The strategies used by Wal-Mart, Bloomingdales’


The position of a company in the industry in comparison to the industry’s average performance determines whether a company is relatively profitable or not. For profitability hence sustainability in the market, a company should have a competitive advantage over its competitors. According to Michael Porter in his book Competitive Advantage, a firm can use three strategies to gain competitiveness in the market; differentiation, cost leadership and focus. Differentiation is where a firm looks to be unique by pointing out one or two attributes that customers deem important, maximizing on them so that they provide the best quality in the industry. Cost leadership is whereby a company uses low product cost to lure customers.  These businesses achieve this by reducing their production costs. Focus is a strategy that involves a firm selecting a segment, identifying the niche and responding to the particular needs of the clientele by coming up with tailor-made solutions that suit thatsegment. The solution could be in the form of low-costing or differentiation(Safari). In this paper, I am going to describe the strategies of Wal-Mart, Bloomingdales’ and Target using Porter’s competitive strategies.

Founded in 1962, Wal-Mart is currently the largest retail store worldwide. With giant retail competitors such as Target and Best Buy, Wal-Mart has managed to be competitive and profitable by applying the cost leadership strategy. Its slogan, “Save Money. Live Better.” is true to its word as it provides a wide range of products at prices cheaper than its competition. During a recession, everybody wants to save as much as they can and as a result resolve to cheaper goods that are provided by Wal-Mart, giving the business a competitive advantage, profit, and sustainability. Wal-mart also employs differentiation as a strategy by providing tailor-made goods to fulfill customers’ unique wants and goods. This boosts loyalty for customers and in turn sales and profit(Nguyen).

As a luxury chain store in the fashion industry, Bloomingdales is unlike Wal-Mart in that it deals with pricey designer products. Founded in 1861, Bloomingdales, whose slogan is “A Store like no Other”, looks to attract and satisfy the market by constantly coming up with ideas and designs that will suit a variety of people. Thus, everybody who walks into the store will most likely find something that suits them, be it a shirt or a handbag, and in excellent quality. This strategy, differentiation, has given the firm, whose headquarters are in the Big Apple, a competitive edge over other fashion houses.

Target is in the same industry as Wal-Mart, making them competitors. Being a retail store that supplies a variety of products from groceries to clothes to home appliances, Target cannot use differentiation as a competitive strategy. Just like Wal-Mart, it uses cost leadership. It, however, might have a lower bargaining power with suppliers as compared with giants Wal-Mart since the latter is doing better profit-wise. When is all said and done, a slow economy means peak season for Target as consumers are looking to save as much as they can.


Different firms and industries employ different competitive strategies to stay afloat in the market. Luxury firms such as designer shops use the differentiation strategy to keep customers coming(Brun). As for retail stores, under-pricing is the most logical strategy since there is a lot of competition from similar franchises. Focusing is most suited to firms dealing with a particular clientele probably from a certain region. It focuses on that particular segment and creates a unique and suitable solution in terms of pricing or differentiation.








Work Cited

Brun, Alessandro, et al. “Logistics and supply chain management in luxury fashion retail.” International Journal of Production Economics 114.2 (2008): 554-570.

Nguyen, Thi Thu Ha. “Wal-Mart’s successfully integrated supply chain and the necessity of establishing the Triple-A supply chain in the 21st century.” Journal of Economics & Management 29 (2017): 102-117.

Safari, Negin, Maryam Farhang. “The study on the competitive status of construction companies based on Michael Porter’s five competitive forces (Case study: Armeno Project Development and Management Company).” European Online Journal of Natural and Social Sciences: Proceedings 5.3 (s) (2016): 72.

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