MBA FPX 5006 Assessment 2 Business Strategy

Business Strategy

Student name

Capella University

MBA-FPX 5006

Professor Name

Submission Date

The giant retailer Walmart Inc., that has the biggest retail business globally and has more than 11,000 retail outlets all over the world and a rising eCommerce that aims to connect with its buyers via online shop has turned into a dominant force in both the ecommerce and retail industry, which is a highly competitive and dynamic market that is characterized by price sensitivity, faster innovations in technology and swifter delivery, a growing preference of convenience To determine how much these directions are compatible with one another and how these directions, in turn, produce a long-term sustainable competitive advantage, the paper will examine Walmart overall strategic direction (business strategy), as well as, corporate-level direction (corporate strategy) and business model.

External Environment Analysis: Summary of Porter’s Five Forces

Walmart competes very well in the retail stores and online stores industry. The price competition has been regarded as the most crucial of all since a shopper can establish all the prices of the stores and has enough power as a buyer to compel all the competitors to reduce their profitability (Lin et. al., 2024). The competition also heightened due to the increasing number of online stores at the current stage, since now online stores are more convenient, have faster delivery services, and are capable of offering more individualized services, which the shifting consumer purchasing patterns require at a higher rate. Consequently, Walmart will keep on spending colossal sums of money in technology development, warehouse operations, and pricing procedures, to build additional value for its customers and maintain its market share.

The strength of suppliers in the retail industry is moderate. The volume of purchases of such sums, years of acquaintance with suppliers, and the fact that many of these companies have high bargaining power make it easy to win the second option (Durand and Baud, 2023). In spite of these benefits, there exist certain threats of relying on such elaborate worldwide supply networks to retailers because they too may become vulnerable to geopolitical war, labor conflicts, and transportation slacks. The consequences of such risks may be adverse to the supply of goods and may lead to high costs and a reduction in the overall efficiency of the retailer’s operations.

Generic Business Strategies for Walmart Inc

Cost Leadership as the Primary Competitive Strategy

The Walmart business model is closer to the cost leadership strategy, with an impressive basis on its Everyday Low Price (EDLP) strategy. This model would focus on the price-delicacy customers, where it would sustain low prices on its commodities across its product range, and this would result in high sales volumes (Kumar, 2025). Rather than the strong promotional conditions or the occasional discounts, Walmart has a determined low price as a central tenet, which earns the customer’s trust and elicits the urge to repurchase.

By such a strategy, Walmart is able to establish itself as a formidable competitor to the long-standing discount stores and even the more recent online stores, effectively cementing Walmart as an online store with a significant share of everyday needs at a reasonable price. The operating philosophy embraced by the company is anchored on its pursuit of profitability, founded on economies of scale and cost efficiencies against high unit profits. As a result, Walmart will be able to generate significant revenue by offering competitive prices across different markets.

Operational Efficiency and Process Optimization

Efficiency in its operations is one of the main pillars of the cost leadership strategy by Walmart, as it has a highly integrated distribution and logistics network. The company has a comprehensive network of regional distribution centers, which makes use of cross-docking, automation technologies, and advanced transportation management systems, minimizing storage time and handling costs (Bharadwaj, 2024). These efficiencies would allow quicker product flow along the supply chain and a reduced cost of operation.

The high purchasing power of Walmart enhances its cost advantage as well because it can use this to bargain for better terms with its suppliers, and thus it will be able to acquire low cost, which it can pass on to its customers by offering them at low prices. Moreover, advanced inventory management solutions can give up-to-date information on sales and inventory positions, aiding in a decrease in waste, stockouts, and overall responsiveness of the supply chain. The combination of these abilities helps Walmart have its lower operating expenses than most of its competitors, which has allowed it to challenge and compete aggressively on price and also be able to remain profitable.

Role of Technology in Supporting Cost Leadership

Walmart is known to deploy the technology in many applications to create a cost-leadership strategy, including improving the accuracy of its forecasts, increasing its labour productivity, and increasing customer engagement in its brands through government initiatives. To accomplish that, Walmart uses big-data technology (analysis and artificial intelligence) to have a more prominent understanding of the way people purchase it; it is an easy method to successfully introduce a low-cost strategy; it offers a way of getting high-quality forecasting solutions and addresses the issue of out-of-stock and inefficiency problems throughout its supply chain.

More avenues where Walmart can open itself to the digital world include the o-channel retail strategy of the company in allowing customers to make their purchases via the internet and then return to the actual store, and subsequently lowering the cost of product delivery and allowing it to take advantage of the physical resources more effectively (Sharma et al., 2025). The company can also use automation, robotics, and machine learning technologies in their operations in the warehouse/fulfilment centre to achieve not only optimisation of their operational performance, but also make the warehouse/fulfilment centre operations labour-free in the long term.

