Sun Zi’s Art Of War Theory: Walmart Analysis
From the studies of Sun Zi’s Art of War, this theory interprets that those who arrive first at the battleground will have sufficient time to rest and prepare against the enemy and those who arrive late at the battleground will have to rush into battle when they are already exhausted. The first mover in the business field refers to a company that introduces a new product or service, hence creating a new market; this allows the company to enter into an unexplored market to gain competitive advantages. Being the first mover would restrain their competitors to imitate them since they have already built up strong brand recognition and loyal consumers.
Through our research, Walmart Inc. has been known for offering lower prices of products in retail. Sam Walton, the founder of the company started seeing offering lower prices and helping people to save money as a business opportunity. Walmart Inc. was the first mover to offer lower prices in retail. In the early years of 1950, Sam started a backward expansion strategy, he launched his first five-and-dime store with a business model that was focused on keeping prices as low as possible. Walmart stores were located in small and rural towns, the stores locations were as near as 100 miles from their distribution centers. This allows Walmart to cope with the business model. As a comparison, Walmart has lower operating expenses than their competitors that only focused on stores in large town regions. Besides, the company has slowly achieved high volume of sales, which enables Walmart to gain bargaining power over their suppliers. The company’s goal of saving people’s cost has successfully captured a large number of profitable values from their customers.
Since the beginning of the business, Walmart has slowly built its brand recognition and expanding the business across countries, with 11,695 retail stores and e-commerce websites in 2019. Customers don’t walk into Wal-Mart expecting to find assistance in every aisle, employees who will carry their shopping bags to their cars, or expensive artwork on the walls. They expect to find the lowest prices on products they can grab off the shelves quickly. That is Wal-Mart’s purpose and its brand promise — nothing more, nothing less. It is simple and unique to Wal-Mart (Louis Efron, 2017).
For instance, their competitors were struggling to compete with their market share in brick-and-mortar retailing since they are the first retailer to offer lower prices that has a huge number of sales and loyal customer base which makes the company different from the rest of their competitors. For example, during year 2000 Walmart.com was founded to enter into the new millennium market, the company has continued to evolve its retail e-commerce business since 2003 to compete with its online retailer competitor, Amazon.com. As the world’s largest retailer, Walmart also offers online grocery shopping, the expanded grocery delivery and pickup has played a part in the jump of Walmart’s e-commerce sales. Amazon.com may be the uppermost in e-commerce that captivates a large amount consumers, but Walmart is showing its sizable store fleet. Walmart as a first mover had nearly 4800 U.S stores at the end of July, including nearly 3600 supercenter stores. Amazon-Whole Foods store count is below 500 (Andria Cheng, 2018). Walmart was actually few years ahead for offering grocery pickup regardless Amazon has develop its brick-and-mortar locations, Walmart has greatly outnumbered them. In other words, Walmart has gained a competitive advantage in online retailing with the merging of traditional retailing.
Furthermore, there are other competitors such as Target Corporation, Dollar General Corp and Costco. These retailers have a common strategy in gaining revenue by offering competitively-priced consumer goods, these stores sell broad range of products to the consumer on lower prices as well. However, Walmart is considered as a successful first-mover strategist and remained one of the top discount retailers, with its huge volume of loyal customers, brand recognition, and bargaining power over their suppliers which makes their competitors strive hard to compete.