Business Model Evaluation: Quantifying Walmart's Sources of Advantage

We develop an analytical framework on the basis of the economics of business performance to provide quantitative insight into the link between a firm's business model choices and their profit consequences. The method is applied to Walmart by building a qualitative representation of its business model and mapping that representation on an analytical model that quantifies the company's sources of advantage over time. The analysis suggests that the effectiveness of a particular business model depends not only on its design (its levers and how they relate to one another) but, most importantly, on its implementation (how the levers are pulled). Copyright © 2014 Strategic Management Society.

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