Wal-Mart's Core Competence And Domestic Retailers' Competitive Strategy

According to the commitment made upon its entry into WTO, China has opened its retailing industry to the outside world, which brought about both opportunities and challenges for China's domestic retailers. The world-famous consulting body McKinsey&Company predicted that foreign retailers would account for 60% of China's retailing market while domestic retailers could keep only 30% of the market share after the all-around opening of China's retailing market. Once foreign retailers control the retailing market of our country ,it will have a serious impact upon the development of the industry, which we have to spare no efforts to avoid. Therefore, the author thinks that it is of much meaning both in reality and in theory to select WalMart's Core Competence and Domestic Foreigners' Competitive Strategy as the topic and to find out the development strategy and competitive tactics for China's domestic retailers to build up their core competence.The author uses the following research methods in writing the article :combination of theory and reality, case study, comparison analysis and strategy orientation. By using method of the combination of reality and theory, the author applies C.K.Prahalad and C.Hamel's Core Competence of the Corporation to the realistic situation of the retailing industry. Case study is used to show that No 1 Retailer, WalMart's success lies in providing two core services supported by its core competence and three terminal services centering around its core services. Theauthor uses comparison analysis to make a comparison between domestic and foreign retailers, thus finding out that the foundamental reason for the big gap between them consists in domestic retailers' failing to build up their core competence. At last, the author uses Michael Borter's Strategy Orientation to come up with the development strategy and competitive tactics of the domestic retailers. Thus , the article's body is composed of three parts: the review of the literature of retailers' core competence, the analysis of WM's core competence and the competitive strategy of domestic retailers.By using the methods mentioned above ,the author finds out that WM's core competence lies in its efficient supply chain management system(SCMS), consisting of four capabilities: close follow of consumers' needs, intimate cooperation with suppliers, efficient management of the logistics, and efficient management of the information .WM's success lies not only in its core competence, but also in providing two core services through three terminal channels—lowest prices every day and brand goods at normal prices, and various kinds of peripheral services. On the other hand, the author also finds out that it is such a core competence that China's domestic retailers lack in .So the author makes a critical application of the WM's success model to building up the core competence of domestic retailers and gets some results. On this basis and by using Mickael Borter's strategy orientation method, the author put forwards the development strategy for domestic retailers to build up their core competence, i.e, targeting the customers' value, trading off business activities, integrating the systematic competences and creating sustainable advantages. Targeting the customers' value means that the retailer needs to have a clear idea of which customers it serves, what difficulties it solves and what value it provides for its customers. Trading off business activities means if the retailer wants to realize its service goals, it has to take those activities vital to its success, and to give up doing those irrelevant activities. Integrating the systematic competences concludes following the customers' preferences closely, building strategic unions with suppliers, improving the ability to manage the logistics system and improving the ability to manage the relevant information. Creating sustainable advantagesemphasizes the importance of details. Additionally, the author comes up with competitive tactics such as developing their own brands, cultivating excellent corporate culture, taking a rational strategic expansion, establishing an efficient public relations system and setting a good corporate image and so on..