There are a few weaknesses, however, that could be exploited by competition. One such weakness is that reputation that Wal-Mart has for low quality items. While this reputation does not exist among all consumers, among some segments of the population Wal-Mart has a bad reputation and that creates opportunities for firms to enter the market with a differentiated strategy.
Another weakness that Wal-Mart has is that the company has alienated many American suppliers. A number of suppliers no longer deal with Wal-Mart because their brands were suffered as the result of cost pressures that the company put on them. Wal-Mart is now dependent on Chinese production and therefore on an artificially undervalued yuan. Should China no longer be able to supply cheap goods -- as happened previously with Japan, Korea and Taiwan -- Wal-Mart will be forced to find new sources of goods. This could put them in a position where they would see reduced bargaining power, in particular if they need to revisit U.S. suppliers that no longer deal with Wal-Mart.
Overall, however, Wal-Mart is a very strong company as the result of its multi-decade growth and tremendous success. Its strengths are stronger than its weaknesses are weak, meaning that overall the company can use its strengths to derive more income and profit than its competitors can use its weaknesses to take that income and profit. As the result of this, Wal-Mart is well-positioned to continue to pursue its mission over the course of the coming years.
Works Cited:
MSN Moneycentral: Wal-Mart Stores, Inc. (2010). Retrieved June 24, 2010 from http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?Symbol=WMT
Markowitz, a. (1994). State-of-the-art power merchandising propels Wal-Mart into the future. Discount Store News. Retrieved June 24, 2010 from http://findarticles.com/p/articles/mi_m3092/is_n12_v33/ai_15481700/
Troy, M. (2003). Logistics still cornerstone of competitive advantage -- Wal-Mart the category king: A new era of excellence. DSN Retailing Today. Retrieved June 24, 2010 from http://findarticles.com/p/articles/mi_m0FNP/is_11_42/ai_103119290/
Sample Source(s) Used
Works Cited:
MSN Moneycentral: Wal-Mart Stores, Inc. (2010). Retrieved June 24, 2010 from http://moneycentral.msn.com/investor/invsub/results/statemnt.aspx?Symbol=WMT
Markowitz, a. (1994). State-of-the-art power merchandising propels Wal-Mart into the future. Discount Store News. Retrieved June 24, 2010 from http://findarticles.com/p/articles/mi_m3092/is_n12_v33/ai_15481700/
Troy, M. (2003). Logistics still cornerstone of competitive advantage -- Wal-Mart the category king: A new era of excellence. DSN Retailing Today. Retrieved June 24, 2010 from http://findarticles.com/p/articles/mi_m0FNP/is_11_42/ai_103119290/
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