Strategic Marketing of Wal-Mart in Contrast to its Competitors - Case Study Example

Due to the type of competition (from both up and down markets) that now faces Wal-Mart within the various markets that it competes within, the first section will analyze the level to which strategic groups define Wal-Mart’s market while the second part of the analysis will focus mainly upon the ways in which Wal-Mart can and should compete within the given sectors that it seeks to appeal. Accordingly, the first part of this discussion revolves around the definition and understanding of strategic groups. Figure 1.0, available at the bottom of this brief analysis, summarizes the strategic group situation that Wal-Mart currently competes within.

As a function of better understanding the level to which the determinant factors of this strategic grouping takes place, this author has defined the X and Y axis of the graph provided as product differentiation and price. Due to the fact that what the stores are able to offer and at what price seems to be the very foundation of the market’s definition of potential success, these have been determined to the most important factors. Due to the fact that the firm’s growth has massively slowed of late and many of the marketing practices and store differentiation techniques engaged upon have fallen flat, such a graph acquaints the reader with the need and necessity of the firm to plot an effective course and target this market as a means of expanding its sales well into the future.

As the case study illustrated, the fact of the matter is that Wal-Mart has been facing very sluggish growth since the early 2000s. As a function of this, the firm has sought to provide a higher level of the store and product differentiation as a means of seeking to capture lost market share and re-engage with customers that might have previously been uninterested in Wal-Mart’s products or presentation of these products (Rothaermel 52). According to the case study, millions of dollars were spent as a means to upfit and clean up Wal-Mart’s image throughout the country.

Similarly, a larger and larger number of stores were increased to supercenters as a means of providing an even higher level of product differentiation to the potential consumer. However, as has been noted, this strategy, although exorbitantly expensive, has failed to generate the revenue or the growth that Wal-Mart may have hoped for. Because Target represents Wal-Mart’s strongest retail competitor within the United States, the firm has expended untold millions attempting to mirror the cleaner more upscale look and offerings that the Target brand specializes in.

However, it is the belief of this reviewer that Wal-Mart should cease and desist from attempting to mirror Target’s offerings or style. Although it is always a scary decision for a firm concentrated on growth to not compete within a given market, Wal-Mart must make a very important choice. Will it choose to compete in the more upscale product offerings and appeal that Target brand offers or will it concentrate on what can only be described as Wal-Mart’s bread and butter of low prices and high product differentiation.

In such a vein of thought, this author will present 3 broad options available to Wal-Mart. The first is, of course, continuing down the path of competition with both upmarket and downmarket competitors and expending vast amounts of capital resources in order to accomplish this. The second is to seek to maintain the status quo that has proven to be a steady yet somewhat slower growth strategy for Wal-Mart within the past decade or so. Finally, the third would place the focus back to Wal-Mart’s ultimate strengths; competing within the down markets and seeking to provide a wide range of products at reasonably low prices to appeal to the demographic that has previously been recognized to be the staple of Wal-Mart sales (those households making less than 70,000 USD per year).

It is, of course, the belief of this author that Wal-Mart should focus more intently on the “down market” competition of Dollar General and the like; seeking to get back to the basics of what has made the firm the most successful and profitable company in the world. In this way, foregoing heavily competing with the likes of Target will allow Wal-Mart to more successfully engage the demographic that they have the most likelihood of generating further sales from; those that are also shopping and spending money at Dollar Tree and Dollar General stores throughout the United States; thereby boosting the ability of the firm to compete within the down markets.