Drawing toward a digital-first presence in all of its operations (and customer connecting) will enable Walmart to maintain its low prices and flexible operations as it becomes exposed to an ever more competitive and technology-intensive nature of its environment.

Business Strategy in Marketplace Approach

Target Market and Pricing Position

Walmart has a great diversity of customers, particularly families who desire a low cost of their daily necessities such as food, toys, and apparel. They do not prioritize high-end products; they prioritize low cost. It generates numerous customers and sales among all kinds of people throughout the country. Due to this, they will create customer loyalty and continue receiving customers regularly, even in areas with only a few low-cost stores that offer things.

Omnichannel Competitive Strategy

To improve convenience and faster delivery, Walmart is combining its physical stores and virtual stores into its strategy. The mobile app orders, curbside pick-ups, and same-day delivery offer consumers the privilege to switch instantly between the physical and online platforms that suit them better or satisfy their needs at the moment of shopping.

Competitive Positioning Examples

Store-based fulfilment and use of a home-labelled brand is also an advantage that Walmart has over its competitors. Its cheaper versions as a privately-labeled brand open the option of acquiring more profit margins based on the opportunity of assuring the demanded quality (Wright, 2024). Also, the local stores can deliver on the same day and can even place orders on the curb, thus saving on the delivery costs as well as bringing more convenience and allowing Walmart to make use of the additional advantages of the local stores in better competition with Amazon and with traditional discount stores.

Business Model Analysis

More Products and Services

Walmart’s primary goods include everyday items such as food, home supplies, prescriptions, clothing, electronics, etc. This assortment of products generates repeat customers, and grocery sales are a major driver of foot traffic, allowing for multiple categories on return visits. Thus, grocery sales provide opportunities for repeat shoppers to purchase from many different categories through curiosity-based exploration at Walmart stores.

In addition to regular retail locations, some Walmart locations have expanded their offerings through various additional services, like clinics and optical care, in addition to basic banking services. By offering customers hundreds of items in one place, Walmart is able to meet almost every consumer’s needs as a one-stop shop for everyday purchases.

Revenue Generation Model

Direct retail sales are another important source of revenue for Walmart. Walmart receives these revenues from both physical stores and online sales, including through growth in online shopping due to increased use of the internet. In addition to retail revenues, Walmart Connect generates additional revenues through advertising, and Walmart+ generates revenue through membership subscriptions. Walmart also charges commissions to third-party suppliers for selling through Walmart’s marketplace.

By offering a broad range of ways to buy from Walmart, Walmart can reduce its dependence on traditional in-store retail sales while increasing its ability to monetize its growing digital business. By incorporating digital capabilities into its retail operations, Walmart is able to offer value across all consumer experiences — from browsing to buying to using.

Customer Value Proposition

Giving its customers a mix of low prices, convenient shopping, variety, and constant availability in-store or online, Walmart can generate value for its customers by providing them with a simple means of shopping (things they require), at a lower price, with the option of online shopping and delivery to their home (Tang et al., 2024).

Spread all over, Walmart makes itself available even to those in rural or suburban regions who may often have little choice in shopping. When you combine affordability, convenience, and variation that Walmart has to offer you it contributes toward making them the 1 place to go when it comes to all manner of things you need in your everyday life.

Profit Proposition

In a bid to maximise its profit margins, Walmart tries to minimise its expenditures through increased volume purchasing. One such example is that it will have lower costs of products as compared to smaller competitors. Not only does Walmart buy their products at prices which are significantly lower than those of their competitors, but they also have a variety of different methods of subtracting from their costs, including:

• By taking with them their own brand-name product line, to maximise their gross margins
• Getting the best out of contracts with their suppliers; and
• Automation of its logistical systems by use of technology (Tang et al., 2024).

Corporate Strategy Analysis

Product Diversification and Business Expansion

The corporate approach of Walmart is to expand more than just the traditional retail business and to introduce new services or platforms, all of which are going to be used eventually to maintain its operations. The company has also come up with innovative strategies to increase access (by opening more clinics and offering tele-health solutions) to basic health care for customers (Alenoghena et al., 2023). Various financial services and online advertising, including Walmart Connect, have also established a number of new products that have not only made monetization of customer data possible, but also supplier relationships as well. With such products and services being part of its product range, Walmart can augment its revenue-generating possibilities, coupled with enhancing the overall performance of its retail services.

