Innovation and Competitive Analysis

Project Deliverable 2: Innovation and Competitive Analysis – Wal-Mart

Strayer University

Week 5

A company’s competitive nature speaks to the qualities that a business possesses. Those specific qualities have a huge hand in making the organization try to out compete their competitors, and often seen as a company’s competitive advantages. Those personal characteristics allow the organization to contain shares of the market and they are made up of things such as natural resources, geographic location, high skilled labor, power sources that are low cost, and entry barriers. Those help in assisting businesses in being attractive and keeping more of their customer base which is a result of making products considered higher quality. Company performance also greatly improves when the business finances are considered stable for the most part (Brown & Perry, 1994).

Porter’s Five Forces Analysis is one kind of assessment model that is used quite a bit when analyzing market competitiveness of a company. This kind of framework relies on Porter’s method in the market, which makes a determination in regards to business competition within the specific market that the business is in. Those forces are as follows: Supplier bargain power, rivalry in the industry, customer bargain power, substitute threats within the market, and new entry threats in the market (Barney, 1995). A business’s ability to become successful lies with the capacity to overcome those kinds of market factors, which determines their industry competitiveness.

Wal-Mart, better than most companies have the ability to withstand Porter’s five factors due to them being the biggest retailer in the world. That means that their rivals cannot compete with them in the marketplace. Porter’s factors when it comes to Wal-Mart can be explained as such; substitute threats in products and services in the marketplace. Wal-Mart specializes in many different products like home items and appliances, entertainment, and health. Substitution threats are pointless when it comes to Wal-Mart because of their product diversity. So, this organization does not have to deal with those kinds of threats.

Rivalries of existing businesses are another one of Porter’s forces that has an effect on the Wal-Mart organization. Wal-Mart faces a lot of tough competition since this is an industry that has a lot of rival companies that sell the same things as Wal-Mart does. Due to them selling food on top of everything else, that is the main reason why this industry is flooded with competition. On the other hand, Wal-Mart also put their company in a great spot in this area. Wal-Mart’s bargaining power over their suppliers is also another one of Porter’s forces that determine their competitive spirit. They offer their products at lower costs than the competition i.e. competitive advantage because they give the most business to their suppliers than their rivals due to the size of their company alone (Pfeffer, 1994). Competitiveness in this case is also influenced by the customers of Wal-Mart’s bargaining power. They retain most of their customers due to their products being of high quality and low price. Lastly, operations of Wal-Mart are affected in a big way by new entrants’ threats. Wal-Mart does not suffer major blows from newer industries that come into the market because they are already huge and they sustain themselves in the top spot in the overall market.

Many places of business have begun to use technology in many different phases of their daily operations on a global scale (Lindh & Ekman, 2016). Wal-Mart is one of those businesses that are taking big advantages of technology advancement in order to run a smoother and more efficient operation. An innovative way in which the company has done this has been earning more revenue and improving sales via their online shopping platform. This enables them to reach consumers that they previously could not reach out to. They are also using technology to create apps for mobile phone users for ordering and making arrangements for shopping. This is a time-saving maneuver for the company and the consumer especially. People who have smart-phones (which is a lot of the population home and abroad) can use those apps. A few other trends in this area consist of website improvements, optimizing inventories, and assortment advances. Those kinds of trends could be used to bolster the company’s performance and very do-able in the economic market and climate. That is due to them already being battle tested in the market unquestionably if they apply their similar approaches. They will increase their market share in the industry with the usage of technological advancement and innovation and will have a significant and positive impact on their performance. For example, the ability to offer online their same products or perhaps other products is convenient for their customers.

Wal-Mart at the present time maintains a lot of resources and that enables the organization to be more-so than other companies stable, both resource and financial-wise. They have the five core value system as well. Those core values are responsibility, opportunity, integrity, community and family and working with a purpose in order to operate their business effectively. Those principles have made Wal-Mart very influential and resource heavy in their industry. They believe in offering quality services and products in order to make people’s lives better, which is why they are the most recognized and respected business in their market. This is why they are outperforming everyone else in the industry and they are the leaders of the industry in providing high quality at low prices, which they create that standard that everyone else is trying to get to.

Wal-Mart has a lot of different stores both domestic and abroad. This kind of structure with the company allows them to be more innovative with their business operation. That will allow them to increase their market share and reach a lot of different customers as well. An organizational make-up such as theirs allows them to be innovative due to them reaching out to a lot of different gifted employees who have different backgrounds, cultures, and ideas, which in turn is a competitive advantage. Wal-Mart has made the industry as a whole be more competitive and keep an edge over their rival companies in the marketplace. This is why they are the most successful organization in the industry.


Barney, J. B. (1995). Looking inside for competitive advantage. The Academy of Management Executive, 9(4), 49-61.

Brown, B., & Perry, S. (1994). Removing the financial performance halo from Fortune’s “most admired” companies. Academy of Management Journal, 37(5), 1347-1359.

Lindh, C., & Ekman, P. (2016). Integration of Information Technology in Business Relationships: Implications for the Extended Network. In Extending the Business Network Approach (pp. 177-191). Palgrave Macmillan UK.

Pfeffer, J. (1994). Competitive advantage through people. California management review, 36(2), 9-28.