Walmart
type competitors cause a "down economy" for companies that rely on
low hanging fruit for their revenue source. They blame low-price foes for eroding the
value that their higher priced products offer.
Not all low-price competitors are as prolific as Walmart, but this type
of competitor inspires companies who practice solid
marketing principles
to thrive while others fall by the wayside.
Walmart’s Low-Price
Branding Strategy Yields High Gross Profits
As
the category market share leader Walmart’s high sales volume and precisely negotiated
producer prices enable Walmart to generate a huge gross profit that contributes
to fixed costs and net earnings.
Walmart
earns average marks for customer experience.
Instead, it derives its competitive advantage from logistics and IT
competencies that track each item from receipt at the right warehouse or outlet
at the right time through in-store or online sale. Walmart shares sales information with vendors
who rely on Walmart as a key channel
for their products.
What Do You Do if You Have a Walmart Type Competitor?
Most Companies Don’t Have Resources to Implement a Walmart-Type
Strategy
How
do you define and measure customer experience [CX] at your company? Do you consider “total customer satisfaction”
at each touchpoint and a willingness by customers and partners to “refer your
business” if the situation were to occur?
What
competencies have employees, customers and partners said that you can leverage
for competitive advantage?
How
do you continuously improve productivity and reduce variable and fixed
costs? Being the low-cost producer doesn’t
need to translate to a low-price strategy.
Are
you innovative in business processes and products or services?
Walmart
promotes itself as “the place to save money and live better”. Their target market includes buyers who value
price more than the cost of ownership or lifetime relationship with their
vendor.
- What is your brand identity i.e. what buyers expect when they do business with your company?
- Should your business build lifetime relationships with customers and partners?
- How do you define the personas that comprise each of your target markets?
Please
let me know if these ideas provide you with thoughts for designing a strategy that
differentiates your business from a low-price rival.
