For the Porterâ€™s Diamond of National Advantage I chose to look at a major company that is in the United States and has really become a major international player in their industry. That company is none other than Walmart. Walmart because of it nature faces a large amount of competition anywhere that it goes and always faces some sort of backlash as well. Most of this is due to the fact that they typically drive out the smaller businesses that were typically in that area.
Something that Walmart brings to the table is technology and innovation and this is a direct reflection of the factor conditions on Porters Diamond. Because they are on such a large scale Walmart has essentially untapped potential and the ability to acquire anything that they need in order to succeed. On top of this they can carry losses for a specific amount of time just to be able to experience the success that other business would not be able to.
The demand conditions are something that Walmart is able to tap into quite readily and easily. While they do experience a great amount of competition, it is more likely than not that Walmart is going to be able to provide products at a much cheaper price than the competitors that are in that area. (Govindarajan & Gupta, 2002) Essentially every country that Walmart operates in they have major competitors. In France they have Carrefour SA, in Germany it is Metro AG, in the United Kingdom there is Tesco, Loblaw Companies in Canada, and Ahold in the Netherlands. (Soni, 2015) However even with this competition there is a steady demand for a company like Walmart. Someone that can offer the wide range of products at lower than competitor rates.
With related and supporting industries Walmart has a solid foot print as they have become established in a number of different countries. (Statista, 2016) Because they have done so they are able to be that strong global competitor. They have a number of different distribution centers that are located throughout the world and they even make a number of their own products. (Govindarajan & Gupta, 2002) When you combine these two aspects they turn into a very powerful global player and can essentially name their own price when it comes to a logistics stand point.
Finally you have the firm strategy, structure, and rivalry. As previously stated Walmart is going to have that rivalry and it does not matter what country they are operating in. This company operates 6.189 stores on the global market and another 4,987 in the United States. (Soni, 2015) They are used to that competition and as a direct result of this they know how to adjust the structure and strategy to combat these issues. Cultural differences are something that is learned over time and with Walmart being as big as they are, they are able to study the competition and how they operate long before they attempt to move into that country.
Govindarajan, V., & Gupta, A. (2002, June 19). Taking Wal-Mart Global: Lessons From Retailing’s Giant. Retrieved July 12, 2016, from http://www.strategy-business.com/article/13866?gko=e19cb
Porter’s Diamond of National Advantage. (n.d.). Retrieved from http://www.quickmba.com/strategy/global/diamond/
Soni, P. (2015, February 18). Welcome to Market Realist. Retrieved from http://marketrealist.com/2015/02/walmart-looking-growth-international-markets/
Total number of stores of Walmart International 2016, by country | Statistic. (n.d.). Retrieved from http://www.statista.com/statistics/269424/total-number-of-stores-of-walmart-international-by-country/