Walmart recent acquisition of MoosejawWalmart is an American m.docx

Walmart recent acquisition of Moosejaw
Walmart is an American multinational retail corporation that
operates as chain of hypermarkets, discount department stores.
· Moosejaw a leading online outdoor retailer.
Q/ why they picked Moosejaw and what is special about this
company (Leading online active outdoor retailer that sells
apparel and gear for climbing, hiking, camping, snow sports,
yoga, swimming and biking. and what will it add to a company
like Walmart.
Give small background of both companies, CEO’s, and their
market size.
https://news.walmart.com/2017/02/15/walmart-announces-the-
acquisition-of-moosejaw-a-leading-online-outdoor-retailer
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Parties and Eras
Evolution of political parties
Please explain how liberal values such as property rights and
minimal government influenced the historical debates and
conflicts between the Federalists and Anti-federalists, the Civil
War Era Republicans and Democrats, and the current
Republicans and Democrats.
Parties and Eras
Liberalism is a political doctrine that looks at the enhancement
and protection of personal freedom as the central problem in
politics. This doctrine of though emerged in the 19th century
and has grown through time since then. It has had a lot of
impact on political and social occurrences through time.
Liberalism has also affected the political standing of the
republicans and democrats from the civil war era to the
contemporary era. During the civil war era, political party
choices were made based on the federalist and the anti-
federalist beliefs. The republicans were the supporters of the
big government while the Democrats were the supporters of
independent state governments (Slothuus& De Vreese, 2010).
Liberal views impacted the conflict between the federalists and

the anti-federalists. While the federalists supported the
development of a strong federal government, the anti-federalists
believed that each state should maintain its independence and
have the chance to control their own constitution. The anti-
liberalists were highly influenced by liberal views. They
believed that they had the right to individuality and
independence so that they can be able to control their own
economies.
Unlike in the civil war era, political part views today are mainly
influenced by social issues such as elitism and populism. People
choose political parties in the contemporary America based on
the party’s support on issues affecting the people such as
class(Slothuus& De Vreese, 2010. This shift has mainly been
caused by the evolution of liberalism. Liberalism allows people
to care for people as individuals and apply rationalism is the
creation and support for various policies. Liberalism has
allowed for the independence of beliefs and enabled the
application of rationality rather than just rigid principles when
making political decisions. Therefore, this has somewhat caused
a shift in the principles and beliefs of the democratic and
republican parties.
McGraw-Hill/Irwin ©2009 The
McGraw-Hill Companies, All Rights Reserved
Chapter 5: The Five Generic Competitive Strategies
Screen graphics created by:
Jana F. Kuzmicki, Ph.D.
Troy University

*
“Competitive strategy is about being different. It means
deliberately choosing to perform activities differently or to
perform different activities than rivals to deliver a unique mix
of value.”
Michael Porter
*
“Winners in business play
rough and don’t apologize for
it. The nicest part of playing hardball is watching your
competitors squirm.”
George Stalk Jr. and Rob Lachenauer
*
1-*
Chapter Learning Objectives

Gain command of how each of the five generic competitive
strategies lead to competitive advantage and deliver superior
value to customers.
Learn why some of the five generic strategies work better in
certain kinds of industry and competitive conditions than in
others.
Learn the major avenues for achieving a competitive advantage
based on lower costs.
Learn the major avenues for developing a competitive advantage
based on differentiating a company’s product or service offering
from the offerings of rivals in ways that better satisfy buyer
needs and preferences.
*
1-*
Chapter RoadmapThe Five Competitive StrategiesLow-Cost
Provider StrategiesBroad Differentiation StrategiesBest-Cost
Provider StrategiesFocused (or Market Niche) StrategiesThe
Contrasting Features of the Five Generic Competitive
Strategies: A Summary
*
1-*
Strategy and Competitive AdvantageCompetitive advantage
exists when a firm’s strategy gives it an edge inAttracting
customers andDefending against competitive forces

