This ferociously increases the competition in the market and Wall-Mart competes with all its competitors till it is dominant it the market. Already very early did Wall-Mart realize that logistic was a key factor to its success. By investing very early in state of the art information technology (IT) which tracked every item in every Wall-Mart store, the company was able to shrank inventory-taking lags from several months in the asses to near real time in the asses.
Their core IT competence is the ability to track every item and share this information with their suppliers, Additionally to this feature Wall-Mart possesses its own distribution centers (84 in the LIST only) which operate together with the discount stores on basis of a hub and spores eastern Furthermore did Wall- Mart establish the “cross-docking’ system. This system allows the transfer of merchandise directly from inbound trucks to store-bound trucks oviduct storing goods inside the distribution centers.
With this system and the above mentioned IT systems, Wall-Mart is able to minimize the time its goods are stored inside the striation centers and the goods needed inside its discount stores are nearly delivered just in time. This shows that Wall-Mart has realized very early that technology plays a vital role in the development of a organization and used its technological advantage, especially in the field of logistic to create its competitive advantage in the early days of discount stores.
Thanks to its high IT standards Wall-Mart was and still is able to react in the fastest possible way to external changes, this is by far the companies biggest asset. The key components of Wall-Mart, which offers cheap prices than competitors includes firm infrastructure and no regional offices. Wall-Mart works very efficiently with its employees. This does not always creates in the best possible working environment (see legal cases) but Wall-Mart manages to come up with the right incentives to foster an atmosphere of productivity inside its company.
Manager compensation is e. G. Linked to the profit of the store operated by him. The workforce at Wall-Mart is not unionized and Wall-Mart is trying everything in their power to stop every effort of unionization. Wall-Mart dominates the American retailing industry due to number of factors. The most important factor in this case is its own business model. Because of its competitive advantage that is based in so many organizational capabilities its competitors can’t clearly identify what Wall-Mart does that creates its competitive advantage.
This is called causal ambiguity. This results in uncertain immutability ? any attempt to imitate the strategy of Wall-Mart will have a very uncertain success because the factors that make up the success Of Wall-Mart are not clear. The bottoming is, that Wall-Mart’s competitors are not able to imitate its business model because it is not clear Which factors are generic best practices and which are “contextual”. Complementary with other management practices.
Wall-Mart’s strategic capabilities are its logistic system, modern IT system, very efficient human resources management and the ability that its customers always belief Wall-Mart is offering the lowest price possible. Its competitive advantage on the other hand is that the competition is not able to imitate the way Wall-Mart is doing what it does. This results in the fact that Wall-Mart’s business model is a complex configuration of so many factors that it is nearly impossible to put a finger on a factor that makes the difference and gives Wall- Mart its competitive advantage. Hind the strategy of Wall-Mart is a solid system and has been proven not only in the SIS market but in many different one through Europe and Asia. With the idea of creating a very fast and high tech infrastructure system while offering a waste quantity of goods Wall-Mart has establish a Very solid and sustainable backbone for its retail system. The question which concerns me more is if the general system Of discount-stores has a future in itself. Hind Wall-Mart has and Will fend of its big competition Wary good and also acquire new markets, e. G. China. Where I’m not so certain about is the concept Of discount stores Which are located outside of bigger cities or in smaller cities and offer a waste portfolio of products. In my personal opinion, which I can’t really support with any theory or any kind of data. Is this a store model which Will loose more and more customers in the years to come. This could be the biggest threat to Wall-Mart.
