Respond to at least two of your colleagues’ postings in one or more of the following ways:

Respond to at least two of your colleagues’ postings in one or more of the following ways:

· Compare your initial posting with that of your colleague, including insights on the role of the strategic planning cycle.

· In what ways do you agree or disagree with your colleague on competitive differentiation, and how can this enhance/expand on your understanding of competitive advantage?

· Provide a suggestion for an additional competitive advantage strategy to better support your colleague’s posting, including a rationale for your suggestion.

Please note that, for each response, you must include a minimum of one appropriately cited scholarly reference.

Herbert

Most Useful Assessment Phase For Walmart’s Competitive Advantage

Strategic planning can be referred to as an organization's process of defining its strategy, or direction, and making decisions on allocating its resources to pursue a certain strategy (Bryson, 2018). Strategic planners, who involve many parties, best execute this strategic planning and research sources in their analysis of the company and its relationship to the environment in which it competes. For retail giants like Walmart, strategic planning is a process/cycle involving inputs, activities, outputs and outcomes. The cycle should provide inputs for strategic thinking, which will guide the actual strategy formation. The end result should be a diagnosis of the environment and competitive situation, guiding Walmart on what should be accomplished, and key initiatives or action plans for achievements. Porter (1980) explained that formulation of competitive strategy includes consideration of four key elements: Company strengths and weaknesses; Intrinsic values of the key implementers; Industry opportunities and threats, and; Broader societal expectations. 

As the largest retailer in the world (Dyer, Godfrey, Jensen, & Bryce, 2016)), Walmart in its current state of business would be better off focusing on the outputs more than the other phases of strategic planning. This phase is preoccupied with documenting and communicating the company’s strategy and how it should be implemented, sometimes referred to as the strategic plan. Walmart’s strategy should include a diagnosis of the competitive situation, a guiding policy for achieving the company goals, and specific action plans to be implemented.  Walmart may use a variety of methods of measuring and monitoring progress towards the objectives and measures established, such as a balanced scorecard or strategy map. As part of the goal setting activity, Walmart may also want to robustly plan its financial statements for several years when developing their strategic plan. 

Walmart’s Competitive Differentiation From its Competitors

In business, especially the retail industry, competitive advantage can be referred to as the ability gained through attributes and resources to perform at a higher level than others in the same industry or market (Powell, 2001). Walmart can have a competitive advantage by providing the same value as its competitors (such as Target, Kmart, Dollar Tree…) but at a lower price, or by charging higher prices (than Aldi) by providing greater value through differentiation. Sharp and Dawes (2001) wrote that competitive advantage results from matching core competencies to the opportunities. Michael Porter further reiterated that cost advantage and differentiation advantage are the two ways in which a company, like Walmart, can achieve competitive advantage over its rivals. Walmart gets a cost advantage when it provides the same products and services as Target and Dollar Tree, albeit at a lesser cost. For example, from the year 2003, Walmart had sales-per- square-foot of $440, and Target had $249 but by 2012 Walmart’s sales-per-square-foot had dropped to $428, and Target’s had risen to $302 (Dyer et al, 2016). This is in line with what Sharp & Dawes (2001) explained as differentiation advantage – when a business provides better products and services than its competitors. 

Given the prevailing technological advancements, Walmart should halt or even cut down on the physically large retail establishment, but strategically focus on opening fewer stores as a deliberate choice tap into the e-commerce. This should be adopted in a bid to amplify its e-commerce muscles challenging its currently few competitors such as Amazon. That said, a physical presence is always a critical key to winning in online retailing and sales (Bakos, 2001). For example, this strategy can certainly parallel Amazon’s Whole Foods acquisition strategy. Apparently there have been big increases in the number of consumers buying online and pick up in-store. The fact that physical stores continue to bring in the bulk of sales should sharpen the focus for Walmart: the company needs to retain and attract in-store shoppers while optimizing operations to earn their share of e-commerce dollars.  

