Walmart uses process innovation more than product innovation. They are in the mature stage of the industry life cycle in which competition is intense and there is more focus on process innovations. Walmart uses process innovation throughout their value chain. They use just-in-time inventory to improve logistics. Walmart has made their trucks more fuel efficient and has improved routing to reduce miles. They have tried a new way to load their their trucks which allows them to get 3% more product on each load. Walmart uses ID tags on all their products to track them (Walmart Sustainability Report, 2009).
Walmart uses incremental innovation rather than radical innovation. The incremental innovations give Walmart a competitive advantage by increasing productivity and decreasing costs. These incremental innovations have been sustainable because they have done them better than all of their competitors.
Walmart is an example of disruptive innovation. They appeal to customers who are less demanding and who seek convenient, less expensive solutions. Even though Walmart is a big corporation, they have a simple structure. This allows Walmart to enter new markets and enter the low-end of existing markets (Dess, Lumpkin, Eisner, McNamara, 2012).
Of the 5 dimensions of entrepreneurial orientation, I think Walmart uses competitive aggressiveness the most. They use the technique of entering new markets with drastically lower prices. This leads to a long-term price competition which drives out competitors and increases their market share. Other dimensions that Walmart uses are proactive and innovative. They use these dimensions in their process innovations.
Dess, Lumpkin, Eisner, McNamara. Strategic Management. 6th edition. 2012.
Walmart Sustainability Report. 2009. Retrieved from http://www.walmartstores.com/sites/sustainabilityreport/2009/en.logistics.html
