Mart had, according to the Case 2003. Table 1, Walmart Inc tangible and intangible resources. Tangible Intangible Physical (Stores, 130 geographical countries, plant&equipment, Inventory) Innovation (IT systems, Ups scanners, Point to Point systems) Financial (capital, revenue, Cash, Equity, trade receivables) Human Capital (Trainings, headhunting experienced, intelligent people, natured relationships) Technological (RFID, IT systems) Organisational Culture (open-door policies, servant leadership) Organisational (structure, planning) Reputational Service to the Customer Servant Leadership
15014634 Adopted from Walmart case 2003 For Wal-Mart to successfully create a sustainable competitive advantage , RBV bases on two underlying assumptions, one is “a firm’s resources and capabilities must be heterogenous” in nature and the other is, “these resources must be imperfectly mobile across firms”. (Barney, 1991; Peteraf, 1993). Barney (1991) defines competitive advantage as a “value creating strategy that is not being implemented by any other competitors”. Lippman and Rumelt (1984) and Hirshleifer (1982) support and adds on this view by stating that competitive advantage is sustained only if it continues to exists after efforts to duplicate that advantage have ceased. This creates an environment that then allows for a firm to benefit from economies of scale and drive cost down hence become a cost leader. It also creates an environment that allows a firm to deliver products that exceed those of competing products through differentiation. When competitors are unable to duplicate these benefits of its strategy, it becomes a sustainable competitive advantage. (SCA) (Porter, 2004). The RBV model is applauded by Peteraf (1993) for its inside out view focus and its ability to uncover potential sources of competitive advantage (Newbert, 2008). However, he, develops the view asserting that full potential value is realised when resources and capabilities are combined into unique bundle of resources’, “competencies” which drive its strategy and performance. According to Prahalad and Hamel (1990), a company’s competitiveness derives from its core competencies. A core competence is a value chain activity evolves into a major competitive advantage, then it is called a distinctive competence. (David 2009). They make the roots of competitiveness and are the collective learning in the organization, coordination of diverse skills and the integration of multiple streams of technology”. (Prahalad and Hamel, 1990) Much of Wal-Mart’s Inc competencies were built around its human resources, and management who were given responsibility and were constantly supervised and compensated according to profits and performance which then motivated them to operate like their own. Management operated in a non-traditional manner, friendly and had an open-door policy and identified employees associates which created a frugal organisational culture. Management was supervised/monitored by the Regional Vice Presidents who flew around the different regions every week and reported back at the head-office before holding strategic meetings (W4, 12, 14, 15). This allowed for control and flexibility hence had a good integration .
15014634 (Teece and Pisano, 1994; Prahalad and Hamel 1990). Wal-Mart facilitated for learning as it
You've reached the end of your free preview.
Want to read all 8 pages?
- Summer '16
- sustainable competitive advantage