Sample Paper on Strategic Management and Strategic Competitiveness

Strategic Management and Strategic Competitiveness


            Wal-Mart is the world’s chief public corporation operating in the retail industry. The company is based in Bentonville, Arkansas, and was instituted in 1962 by a renowned businessman and entrepreneur called Sam Walton. In the United States, it is the leading grocery retailer and operates in all 50 states in U.S. 10 years after the company’s establishment; it was first publicly traded on New York Stock Exchange in 1972 (Books LCC, 2013). The corporation operates not only in United States but also in different other countries like United Kingdom, India, and Japan using different names. Back at home, it is the leading retailer in a number of fields including profitability, revenue generation, and private employer. According to Books LCC (2013), the company has close to 12000 retail stores in over 25 countries and 2.2 million employees working in various stores across the world. Globally, it is considered as the most valuable firm not only in the retail industry but also in the overall economic composition. Since its inception, it has had a lot of impact on the American economy ranging from revenue generation to creation of a wide array of job opportunities to American citizens, thereby helping to solve one of the major macroeconomic problems not only in the American economy but also in the global economy. As far as the governance is concerned, the company has endeavored over the ages, to cultivate a culture of strategic management where the top management is tasked to ensure a successful formulation and implementation of value-creating strategies to sustain its strategic competitiveness. This paper endeavors to evaluate Wal-Mart’s strategic management and strategic competitiveness that has over the years ensured its success to make it the world’s leading corporation in almost all.

Effects of Globalization and Technology Changes to the Company

As far as the retail industry is concerned, globalization is not a new issue. Wal-Mart gives a perfect definition of globalization of the retail industry, whereby its growth and expansion strategies are triggered by the process of global integration. In particular, globalization has created many opportunities, which has consequently influenced the company’s growth to cover over 25 countries where business is flourishing day in day out. For the past few decades, globalization has become the norm in international business because of its significant effects on the business environment and the global economy. Because of globalization, there has been augmented stiff competition among retail companies in relation to the target market, cost, and price of goods and services. According to Hitt, Ireland, & Hoskisson (2012), globalization has lead to increased threats of substitutes where a number of retail stores have increased leading to increased customer choice, thereby affecting the sales revenue of companies and consequently their profitability.

The growth of substitutes has made it easier for customers to switch from one retailer to the other by comparing the prices of goods and services offered among the many retailers in the industry. This therefore, affects Wal-Mart’s sales revenue making it to fight to the tooth for survival. Many of its strategic management decisions aim at reducing the cost of production in a bid to reduce its prices to retain the old and attract new customers. Some of its strategic management plans include growth and expansion of its operations aimed at global reach in order to explore the global market and command a significantly large market for its products. In efforts to attract more sales for its products, the company ensures free shipping of nearly all of its products to any customer who makes orders worth $ 50 or more (Books LCC, 2013). This has significantly attracted a wide array of customers who are assured of free delivery of their purchases.

On the other hand, technology changes have had both direct and indirect impact on the corporation in terms of processes and general performance. As depicted by the Books LCC (2013), Wal-Mart has been able to increase its sales revenue through online retail services, which is a conspicuous effect of changes in technology. Online retail retailing has enabled the company to reach a wide array of customers worldwide without necessarily having a physical representation. Customers are able to enjoy online shopping by viewing and selecting a range of products online. Besides, advertising has been made reliably cheaper and faster while customers’ information are stored and easily retrieved through advanced software management systems. Videoconferencing has also enhanced quick decision-making, as communication has been made faster and confidential through advanced technologies (Hitt, Ireland, & Hoskisson, 2012).

Industrial Organization approach and Resource-based Approach

Industrial organization model provides means for obtaining a competitive advantage in a highly competitive business environment. As explicated by Royer (2013), this approach opines that for a company to attain a competitive advantage, it should focus on industrial factors that affect its profitability rather than limiting its focus to internal factors. In a bid gain a competitive advantage, Wal-Mart could rely on the analysis of factors that affect it not only from within but also factors that affect the retail industry as a whole to contain these forces and be able to earn above-average returns. For instance, the company could seek to become a low-cost producer of its products, differentiation of its products through incorporation of unique features that outdo those of the competitors in the industry, and through innovation in terms of developing new markets and unique brand products among others. In addition, through building of alliances with both competitors and customers alike, this will ensure its competitive advantage, thereby earning above-average returns. This could also be made possible through growth whereby Wal-Mart could focus on global markets by expanding its branches to cover not just 27 countries but over 100 countries in a bid to command a large market for its products to increase sales revenue and consequently earning above-average returns.

Using resource-based model to earn above-average returns would imply that Wal-Mart conducts a thorough organizational analysis in a bid to gauge its strengths and weaknesses to act as the basis for each strategy. Unlike the industrial organization model, which focuses on the external factors affecting a company’s performance, the resource-based model focuses on the structural characteristics of an individual company (Royer, 2013). This approach acknowledges that fact that each organization relies on a collection of unique resources and strengths that enables it to survive in the market. Because of the vibrant nature of a company’s strengths, there is need to manage the company’s portfolio of resources to be able to realize opportunities where these company’s strengths can be directed to enhance the company’s profitability.

Vision and Mission Statements

According to Books LCC (2013), Wal-Mart’s vision statement seeks to endorse ownership of its ethical culture to its wide array of international stakeholders. This greatly influences its overall success by encouraging all its stakeholders to uphold integrity and fairness for the sake of moral decency. In turn, this creates a good image of the company, which attracts as many people to associate with the company in one way or the other, hence ensuring its global success. On the other hand, the mission statement, which states that the company saves people their money so that they can live better (Books LCC, 2013). The simplicity of this mission statement makes it even more attractive and positively appealing to customers worldwide. Most people would want to associate themselves with such a company because it is a cost leader hence most of its products are cheaper and affordable compared to the competitors. Therefore, this mission attracts customers, thereby building a large base of supporters to encourage its growth and success.

Impact of Stakeholders to Company’s Success

As depicted by the Books LCC (2013), Wal-Mart has a number of stakeholders who see it through success as the world’s largest retailer. The first category of stakeholders is the shareholders who appoint the leaders to see through the governance of the company. They act as the principal who appoint the management as the agent to work in accordance with their interest. Their choice of leaders could easily fail or impair the success of this company. Therefore, they appoint competent and highly skilled managers to ensure their wealth maximization, thereby ensuring the success of the company. The management is the second category of stakeholders who have a direct impact to its success because of the fact that they are involved in the making of strategic management decisions that determines the future of the company in the retail industry. Secondly, workers who work in different Wal-Mart stores across the globe form an integral part of stakeholders. This category of stakeholders is involved in the execution of decisions made by the management and without them, the company cannot move forward and neither can it feel the taste of success. Additionally, customers make a critical category of stakeholders, as they are the reason that the corporation was initiated. Wal-Mart boasts of serving more than 250 million on weekly basis globally (Books LCC, 2013). The company aims to retain these customers as well as bring in more customers in a bid to increase its sales revenue-an indication that customers play an integral part in the success of this company.


Books, L. G. (2013). Wal-Mart: Wal-Mart, Asda, Criticism of Wal-Mart, Walmart Canada, History of Wal-Mart, Sam’s Club, Working Families for Wal-Mart, Walmarting. Memphis: General Books.

Hitt, M. A., Ireland, R. D., & Hoskisson, R. E. (2012). Strategic Management: Competitiveness and Globalization, Cases. Stamford: Cengage South-Western.

Royer, S. (2013). Strategic Management and Online Selling: Creating Competitive Advantage with Intangible Web Goods. London: Routledge.