Walmart has pushed the industry boundaries so far with its online hub for distributors and the enhancement of communication that the company’s legacy business model is bound to withstand a surge of new entrants. Because of the high competitive barriers that Walmart’s current IT framework sets for the rest of the organizations in the global market, the company makes the threat of new entrants practically indiscernible. The application of innovative IT technology has enabled Walmart to maintain the threat of new competitors relatively low. The expansion of the firm’s services to new geographic locations has also affected the BPB largely, with the rates of loyalty among buyers growing constantly. This allows maintaining the net present value high, which is crucial given the uncertainty levels (Jetha, 2018b). The pricing strategy that the company uses reduces the opportunities for customers to find a similar product of the same price and quality extensively. The situation has not changed even after Walmart’s transfer of its business processes in the digital realm. Walmart has set the bar for product prices incredibly low, which reduces the bargaining power of buyers (BPB) to the lowest level possible and setting competitive barriers for other organizations very high. When considering the factors that make Walmart exceptional and allow it to stand out among similar organizations, one needs to address the pricing strategy of the company. Learn More Nature of Customer Bargaining Power As a result, Walmart’s online supply chain is growing increasingly fast. Thus, the company can control the expenses that it takes to attract retailers and encourage them to cooperate with Walmart. As a result, the BPS rates remain moderate or low for Walmart in the online market (Walmart, Inc., 2018). While the specified approach has reduced the number of suppliers, the quality of products has risen significantly (Boyle, 2018). Furthermore, the identified framework has helped Walmart to transcend cultures and reach out to culturally diverse audiences due to the focus on their skills and potential instead of their geographic location. Thus, Walmart has seamlessly transferred its relationships with its key suppliers to the digital market.
The technology’s DNA creates opportunities for increasing the visibility of products and enhancing brand reach. Specifically, the firm has launched recently an online supplier center, inviting companies to sell their merchandise on Marketplace (Moloney, 2017).
The reduction in the BPS levels can also be attributed to Walmart’s smart approach toward attracting new suppliers. In the digital market setting, the number of suppliers has grown significantly over the past few years, which makes their bargaining power (BPS) quite low for Walmart. Furthermore, Walmart may eventually transfer to the culture fit concept as a legacy model. Since the Walmart Labs technology is unique and produces results that are beyond impressive, Walmart can enjoy a crucial competitive advantage in the online market even with the introduction of new competitors into the picture. For instance, the transfer from the traditional brick-and-mortar stores to electronic ones has made it possible to open new opportunities for strategic planning. The application of Walmart Labs blurs the industry boundaries by allowing the company to understand its retailers and adjust to their needs.Īs a result, the legacy business models used by Walmart are updated regularly to ensure proper market positioning of the firm’s services. The use of the Walmart Labs GitHub technology opens opportunities for storing massive amounts of data (Petro, 2018). Since Walmart currently holds the title of the most popular retail company, even in the digital market, the threat of new entrants can be deemed as relatively low. Because of the irreversibility of the IT architecture system and Walmart’s current focus on the one-growth target, the integration of a profound analysis of customers’ needs and the available data management frameworks to ensure that the firm’s architectural decisions are sustainable.