliver their goods and services at a lower cost compared to their competitors. Because of how big their stores are and how many locations they have, this gives the company a huge advantage in bargaining prices with suppliers. This also gives them the ability to get their products for cheaper prices compared to a smaller business and have inexpensive distribution. In addition, they have a lot of information regarding what their customers like and dislike so it can spread their best practices across the entire store base. Walmart has a bakery, deli, and dairy area where products are highly perishable. Also, there are high storage costs like the back room area in any retail store. This causes businesses to want to sell their products fast and within their code dates. Or, in the back room, they do not want a ton of…

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