Introduction
Wal-Mart the world's largest retailer in 2006, next to only Exxon Mobil, with an 8.9% retail store market share in the US and a global turnover of $312 billion, is the most famous example of a successful retail strategy. However, Wal-Mart's international operations spread across 14 markets outside US, has been a mixed bag of experiences for the company. Despite Wal-Mart's impressive track record and strength, the question is, "How can it stay ahead?" given the rapidly changing retail landscape, newly emerging markets and aggressive global competitors.
Business Model
Wal-Mart operates under nine different retail formats through primarily three retailing subsidiaries: Wal-Mart Stores Division U.S., Sam's Club, and Wal-Mart International.
As per the Generic Strategies Framework of Michael Porter, Wal-Mart has adopted a strategy somewhere between "Focused Low-Cost" positioning and "Cost Leadership" where-in,
- Market scope? Global operations cater to a diverse customer base. In the US price conscious low and middle income consumers with a focus on smaller towns.
- Source of competitive advantage?consistently low prices with high customer service and stringent cost control measures.
Global Strategic Intent:
- Dominate the retail space across the world
- Cash on the retail boom in emerging economies and capture market share
- Replicate the success achieved in the US markets and become the world's largest retailer
Financial Data For the last 5 years
Year Sales
(in $mn) Revenue Grth (YoY) NI
(in $mn) ROA &n ...