blog 4

Wal-Mart has been known for producing things exactly what consumers want to buy and offering a wide range of goods at rock-bottom prices. But little do they realize that they are putting people out of work and lowering their standards of living as the workers are on the losing end unlike the consumers. Recently, Wal-Mart has been trying to open a store in the New York city. However, the New Yorkers are not really happy about it and are “least supportive of the firm and its practices”.
According to Barney, “In order for resources and capabilities to be strengths, they must enable a firm to exploit environmental opportunities or neutralize environmental threats”. Wal-Mart has been successfully exploiting environmental conditions in United States and profitably tops the third position in the world of retailing. After creating a name of its own in U.S, now Wal-Mart is using its value base in China as it plans to penetrate furthermore with 56 stores already in hand. Even though Wal-Mart has a big value base, it is easy to imitate by its competitors. Competitors would not face any Causal ambiguity as Wal-Mart is a retailing firm and is easy to spot out the resources and capabilities controlled and owned by a firm. One of the resources that they boast on is their employees. They offer them a very competitive package of benefits through which they attract people to work for their company. Similarly, its competitors can attract same number of employees and run a similar kind of store without facing any cost disadvantages. The competing firms could directly duplicate the firm’s resources by hiring the same employees and attracting them with a better pay structure. Furthermore, substitution is also possible in this case as the competitors of Wal-Mart can hire new employees equally competent as Wal-Mart employees and retain them with a lower pay through which they would have an advantage over Wal-Mart. Wal-Mart even has a competitive parity in its firm as their resources and capabilities are very valuable but not rare as anyone can own it in the same industry.
The article also states that “WalMart has no stores in the New York City due to resistance from Coalition from labor, Civil rights and community groups”. This implies that WalMart had been facing barriers to entry as mentioned in Porter’s article. However, these barriers could be surmounted in future as the article states that “people can both dislike WalMart yet shop there”. Even though the consumers and the society think that WalMart is somehow unfair to people, they will still shop from there because of the value created by WalMart in the past.