Convince customers firm’s product / service offers superior
valueA good product at a low priceA superior product worth
paying more forA best-value product
Key to Gaining a Competitive Advantage
1-*
What Is Competitive Strategy?Deals exclusively with a
company’s business plans
to compete successfullySpecific efforts to please
customersOffensive and defensive moves
to counter maneuvers of rivalsResponses to prevailing market
conditionsInitiatives to strengthen its market positionNarrower
in scope than business strategy
1-*
Figure 5.1: The Five Generic Competitive Strategies
*

1-*
Low-Cost Provider StrategiesMake achievement of meaningful
lower costs than rivals the theme
of firm’s strategyInclude features and services in product
offering that buyers consider essentialFind approaches to
achieve a cost advantage in ways difficult for rivals to copy or
match
Keys to Success
Low-cost leadership means low overall costs, not just low
manufacturing or production costs!
*
1-*
Option 1: Use lower-cost edge to
under-price competitors and attract
price-sensitive buyers in enough
numbers to increase total profits
Option 2: Maintain present price, be
content with present market share,

and use lower-cost edge to earn a
higher profit margin on each unit sold,
thereby increasing total profits
Translating a Low-Cost Advantage into Higher Profits: Two
Options
*
1-*
Approaches to Securing
a Cost Advantage
Do a better job than rivals of
performing value chain activities
efficiently and cost effectively
Revamp value chain to bypass
cost-producing activities that add little value from the buyer’s
perspective
Approach 1
Approach 2

Control costs!
By-pass
costs!
1-*
Approach 1: Controlling the Cost DriversCapture scale
economies; avoid scale diseconomiesCapture learning and
experience curve effectsControl percentage of capacity
utilizationPursue efforts to boost sales and spread costs such as

R&D and advertising over more unitsImprove supply chain
efficiencySubstitute use of low-cost for
high-cost raw materialsUse online systems and sophisticated
software to achieve operating efficienciesAdopt labor-saving
operating methodsUse bargaining power to gain concessions
from suppliersCompare vertical integration vs. outsourcing
1-*
Use direct-to-end-user
sales/marketing methodsMake greater use of online
technology applicationsStreamline operations by eliminating
low-value-added or unnecessary work stepsRelocate facilities
closer to suppliers or customersOffer basic, no-frills
product/serviceOffer a limited product/service
Approach 2: Revamping the Value Chain
1-*
Wal-Mart’s Approach to
Managing Its Value Chain
Institute extensive information sharing with vendors via online

systems
Pursue global procurement of some items and centralize most
purchasing activities
Invest in state-of-the-art automation at its distribution centers
Strive to optimize the product mix and achieve greater sales
turnover
Install security systems and store operating procedures that
lower shrinkage rates
Negotiate preferred real estate rental and leasing rates with real
estate developers and owners of its store sites
Manage and compensate its workforce in a manner to yield
lower labor costs
*
1-*
Nucor Corporation’s
Low-Cost Provider Strategy Key elements of Nucor’s
strategyUse of electric arc furnace technology allows for
lower investment costs for facilities and equipment and
eliminates many expensive steps in making steel products from
scratch Use incentive compensation to achieve high productivity
and low labor costs per ton producedLocate plants close to
customers to keep shipping costs downCost advantages and
bottom-line resultsLower capital investment and operating
costsAbility to charge lower prices than traditional steel
companies using make-it-from scratch technologyEarned
attractive profits for shareholders since 1966

*
1-*
Key Characteristics of Southwest Airlines’ Low-Cost
Provider Strategy Mastery of fast turnarounds at gates (25
minutes vs. 45 minutes for rivals) allowsPlanes to fly more
hours per dayMore flights to be scheduled per day with fewer
aircraftMore revenue generated per plane on average than
rivalsElimination of several services
results in cost savingsIn-flight mealsAssigned seatingBaggage
transfer to connecting airlinesFirst-class seating and
serviceFast, user-friendly online reservation systemFacilitates
e-ticketingReduces staffing requirements at telephone
reservation centers and airport counters
*
1-*
Keys to Success in Achieving
Low-Cost LeadershipScrutinize each cost-creating activity,
identifying cost driversUse knowledge about cost drivers to
manage
costs of each activity down year after yearFind ways to
restructure value chain to eliminate

