Wal-Mart Stores

Competitive advantage can be defined as a means by which a firm manages to keep making money, add value by providing distinct products and sustain its position against its competitors. Wal-Mart Stores Inc. is one of such companies in the retail sector that has achieved sustainable competitive advantage over a period of time. This report focuses on how wal mart's competitive advantage has achieved competitive advantage by adopting cost leadership strategy and providing consumer goods at lower prices.

The report also discusses how Wal-Mart is taking lead on environmental sustainability by investing in solar power plants, offering environment friendly products in its various stores and encouraging recycling of different products. Wal-Mart’s strategies that have helped to reduce power consumption to a great extent as well as the company’s future plans to go green have been studied in this report. How Wal-Mart has gained sustainable competitive advantage Wal-Mart has adopted cost leadership strategy to achieve competitive advantage in the market.

They have achieved cost leadership by attracting price sensitive customers and offering lowest price consumer goods. The cost leadership strategies are helping Wal-Mart to reduce its cost of operations and thus enjoy higher profits as well as the larger market share. The company is able to beat its competitors such as Target Corporation by reducing prices and thus achieving sustainable competitive advantage to a great extent. The few techniques that Wal-Mart is using to gain sustainability are mentioned below. •Wal-Mart has gained benefits from economies of scale that helps to keep the prices lower as compared to the competitors.

The company is able to spread its fixed cost over a large number of units of products resulting in a lower cost per unit. •Due to its enormous size and large number of stores worldwide, Wal-Mart has the tremendous bargaining power with its suppliers and thus it purchases products at lower prices. •Wal-Mart purchases the products in a large quantity and thus enjoys a huge discount from the suppliers. •Wal-Mart also has the most efficient and inexpensive supply chain management which helps the company to reduce the cost of distribution and offer products at lower prices.

•The company also reduces inventory management cost by maintaining low inventory or just-in-time inventory which is a good technique to gain competitive advantage. Wal-Mart is slowly gaining sustainable competitive advantage over its competitors using these techniques. Wal-Mart’s advertising slogan “Save Money, Live Better” truly reflects the company’s strategy of providing products to a target market at lower prices. How Wal-Mart has gained environmental sustainability Due to increasing environmental imbalances, it is necessary for firms to achieve competitive advantages in the area of environmental convergence as well.

Wal-Mart is putting continuous efforts from a long time for environment sustainability and energy conservation. It also received Aspen Institute Energy and Environment award for Corporate Energy Efficiency in 2009. Here are a few steps that Wal-Mart has taken to encourage environmental sustainability: Using, encouraging and investing in renewable energy Wal-Mart is investing millions of dollars in renewable sources of energy to reduce greenhouse gas pollution. In 2008, the company saved approximately 15 million gallons of diesel fuel by increasing space in its trucks and reducing the number of empty miles driven by trucks.

By the year 2015, company is targeting to save about $215 million by reducing its fuel consumption. Wal-Mart has decided to reduce energy consumption by 30 percent in its stores worldwide and is investing to install solar power plants to produce electricity. The company has 29 solar plants to generate energy which help to prevent about 22,500 metric tons of carbon dioxide pollution per year. The company has also installed wind turbines which serve the 15 percent of electricity needs of about 350 stores.

Wal-Mart is expecting to increase its wind electricity and is testing 17 small wind turbines at Sam’s Club in Palmdale, California. Promoting environment friendly products Wal-Mart is constantly putting efforts to expand its sustainable offerings by promoting healthy, affordable and sustainable products. Wal-Mart is committed to provide environment friendly products at reduced prices such as organic food items, fresh seafood, clothes made from organic cotton and many more. Wal-Mart has also started partnership with Seventh Generation, the nation’s largest brand of environmental friendly household products.

As a part of their partnership, Wal-Mart will promote a variety of cleaning products from Seventh Generation such as laundry detergent, disinfecting wipes, dish soaps and all-purpose cleaners. In addition, the company works with different suppliers to educate the customers about the products that ate good for environment such as using CFL bulbs, organic fruits and vegetables, cold water detergents and many other products. Reducing and recycle waste material Wal-Mart is adopting different strategies to reduce the waste materials in its stores and recycle waste as much as they can.

The company has initiated three R’s policy for reducing waste materials – reduce, recycle, and reuse. Wal-Mart has started initiative to reduce the use of plastic bags by 33 percent per store by year 2013. In 2009, the company reduced plastic bag waste by approximately 66. 5 million pounds which is a fairly good beginning to reduce the waste material. The company is also implementing strategies to recycle millions of pounds of waste materials generated from its stores. Wal-Mart has collaborated with Samsung Electronics that will make it easier to recycle old televisions, DVD players and other consumer electronics.

The company has also started selling reusable shopping bags at Sam’s Club and retail stores in United States. These bags are made of recycled materials and thus can be recycled when they wear out. This step is going to reduce the use of shopping bags to a great extent and thus will help save the environment. Conclusion In conclusion, it can be stated that Wal-Mart is growing as one of the strongest retail company who is able to gain competitive advantage by implementing different cost leadership strategies.

The company is committed to offer lower price products and services and achieve maximum competitive advantage for its products. Wal-Mart being a leader in retail industry is also putting its best efforts to reduce the carbon dioxide pollution by using renewable sources of energy to achieve environmental sustainability over its competitors in the market. The company is also reducing and recycling waste materials from its stores thus reducing environmental pollution. Thus Wal-Mart is gradually achieving competitive advantage and environmental sustainability to a large extent by implementing efficient strategies.

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