Chapter 8 - Selecting Corporate-Level Strategies

When I think of Walmart, I automatically think of cost savings and a one stop shop. At Walmart I can get my necessary groceries, a card for Father's day, shampoo, and a good scented candle for the living room. Walmart practices a combination strategy of overall cost leadership and differentiation. Walmart accomplishes differentiation by having a wider variety of products than their competitors. Walmart's transportation, logistics, and information systems lower their costs as well. Walmart utilizes economies of scale by buying all their products in bulk to maximize production. Walmart's successful overall cost leadership/differentiation strategy leads to high entry barriers for competitors. It also makes it hard for substitute products to enter the market. Walmart also has bargaining power with their suppliers. They changed their competitive challenge from retailing to transportation logistics and communication industries to play to their strengths. Walmart has avoided the pitfalls of the overall cost leadership/differentiation strategy by not getting "stuck in the middle" and properly calculating future revenues and expenses.