Essay Sample on Walmart's Competitive Advantage

Published: 2023-02-16
Essay Sample on Walmart's Competitive Advantage
Type of paper:  Case study
Categories:  Sales Walmart Leadership style Customer service
Pages: 3
Wordcount: 709 words
6 min read

Walmart is not only the world's largest retailer; it is an economic force in the business world. Though Walmart has many competitive advantages, its primary strategy is offering huge discounts to its customers. Walmart manages to provide massive discounts to its customers by first cutting operational costs and secondly, by focusing on scale versus volume. Walmart ensures that the production costs are at a bare minimum by renting spaces in low-cost buildings, connecting directly with the manufacturers, and paying employees low wages. The second technique that has enabled Walmart to provide more for less is the strategy regarding the volume of products sold. The Walmart leadership confirms that though the products sell at a lower price compared to what is offered by other competitors, the difference in profits is covered by the number of sales. Walmart sells at a lower price but sells more which makes them have high returns than those retail shops that sell at a higher price but a smaller volume.

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The Reasons it is Difficult for Target to Compete with Walmart

The concern for profits has been a significant issue for retailers such as Target and Kmart when it comes to competing with Walmart. For shops like Target, lowering prices would mean that the company makes less profit because of the operation costs and the volume of goods sold. If one is a manager at Target, the first thing they should do to beat the competition from Walmart is to offer quality products to high-end customers. Walmart specifically offers low priced goods, an aspect that exhibits the issue of quality. Though many people want to buy things at a low cost, there is a group of people who are ready and willing to pay for quality. Target can maximize on this group and offer the best products. Further, the other focus should be on customer experience. Walmart has big stores which can compromise on the service consumers get. Target can maximize on interacting with customers one on one and listening to their feedback.

Walmart on the Web

Walmart's leadership admits that there is a need to put more finances into the company's e-commerce. The retail shop lost billions of market share because of its inability to sell its products on the web. Amazon has so far set itself apart by garnering 244 million customers in the year 2014, which makes it difficult for companies such as Walmart to catch up. Nevertheless, the following recommendations can help Walmart sell more products on the web to its already considerable number of customers who visit the stores physically.

Walmart should, first, focus on capitalizing in the most significant asset they have, which is the customers who visit the physical Walmart shops. It is easy for Walmart because they are not starting from scratch; the team have to convince the already existing customers to buy from the web, rather than having to walk to the shop physically. Walmart can drive customer interest in e-commerce by offering loyalty points to those customers who are frequent buyers on the website. The loyalty points will make faithful physical customers remain true to online buying.

The second way that Walmart can increase sales on the web is by offering discounts depending on the number of purchases made to its online customers. The promise to provide convenient and better services would not sway buyers to purchase goods online from Walmart because Amazon already offers quality delivery services to its customers. The technique that would work for Walmart is extending their discounts to online shoppers so that one can save more when they buy online than when they visit Walmart stores. Thus, before proceeding to the stores, one would think about saving time, fuel and the amount of money spent at the store and instead opt to purchase the goods online.

The last recommendation is that Walmart should ensure that the services offered when one visits the shop are similar to those provided when one orders for a product online. The products posted online should be identical to the one the person would get if they went to the store. Also, the delivery time should be convenient and reliable so that customers continue shopping online so that Walmart builds and maintains a considerable number of online shoppers.

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