Assessment of Walmart’s Value Proposition

Value proposition can be referred to as a promise of value to be delivered, communicated, and acknowledged. It is also a belief from the customer about how value or benefit will be delivered, experienced and/or acquired (Lindic & Marques, 2011). Walmart is famously known of its innovative thinking, service leadership, and their latest slogan of a commitment to save people money so they can live better (Dyer et al, 2016).  Walmart excels in its values by creating efficient supply chain management and moving products from suppliers to buyers in a timely manner. Walmart is a unique company in terms of its impact and influence on changing corporate business and labor practices.  The size of Walmart is nearly 4,761 stores, which makes them a convenient shopping mecca for American consumers.  Walmart’s strategy of selling a variety of products at discount prices has enabled the company to gain greater control of the retail industry and to demand manufacturers lower their prices (Dyer et al, 2016). The company’s efficiency and productivity is more profitable because of their sophisticated system and information technology to track inventory.  Also, Walmart boosted efficiency and productivity far ahead of their rivals by creating a new management paradigm for their particular industry.

References

Bakos, Y. (2001). The emerging landscape for retail e-commerce. Journal of Economic Perspectives, 15(1), 69–80. doi:10.1257/jep.15.1.69

Bryson, M. J. (2018). Strategic planning for public and nonprofit organizations: A guide to strengthening and sustaining organizational achievement (5th ed.). New York City, NY: John Wiley & Sons.

Dyer, J. H., Godfrey, P., Jensen, R., & Bryce, D. (2016). Strategic management: Concepts and tools for creating real world strategy. Hoboken, NJ: John Wiley & Sons.

Lindic, J. & Marques, C. (2011). Value proposition as a catalyst for a customer focused innovation. Management Decision, 49(10), 1694–1708. doi:10.1108/00251741111183834

Powell, C.  T. (2001). Competitive advantage: Logical and philosophical considerations. Strategic Management Journal. 22(9), 875–888. doi:10.1002/smj.173

Sharp, B. & Dawes, J. (2001). What is differentiation and how does it work. Journal of Marketing Management, 17(1), 739-59. doi:10.1362/026725701323366809

Dawn

Role of Strategic Planning

Knowing and understanding the similarities and differences between competitors can be advantageous for business managers, marketers, advertisers, and consumers.  Many businesses today are involved in social networking and philanthropic endeavors which require companies to build strong, social cultures.  Retailers, in particular, perform many functions.  They buy and assemble goods; store products; sell products to the customer; but the primary focus of any retailer is to maximize on customer satisfaction by delivering quality products and quality services (Harvard Business Review, n.d.).  As competition is inevitable, strategic planning becomes imperative.  Strategic planning can concisely be described as the vehicle which drives or guides organizations to optimize their acquisitions and allocation of resources, thereby helping organizations obtain and maximize business goals and objectives (Allison & Kaye, 2015).  

The role of strategic planning is significant because it outlines the most systematic and structured way to utilize valuable resources and leverage the company's strengths.  Moreover, the strategic planning process is also about alignment and commitment.  It is vital that the plan be well communicated with organizational team members and that stakeholders are fully engaged (Dyer, Godfrey, Jensen & Bryce, 2016).  It is through a well-executed business strategy that a company can not only gain but sustain competitive advantage (Dyer et al., 2016).         

Wal-Mart's Competitive Advantage and the Strategic Planning Cycle

During the Retail Revolution of the 1960’s, Wal-Mart had a humble beginning in 1962 when Sam Walton opened the first Wal-Mart store in Rogers, Ark.  Seeking to prioritize efficiency while bringing down costs has been the mastery of Wal-Mart and its operational excellence (Corporate Wal-Mart, 2017).  Wal-Mart has been relentless pursuit in passing down low costs to the consumer.  Therefore, they continue to embrace technology and become innovators in the way stores track inventory and re-stock their shelves allowing them to cut costs (Tradegecko, n.d.). 

