Competitive Strategies for Wal-Mart

• The first Wal-Mart was opened in 1962 by founder Sam Walton, in Rogers, Arkansas. By 2008, Wal-Mart Stores Inc. had more than 590 locations in the United States and 100 locations internationally. Wal-Mart has become a retail giant offering a wide range of products, from groceries and clothing, to electronics and jewelry. Other retail giants like Target and Best Buy compete with Wal-Mart. However, Sam Walton's company continues to thrive in the highly competitive retail marketplace.

Big Box Phenomenon

• The emergence of Wal-Mart as a big box retailer has changed retail in the United States, according to a 2008 article on Wal-Mart and competition in AllBusiness.com. Big box retailers typically have stores exceeding 50,000 square feet. This type of store is standard, with large windowless single-story buildings. Several other big box retailers like Toys "R" Us, Best Buy, Target, Lowe's and Home Depot have created competition for Wal-Mart. However, Wal-Mart has stood out as the perennial merchandise big box retailer, according to the AllBusiness.com article. Because of its big box status, Wal-Mart has exceeded small retailers in profits. Annual revenues for 2004 were slightly over $288 billion. Revenues in 2006 exceeded $350 billion. Wal-Mart maintains its status as a big box retailer by seeking profits through a high volume of low-price items.

Low-Cost Leadership

• Wal-Mart's slogan is "Spend Less. Live Better." The giant retailer prides itself on providing customers with low-cost items that beat competitors. Wal-Mart reported a 3.6 percent increase in net income from cost cutting, according to an August 2010 Associated Press article. Customers are cautious about spending because of a slow economy, and Wal-Mart continues to be their low-cost option. Customers choose to shop at Super Wal-Mart centers for groceries, rather than the local grocery store because of discounted items. For example, Wal-Mart offers $1 ketchup bottles and $4 for a case of soda. The Associated Press article stated that Wal-Mart benefited during the recession as affluent shoppers were forced to downgrade to cheaper options.

Differentiation Strategy

• Wal-Mart uses the differentiation strategy to succeed by creating a product or service unique to customers, according to ReferenceForBusiness.com. Whether the feature is real or just in the mind of the customer, customers must believe they are being offered something special. The products must be marketed in a way that makes customers feel it is exclusive to the store. Wal-Mart has achieved this strategy by offering unique warranties and brand images. Wal-Mart customers believe they are being provided with something that they cannot find at any of the store's competitors.