Walmart Case Study Example | Topics and Well Written Essays - 500 words

Walmart - Case Study Example Wal-Mart has not been as successful in the e-commerce marketplace as other online vendors such as EBay and Amazon. A third weakness of Wal-Mart is its high operating costs including having the largest private workforce in the world. During the last two fiscal years the company’s operating expenses increased by 2.7% and 1.7% respectively (Walmartstores, 2011). The company is also susceptible to a variety of risks including foreign currency, lawsuits, and impairment of assets. I think that the neighborhood store format is at conflict with the company’s grand strategy of offering its customers the lowest prices in the retail market. The firm has always place high emphasis on running an efficient operation without any unnecessary added costs. The concept of the neighborhood store format goes against Wal-Mart’s strategy of standardizing its stores in the United States. The firm is able to lower its infrastructure costs by using a similar format in all its stores. Economies of scales are achieved at Wal-Mart by purchasing goods in bulk. Economies of scale are a key advantage for a business because it lowers a firm’s cost per unit (Tutor2u, 2012). Wal-Mart has been able to differentiate its product offering by providing its customers with a higher variety of items at lower prices. The neighborhood store format threatens Wal-Mart’s corporate culture and its long term success in the retail industry. The retail industry generated reven ues in the United States of $4,691 billion in 2011 (Plunkettresearchonline, 2012). Wal-Mart should expect a variety of challenges in its international expansion efforts. The first challenge the company faces is being able to carry over its US brand value into the international markets. Wal-Mart has gained its brand value through the accumulative efforts of its founder, managers and employees for over 50 years. Once the company started to operate outside the United States the company had to start from scratch by