Wal-Mart has grown into the world largest retailer with sales over $401 billion and is the world's 18th largest public corporation. However it is currently a big target for competitors in the current global economic climate and has complex strategy issues. It faces threats from growing too big in too many market areas, which makes it vulnerable to losing control, weakened cooperation among stores and regions, and competition in multiple fronts. Its profitability in the international market is also very inconsistent.
In order to sustain its leading position domestically, and to increase its profitability internationally we propose that:
• It does nothing to defer itself from a position as a cost and price leader in the market in order to maintain its image and adhere to its philosophy.
• Although it’s financial strength, management skills, and operation efficiency allows it to enter many overseas markets, it should be selective in choosing the destinations.
• It should continue to focus on its target market of low income, bargain based households and not defer into too many unsustainable markets.
Indeed we propose that by continuously focusing on its strengths and finding ways to increase efficiency within its operations, Wal-Mart will stay ahead of the price competition from rivals, and deter potential competitors from entering the markets.
There are key characteristics of the industry environment within which Wal-Mart operates. Although Wal-Mart’s primary competition comes from general merchandise retailers, hard discounting stores and supermarket retailers also present competitive pressure. The discount retail industry is substantial in size and is constantly experiencing growth and change. The top competitors compete both nationally and internationally. There is extensive competition on pricing, location, store size, layout and environment, technology and innovation, and overall image. The market is definitely characterized by economies of scale....