Walmart: Marketing, Competitive Advantage, and Advertising
Walmart is among the biggest companies in the United States, as it is valued at over $250 billion and owns more than five thousand retail stores spread over ten countries globally (Alcácer et al., 2013). Walmart built its dominion and purchasing prowess through the elimination of go-betweens as well as building direct relationships with their suppliers. In addition, the company also makes purchases bulk products from their suppliers at lower costs and sells the same items at significantly discounted prices to their consumers to promote sales. In recent times, Walmart has ventured into online marketing strategies, online classified services, vehicle maintenance services, planning vacations, and financial services.
Walmart’s various branches, specifically their supercenter, offer a variety of services: such includes vision centers, tire maintenance, photo centers, banks, hair salons, and employment agencies (Alcácer et al., 2013). This supercenter allowed Walmart to offer a broad range of products, over a hundred thousand products, with thirty thousand going to grocery products. Atop Walmart’s supercenters, Sam’s Club also plays a considerable contribution to Walmart’s success.
In this case study, on crucial review, understanding Walmart’s competitive advantages is vital. Their viable advantages are fairly justifiable owing to their competent overall management procedures. Though Walmart’s competitive rewards vary, its key competitive edge initiates from its ability in pursuing goods, in-store and distributive record. Since this is a very classy technological process and policy, monitoring every single one of their records has effectively allowed them to uphold inventory correctly and preserve their low charges, which is a buyer-winning aspect for them (Alcácer et al., 2013).
Unlike other retailers, who are their competitors, Walmart rarely invests enormous funds on advertisements of their products and services. Walmart’s leading marketing source is through word of mouth, from consumer to another potential consumer, or on printed leaflets. Due to Walmart’s location being inundated, the retailer manages to advertise itself through a single market, which results in low advertising costs. It is, however, essential to note that Walmart sustains their advantages by meeting customers’ needs with various options, such as discounts on products over their many stores, supercenters, and the famous Sam’s Club, where most of Walmart’s consumers’ needs and demands are met satisfactorily (Alcácer et al., 2013). The various strategies employed by Walmart have proven to sustain their distinct competitive advantages, which have earned Walmart profits in billions of dollars.
Native physical characteristics of Walmart play a significant role in the retailer’s overall performance. The retailer reacts differently to the distinct marketing strategies, all dependent on their consumers’ culture. For example, Walmart’s main strategy is EDLP, which means, ‘Everyday Low Prices, used by Walmart across all their branches globally, and has worked perfectly well in every country’s market they have entered (Alcácer et al., 2019). This is, however, different in their Korean and Japanese markets, since their consumers in those markets associate low prices with low quality, and consumers do not care about product costs as much compared to the shopping experience.
In the United States, leadership strategies and customer service work well, although some consumers might feel uncomfortable, in markets in countries such as Germany since consumers expect different services. The retailer has also struggled in adapting to other cultural differences, such as consumers’ needs. Walmart has dramatically managed to succeed without significant problems in countries such as the United States, Mexico, and Canada due to the similarities in cultures of the three countries, but has greatly struggled in countries like Brazil and China. Due to their diverse and distinct cultures.
Alcácer, Juan, Abhishek Agrawal, and Harshit Vaish. “Walmart around the World.” Harvard Business School Case 714-431, 2013.