nonessential work steps and low-value activitiesWork diligently
to create cost-conscious corporate culturesFeature broad
employee participation in continuous cost-improvement efforts
and limited perks for executivesStrive to operate with
exceptionally small corporate staffs Aggressively pursue
investments in resources and capabilities that promise to drive
costs out of the business
1-*
Cost conscious corporate cultureEmployee participation in cost-
control effortsOngoing efforts to benchmark costsIntensive
scrutiny of budget requestsStrong commitment to continuous
cost improvement
Characteristics of a Low-Cost Provider
Successful low-cost producers champion frugality but wisely
and aggressively invest in cost-saving improvements !
1-*
Price competition is vigorousProduct is standardized or readily
available
from many suppliersThere are few ways to achieve
differentiation that have value to buyersMost buyers use
product in same waysBuyers incur low switching costs Buyers
are large and have

significant bargaining powerIndustry newcomers use
introductory low prices to attract
buyers and build customer base
When Does a Low-Cost
Strategy Work Best?
1-*
Pitfalls of Low-Cost StrategiesBeing overly aggressive in
cutting priceLow cost methods are easily
imitated by rivalsBecoming too fixated on
reducing costs and ignoringBuyer interest in additional
featuresDeclining buyer sensitivity to priceChanges in how the
product is usedTechnological breakthroughs open up cost
reductions for rivals
1-*
Test Your Knowledge
Striving to be the industry’s low-cost provider and achieving
lower costs than rivals entails
A. doing a better job than rivals of performing value chain

activities more cost-effectively.
B. having a smaller labor force than rivals, paying lower wages
than rivals, locating all facilities in countries where labor costs
are low, and outsourcing many value chain activities to
suppliers with world-class technological capabilities.
C. revamping the firm’s overall value chain to eliminate or
bypass cost-producing activities that produce little value added
insofar as customers are concerned.
D. adopting activity-based costing, utilizing more best
practices than rivals, and having a narrower product line than
rivals.
E. Both A and C.
Answer: E
1-*
Differentiation Strategies
Incorporate differentiating features that cause buyers to prefer
firm’s product or service over brands of rivals
Find ways to differentiate that create
value for buyers and are not easily
matched or cheaply copied by rivalsKeeping the cost of
achieving differentiation below the higher price that can be
charged
Objective
Keys to Success
*

1-*
Benefits of Successful Differentiation
A product / service with unique, appealing attributes allows a
firm toCommand a premium price and/orIncrease unit sales
and/orBuild brand loyalty
= Competitive Advantage

1-*
Unique taste – Dr. PepperMultiple features – Microsoft Vista
and Office, iPhoneWide selection and one-stop shopping –
Home Depot, Amazon.comSuperior service – FedExSpare parts
availability – CaterpillarEngineering design and performance –
Mercedes, BMWPrestige and distinctiveness – RolexProduct
reliability – Johnson & JohnsonQuality manufacture – Karastan,
Michelin, ToyotaTechnological leadership – 3M
CorporationTop-of-line image – Ralph Lauren and Starbucks
Types of Differentiation Themes
1-*
Sustaining Differentiation:
Keys to Competitive AdvantageMost appealing approaches to
differentiation are thoseHardest for rivals to match or
imitateBuyers will find most appealingBest choices to gain a
longer-lasting, more profitable competitive edge New product
innovationTechnical superiorityProduct quality and
reliabilityComprehensive customer serviceUnique competitive
capabilities
1-*
Where to Find Differentiation
Opportunities in the Value ChainPurchasing and procurement

activitiesProduct R&D and product design activitiesProduction
process / technology-related activitiesManufacturing /
production activitiesDistribution-related activitiesMarketing,
sales, and customer service activities
Activities,
Costs, &
Margins of
Forward
Channel Allies
Internally
Performed
Activities,
Costs, &
Margins
Activities,
Costs, &
Margins of
Suppliers
Buyer/User
Value
Chains
1-*
How to Achieve a
Differentiation-Based Advantage
Incorporate features that raise
performance a buyer gets out of the product
Incorporate features that enhance buyer satisfaction in non-

economic or intangible ways
Outcompete rivals via superior capabilities
Incorporate product features/attributes that
lower buyer’s overall costs of using product
Approach 1
Approach 2
Approach 3
Approach 4
1-*
Test Your Knowledge
Which of the following is not one of the four basic routes to
achieving a differentiation-based competitive advantage?
A. Appealing to high-income buyers who are willing and able
to pay a premium price for a high-performing, multi-featured
product
B. Incorporating features that raise product performance
C. Incorporating product attributes and user features that lower
the buyer’s overall costs of using the company’s product
D. Delivering value to customers via competencies and
competitive capabilities that rivals don’t have or can’t afford to
match
E. Incorporating features that enhance buyer satisfaction in
intangible or non-economic ways
Answer: A
1-*

