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Nov 24, 2024

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Running head: STRATEGY FORMULATION 1 In looking at Walmart’s net sales worldwide , it is noticed that it increased steadily throughout all of the years from 2006 to 2022 with the exception of in 2016 where it experienced a decrease when compared to 2015 (Ozbun,2022). Despite the pandemic, Walmart experienced steady revenue growths and was able to cop revenues for the period 2020-2021 and thus far, that are higher than that of Amazon and many of its other competitors. In 2020, Walmart’s revenue reached $524 billion (“Walmart Inc 2020 Annual Report,” 2020) while Amazon reported revenue of $386 billion of that same fiscal year (Kohan, 2020). In 2021, its sales were able to reach $559.151 billion, which was more than Amazon, Costco and its other two next in line rivals when summed up together. Walmart hired twice times the people than Amazon hired and become the owner of approximately 3 times more than what its top three rivals own (Jurevicius, 2022). Walmart’s success in copping such revenue figures and growing exponentially as a retail giant comes from its constant delivery of low prices-hence it is known for everyday low prices, which continues to appeal to many flocks of customers and enable the company to remain competitive. Walmart always finds a way to keep its prices of branded items at relatively low (or the lowest) through its cost-cutting mechanism while other competitors are focusing on their profits being a priority (Lalljee, 2021). Walmart use its huge buying power to attain many highly demanded and purchased products at a lower price. It continues to invest heavily in technology, which makes the company benefit from economies of scale, ensures smooth customer experience, as well as efficiency in logistics and increased efficiency throughout the stores. Walmart capitalizes on its bargaining power and also maintains a low operating cost (through the use of an automated supply chain management system, basic stores design, robots in warehouses, executives using budget options to travel, etc) which help in keeping prices low to remain competitive (Butterworth, n.d.).

2 Tesla is also successful in its use of the differentiation strategy as one of its means to remain competitive in the market. In summary, Tesla’s aim in using the differentiation strategy as an automaker is to develop and manufacture car models that would set it apart from its competitors. As such, Tesla started off by building for instance roadster and the premium model S car, which were successfully able to gain popularity. Subsequent to this, Tesla began to capitalize on its low production costs as well as its reputation as a means of focusing on building cheaper cars (model 3 and model Y) that can be sold cheaper. Tesla, although not the only electric car manufacturer, is also now into the business of solar and energy storage. As Morris (2021) rightfully stated “As every EV owner knows, driving on electrons has a number of perks that fossil cars can’t offer—leaping instant acceleration, one- pedal driving, and the convenience of charging at home and never visiting a gas station (and seldom visiting a repair shop)” (para.1). However, Tesla vehicles offers all of the above and even have more features that brings luxury and makes driving the vehicles fun. Tesla with the direct selling approach enables customers to have better purchasing experience. Tesla’s showroom does not have the potential to create conflict of interest as the customers are dealt with only by sales and services employees hired by Tesla (Pressman, 2021). It has its own service centres, and at times delivers services remotely to customers and even has its own supercharger network. All of these and more make Tesla different from the traditional automakers and its other competitors. In spite of competitors such as Ford, General Motors, Nissan, Nio, Honda, etc, Tesla still remains as the most recognized and it cops the top spot when it comes to luxury in electric vehicles (“Who are Tesla’s (TSLA) Main Competitors?”, 2022). In other words, although Tesla may not necessarily be the dominant player in the automotive market (because as the demand for electric vehicles continues to increase, more and more automakers are manufacturing other unique non-electric vehicles that can help appease the taste of customers that are not keen on electric vehicles, in an effort to step up

3 their sales game and remain competitive), it remains the dominant player when speaking of the luxury car market.

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