The Strategic Planning Cycle can be summarized in five stages: 1) Develop the mission; 2) Analyze and construct the organization's SWOT analysis; 3) Formulate strategy based on SWOT analysis findings; 4) 

Competitor Differentiation (Wal-Mart and Target)

Target built a company brand, focusing on ‘hitting the center of the bullseye’, in terms of retail goods, services, commitment to the community, price, value and overall experience (Corporate Target,2017).  Target continues to be a strong competitor as a reputable, mass-market retailer.  Target found its niche market in focusing on home products and apparel.  Their pricing represents high-quality products, services, and advertising, while successfully catering to those who desire trendy merchandise at affordable prices.  Target began their philanthropic endeavors in 1946, which were focused on giving back to the community and has continued to transition into the world of social media and social networking structures (Corporate Target, 2017).  In taking great pride in affirming their purpose and values through service and social networks while utilizing unique marketing and advertising strategies to express their identity, target continues to be a strong competitor of Wal-Mart.

Although both Wal-Mart and Target are discount chains, their greatest differentiation can be seen in their pricing structure and target market (Recomparison, n.d.).  Wal-Mart's niche market are those whose median income ranges between $30,000 and $60,000, and who value low costs over value, whereas Target services a niche market whose income is over $64,000 and who seek trendy home decor and fashionable apparel at more reasonable prices than full-line retailers (CBS News, 2012).    

Wal-Mart's Target Market and Competitive Advantage

Wal-Mart's target market plan has been successful in honing in on small towns that were generally left out and securing their competitive advantage by purchasing bulk items and minimizing operational costs in order to pass down low costs to their devoted clients.

Wal-Mart's Value Proposition

Wal-Mart has just about perfected the idea of perceived value, which a vital element in strategic management (India, n.d.).  Wal-Mart's customers are drawn to the advertising of low prices, as well as the ability to purchase just about anything they need in a one-stop-shop.  Wal-Mart is also listening to their customer's cry for convenience and services, as the now offers online grocery shopping and reserved pick-up times in many locations.  I believe Wal-Mart's value proposition in pricing structure is legitimate, but the findings are disheartening.  According to Tabuchi, an analyst for the New York Times, Wal-Mart is not only known as the nation's largest retailer but also the biggest importer (2015).  Which is the main reason why they can sell much of their products at such low costs.  Wal-Mart's imports tallied to at least $49 billion only 5 years ago (Tabuchi, 2015), Wal-Mart acknowledged the concern of economists and has committed to increasing American-made products by $50 billion over the next ten years (Tabuchi, 2015).  The litmus test will come to see how and if, their product and service pricing will change over the next few years.  Only time will tell.

References

Allison, M., & Kaye, J. (2015). Strategic planning for nonprofit organizations: A practical guide for dynamic

times. Retrieved from https://ebookcentral.proquest.com

CBS News. (2012). Walmart and target: A tale of two discount chains. Retrieved from

https://www.cbsnews.com/news/walmart-and-target-a-tale-of-two-discount-chains/

Corporate Target. (2017). Corporate Responsibility. Retrieved from https://corporate.target.com/ 

Corporate Walmart. (2017). Our history. Retrieved from http://corporate.walmart.com/our-

story/our-history

Dyer, J. H., Godfrey, P., Jensen, R., Bryce, D. (2016). Strategic Management: Concepts and Tools for

 Creating Real World Strategy, 1st Edition. [MBS Direct]. Retrieved from

 https://mbsdirect.vitalsource.com/#/books/9781119134817/

Harvard Business Review. (n.d.) Why great companies think differently. Retrieved from https://hbr.org/2011/11/how-great-

companies-think-differently 

 India, R. (n.d.) Evaluating value proposition for Wal-Mart. FTMS Global, p. 12. Retrieved from

www.academia.edu/9881821/value_proposition_for_Walmart   

Recomparison . (n.d.). Walmart v. Target.  Retrieved from http://recomparison.com/comparisons/100217/walmart-vs-target/

Tabuchi, H. (2015). Walmart's imports from China displaced 400,000 jobs, a study says. Retrieved from

www.nytimes.com/2015/12/09/business/economy/walmart-china-imports-job-losses.html 

TradeGecko. (n.d.) Walmart’s successful supply chain management. Retrieved from https://www.tradegecko.com/blog/incredibly-

successful-supply-chain-management-walmart