Walmart Case Study Essay

Words: 5368
Pages: 22

Question 1) Determine the Core Competences of Wal-Mart. Substantiate your answer.

In order to determine the core competences of Wal-Mart, I will first need to conduct an internal analysis of Wal-Mart before we could identify the core competences of the company. The internal analysis consist of a few components, first we will have to identify the resources available to the company, followed by the capabilities of the company. After which I will put the capabilities through a numbers of models to determine if they “fit the bill” to be considered as a core competency of Wal-Mart. I will start by first identifying the resources.

The resource available to any companies compromises of two component, the first being Tangible resources,
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An aspect of having such an economy of scale is the aggregation effect, commonly seen as with other business such as The Home Depot and Wells Fargo, whereby Wal-Mart stock as many different products as possible. This allows the company to grow its revenue over the fixed cost base. • Cost Efficiency - Wal-Mart has a stringent stand towards controllable expenses. One example of how stringent is that associates working on a hourly basis can be reprimanded or even to the extent of being terminated for taking unauthorized overtime. Wal-Mart also filters out any inefficiency in the business; one example would be reducing paper used through computerization.

I have identified the five capabilities above, before I can deduce that they are able to be classified under the core competences of the company, I will need to put them through a couple of test. First would be the “Four Criteria of Sustainable Advantages” model, followed by the “Value Chain Analysis”.
The first model consist of four components, they are: • Valuable capabilities – which help a firm neutralize threats or exploit opportunities • Rare capabilities – which are not possessed that few, if any, competitors possess • Costly-to-Imitate capabilities – that other firms cannot easily develop • Nonsubstitutable capabilities – that do not have strategic equivalent

By putting the capabilities stated above through the four