Importance of Perceived ValueBuyers seldom pay for
value that is not perceivedPrice premium of a
differentiation strategy reflectsValue actually delivered to the
buyer
andValue perceived by the buyerActual and perceived value
can differ when buyers are unable to assess their experience
with a product
1-*
1-*
Signaling Value as
Well as Delivering ValueIncomplete knowledge of buyers
causes them to
judge value based on such signals asPriceAttractive
packagingExtensive ad campaignsAd content and imageSeller
facilities or professionalism and
personality of employeesHaving a list of prestigious
customersSignals of value may be as important as
actual value whenNature of differentiation is hard to

quantifyBuyers are making first-time purchasesRepurchase is
infrequentBuyers are unsophisticated
1-*
When Does a Differentiation
Strategy Work Best?There are many ways to differentiate a
product that have value and please customersBuyer needs and
uses are diverseFew rivals are following a similar
differentiation approachTechnological change and
product innovation are fast-paced
1-*
Pitfalls of Differentiation StrategiesAppealing product
features are easily copied by rivalsBuyers see little value in
unique attributes of productOverspending on efforts to
differentiate the product offering, thus eroding
profitabilityOver-differentiating such that product features
exceed buyers’ needsCharging a price premium
buyers perceive is too highNot striving to open up meaningful
gaps in quality, service, or performance

features vis-à-vis rivals’ products
1-*
For Discussion: Your Opinion
A low-cost provider strategy can defeat a differentiation
strategy when buyers are satisfied with a basic product and
don’t think “extra” attributes are worth a higher price. True or
false? Explain.
True. A company employing a differentiation strategy may
differentiate on the basis of some attribute that does not deliver
adequate value to buyers, i.e. such as lowering a buyer’s cost to
use the product or enhancing a buyer’s well being. If potential
buyers look at a differentiated product offering and conclude
“so what?”, buyers are indicating they are satisfied with a basic
product.
1-*
Best-Cost Provider StrategiesCombine a strategic emphasis on
low-cost with a strategic emphasis on differentiationMake an
upscale product at a lower costGive customers more value for
the money
Deliver superior value by meeting or exceeding buyer
expectations on product attributes and beating their price
expectationsBe the low-cost provider of a product with good-to-
excellent product attributes, then use cost advantage to
underprice comparable brands
Objectives

1-*
Competitive Strength of a
Best-Cost Provider StrategyCompetitive advantage is based
on the capability to include upscale attributes at a lower cost
than rivals’ comparable productsTo achieve competitive
advantage,
a company must be able toIncorporate attractive features
at a lower cost than rivalsManufacture a good-to-excellent
quality
product at a lower cost than rivalsDevelop a product that
delivers good-to-excellent performance at a lower cost than
rivalsProvide attractive customer service at a lower cost than
rivals
*
1-*
When Is a Best-Cost
Provider Strategy Appealing?When buyer diversity makes
product differentiation the norm When many buyers are also
sensitive to price and value

1-*
Key Characteristics of Toyota’s
Best-Cost Provider Strategy for the Lexus
Design an array of high-performance characteristics and upscale
features into Lexus models to make them comparable in
performance/luxury to other high-end models, i.e. Mercedes,
BMW
Transfer its capabilities in making high-quality Toyota models
at low cost to making premium-quality Lexus models at costs
below other luxury-car makers
Use its relatively lower manufacturing costs to
underprice comparable Mercedes and BMW models
Establish a new network of Lexus dealers, separate from Toyota
dealers, dedicated to providing a level of personalized customer
service unmatched in the industry
*
1-*
Risk of a Best-Cost Provider StrategyA best-cost provider
may get squeezed between strategies of firms using low-cost
and differentiation strategiesLow-cost leaders may be able to

