Wal-Mart Stores, Inc the Challenges of Being Competitive Internationally
Brief Overview of the Case
The goal of the following analysis is to examine Wal-Mart Stores, Inc. and its quest to dominate international markets. Domestically, Wal-Mart has proven success throughout the United States and Canada. Wal-Mart is the pinnacle retail store in America. As of March 2004 Wal-Mart. topped the list of "The 2004 Fortune 500" with revenues of $258,681 M, profits $9,054M (2004 Fortune 500). Internationally; however, they seem to have several challenges that need to be addressed if Wal-Mart wants to be competitive. Even though Wal-Mart has what seems to be a flawless business model, there is still a major problem with making profits in …show more content…
The fourth force in Porter's 5 Forces Model is the threat of substitute products and services. Many of Wal-Mart's competitors have tried to mimic Wal-Mart's unique and successful ways of doing business but failed. Wal-Mart has an excellent customer service that is unique to their chain. Everything possible is done to ensure that shopping at Wal-Mart will be a friendly experience. Sam Walton, founder of Wal-Mart, established 3 Basic Beliefs, "respect for the individual, service to the customer, and strive for excellence" (3 Basic Beliefs, par 1). Wal-Mart takes these 3 Basic Beliefs very seriously.
The fifth force in Porter's 5 Force Model is intensity of rivalry among competitors in an industry. There is no intensity of rivalry among Wal-Mart and its competitors (Sears, Kmart, and Kmart) in the retail industry because Wal-Mart excels in this sector. No competitor can beat Wal-Mart's "Low Prices Ever Day Philosophy." Wal-Mart deliberately puts fewer advertisements into circulation compared to their competitors in order to provide their low price guarantee. Other major competitors typically run 50 to 100 advertised circulars per year. Wal-Mart produces only 12-13 major annual circulars (Wal-Mart Stores, par 2).
Based on the Industry Analysis described above, Wal-Mart has proven to be the top retailer in the retailing industry domestically. Wal-Mart has tried to