Geographic Scope and International Strategy

With main branches being located in the United States, Mexico, and Central America, and other areas of Asia, Walmart is spread out globally to implement a rapid-growth international expansion plan that will allow it access to areas that are the fastest-growing consumer markets. Walmart has long-term focused on growing its business in less successful markets compared to a one-size-fits-all approach and reinvested its resources in those markets (Alenoghena et al., 2023). Localized approach in the form of different product assortment and price point to suit regional tastes and preferences has given Walmart a competitive edge in the global market. The local strategy can be implemented to offer Walmart a means to bridge the concept of being global and the concept of being market-specific.

Vertical Integration across the Value Chain

This vertical integration has the advantage of enabling Walmart to be able to control its prices and the quality of products that they offer to its customers. They achieve this by collaborating closely with their suppliers and increasing their own label products, which, in combination, make the overall supply chain of Walmart more resilient and dependable. By having a large proportion of the value chain major processes, Walmart strengthens its cost leadership strategy at the same time, enhancing the reliability and resilience of its supply chain (Potiker et al., 2024).

Corporate Structure and Management Systems

To attain its operational objectives as a functional organization and a geographic organization, Walmart has adopted a matrix organizational structure. Walmart has the most centralized decision-making body of the organization in strategic operations at the corporate level, and regional managers in their respective regions implement the local market orientation of the organization (Potiker et al., 2024).

Measurement of performance is made on the basis of sales, turnover of inventory, and customer satisfaction measurements to inspire performance within the operations. Furthermore, the organization focuses on workforce development through training and leadership, and on sustainability reporting to enhance long-term organizational performance and accountability.

Strategic Alliances and Partnerships

To provide and enhance customer engagement, Walmart works with technology providers on the status of their ability to help them sustain, innovate, and perform in the digital realm (Mancuso et al., 2023). By establishing a strong partnership with technology companies, Walmart can establish and maintain a robust online presence and supply chain system to meet its current needs in the areas of cloud computing, analytics, and automation. Furthermore, the alliances can assist companies to further evolve through innovation, as not all innovations necessarily need to be created in-house.

Being in a foreign market, as well, Walmart is also in the process of cooperating with the suppliers, logistic companies, and other local businesses (Mancuso et al., 2023). Supply relationships assist Walmart in establishing the availability of products and managing its costs, and locally-based associates assist Walmart in its attempt to respond to its local regulations and meet its customer expectations. The relations, which Walmart has established with these partners, are helpful not only to minimize the risk of an operational collapse but also to guarantee the market penetration and expansion in foreign markets.

Strategic Fit Between Business and Corporate Strategies

Alignment Between Cost Leadership and Corporate Investments

A high level of integration exists between Walmart’s business strategies of corporate cost leadership and its investment in logistics, technology, and diversification of services. The application of automated distribution centers, transportation fleets, and store-based fulfillment systems has enabled Walmart to not only reduce its operating costs but also allowed the company to improve the effectiveness of its supply chain as well (Mancuso et al., 2023).

The use of data analytics and artificial intelligence in projects like demand planning, price optimization, and inventory management has all helped to further enhance operational efficiency. Moreover, by entering into the advertising business area, healthcare, and financial services, Walmart is utilizing its established infrastructure and customer traffic to further generate more revenues as well as subsidize the cost of its existing business of low-price retailing.

Evaluation of Strategic Strengths and Risks

The total strategic approach made by Walmart drives significant competitive benefits out of economies of scale, supplier leverage through bargaining power, and an enormous market presence, resilience to compete with competing firms (Mancuso et al. 2023). By means of vertical integration(s) and the digital transformation of processes, initiatives could be made in response to the changes in consumer buying patterns, as well as issues related to disruptions within the supply chain.

International trade, the laws governing commerce, and capital expenditures on technology will only complicate the already existing issues that tend to create risk in business, and also increase costs related to running a business. Moreover, as new online retailers emerge, and the consumer demand for convenience and immediacy changes, there will be a need to have an ongoing incremental innovation in reducing the financial burden of reducing costs and providing both long-term viable and strategic investments.

Conclusion

Walmart is in a good position to take the leadership role in the cost leadership strategy, scale supply chain management, and capitalize on the general trend toward more digital connectivity. Its corporate investments and business strategies can be equated to be competitive in the long term, in both the physical retailing market and the online retailing market. It will also be necessary to pay a lot of attention to the technological sphere, optimization of logistics, and growth of services. The synergistic approach overall places Walmart in a position where it can continue to be an entity in the global retailing business.

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