Walmarts Competitive Advantage (Essay Sample)

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Walmart’s Competitive Advantage
Walmart’s competitive advantage in the United States can be attributed to brand equity. Majority of the customers prefer buying from the store due to low prices, excellent customer service, and trusting the brand. This brand equity allows the generation of more sales and revenues. Secondly, Walmart’s pricing strategy, the Everyday Low Pricing (EDLP), is a primary factor for customer loyalty and competitive advantage. Verma and Potluri (2019) state that the retailer’s supply chain management further allows bulk purchases from many suppliers, thus receiving a high bargaining power. As a result, the company can ask for the lowest prices on its products. Alcacer et al., (2017) state that the company’s large retail network including units in Africa, Japan, Mexico, Canada among others is a source of competitive advantage for the company. The international retail network provides a distinct competitive advantage which is larger than most competitors.
The retailer’s pricing strategy, EDLP, was difficult to replicate in other countries. For example, Koreans prefer luxurious shopping encounters compared to low prices. Therefore, Walmart faced tough competition from local conglomerates (Alcacer et al., 4). Brand equity was also difficult to replicate in countries like Germany where powerful local companies already had a loyal customer base (p. 5). Walmart was also in constant friction with labor unions and faced bad press for violation of regulations.
Since the year 2000, Walmart has expanded to regions like Central America in 2005 through acquiring about 33 percent of CARHCO which operated more than 300 stores in five nations. The success of the retailer was attributed to allowing stores to maintain their local identities as they had a large extent of localization. Walmart entered Chile in 2009 through a partnership with D&S stores which allowed the retailer to experience aggressive expansion (p. 3). Walmart also expanded to Japan in 2002 through an acquisition of a struggling store chain. Here, it faced high competition and experienced some uncertain expansion when the consumers grew more conscious of the prices due to a struggling macroeconomic climate (p. 5). The store also expanded to Africa in 2011 and faced strong opposition from trading unions (p. 6). Walmart's success in South Africa can be attributed to its entry which was seen as an avenue to a broader global market for local suppliers. Walmart faced challenges such as the replication of its efficient distribution structures in Mexico. Initially, Walmart prices in Mexico were higher than those of similar products in Walmart stores in the United States (p.3). This limited the retailer’s capacity to acquire market share.
Cultural differences can explain these differences in Walmart’s performance in different countries. For instance, some American staff administration practices failed to fit in the German environment. German consumers were not pleased with the store workers smiling at them or trying to bag their items (p.5). In addition, the retailer’s ethical code was frustrating to the Germans who saw behaviors such