siphon
customers away with a lower priceHigh-end differentiators may
be able to steal customers away
with better product attributes
*
1-*
Test Your Knowledge
Which of the following are distinguishing features of a best-cost
provider strategy (based on the comparisons of the five generic
competitive strategies shown in Figure 5.1)?
A. The strategic target is price-conscious buyers
B. A marketing emphasis on charging a slightly higher price
than rival brands having comparable features and attributes
C. A product line that stresses wide selection, many product
variations, and emphasis on differentiating features
D. A competitive advantage based on more value for the money
E. Using constant product innovation, excellent R&D skills,
and periodic technological breakthroughs to sustain the strategy
Answer: D
1-*
Focus / Niche StrategiesInvolve concentrated attention on a
narrow piece of the total market

Serve niche buyers better than rivals
Choose a market niche where buyers
have distinctive preferences, special
requirements, or unique needsDevelop unique capabilities to
serve needs of target buyer segment
Objective
Keys to Success
1-*
Geographic uniquenessSpecialized requirements in
using product/serviceSpecial product attributes
appealing only to niche buyers
Approaches to Defining a Market Niche
*
1-*
Examples of Focus StrategiesCommunity CoffeeSpecialty
coffee retailerAnimal Planet and History Channel Special
interest Cable TV programsPorsche Sports carsBandag
Specialist in truck tire recappingCGA Inc. Specialty insurance
providerMatch.comOnline dating service

1-*
Focus / Niche Strategies
and Competitive Advantage
Achieve lower costs than rivals in
serving a well-defined buyer segment
Focused low-cost strategy
Offer a product appealing to unique
preferences of a well-defined buyer segment
Focused differentiation strategy
Approach 1
Approach 2

1-*
What Makes a Niche
Attractive for Focusing?Big enough to be profitable and offers
good growth potentialNot crucial to success of industry
leadersCostly or difficult for multi-segment
competitors to meet specialized
needs of niche membersFocuser has resources and capabilities
to effectively serve an attractive nicheFew other rivals are
specializing in same nicheFocuser can defend against
challengers via superior ability to serve niche members
1-*
Risks of a Focus StrategyCompetitors with broad product
lines having wide appeal find effective ways to match
a focuser’s capabilities in serving nicheNiche buyers’
preferences shift
towards product attributes desired
by majority of buyers – niche

becomes part of overall marketSegment becomes so attractive it
becomes crowded with rivals, causing segment profits to be
splintered
1-*
For Discussion: Your Opinion
Which of the five generic competitive strategies do you think
the following companies are employing:The Saturn division of
General MotorsAbercrombie & FitchAmazon.comAvon Products
Saturn division of General Motors – Focused low-cost strategy
Abercrombie & Fitch – Focused differentiation strategy
Amazon.com – Broad differentiation strategy
Avon Products – Broad low-cost strategy
1-*
Deciding Which Generic
Competitive Strategy to UseEach positions a company
differently in its market and competitive environmentEach
establishes a central theme for how a company will endeavor to
outcompete rivalsEach creates some boundaries for
maneuvering as market circumstances unfoldEach points to
different ways of experimenting with the basics of the
strategyEach entails differences in product line, production
emphasis, marketing emphasis, and means to sustain the
strategy
The big risk – Mixing and matching pieces of the generic

strategies to create a mixed bag or “stuck in the middle”
strategy! This rarely produces a sustainable competitive
advantage or a distinctive competitive position !
*
1-*
Table 5.1: Distinguishing Features of the Five Generic
Competitive Strategies
*
This is a very good opportunity to exam how well you are able
to apply what you have learned from
the class to the real events in the world. Every student is
required to write a brief analysis, about 2-3 pages long, double
space, font 12, times new roman, and 1” margins, discussing an
ongoing event concerning issues of strategic management that
have been taught in class. You are required to use the concepts
and theories learned from the class to analyze a current event in
the business world. You are also required to make a short
presentation to the class and answer questions. The sources of
information in the current event presentation must be included.
The presentation is not merely reporting an ongoing event; it
should have your own analysis and points.

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