In early 2017, Wal-Mart remained the largest company in the world, with total annual revenues of over $485 billion. It employed 2.3 million people, making it the largest private employer in the world. With nearly 11,700 stores in 28 countries, it served approximately 260 million customers each week worldwide. Throughout its history, Wal-Mart had emphasized "everyday low prices," a commitment to offering consistently low prices on all merchandise, rather than deploying sales and promotions on select items. Maintaining low prices depended on using Wal-Mart's operational prowess, scale, and buying power to contain costs. Many general discount retailers, including Ames, Bradlee's, and Woolworth's, had struggled to compete with Wal-Mart and had gone out of business in the 1990s. Longtime competitor Kmart had declared bankruptcy in 2002. But Wal-Mart faced significant challenges. Although it had weathered the recession of 2007-2009 better than many of its rivals, it had found it difficult to return to the double-digit growth rates that had characterized its history. While Wal-Mart had outpaced its rival brick-and-mortar retailers, its biggest challenge came from the online world, especially online retail juggernaut Amazon. Its online performance continued to lag Amazon in the U.S., while China's Alibaba could credibly claim to have surpassed Wal-Mart as the world's largest retailer, based on gross merchandise volume (GMV). Kmart emerged from bankruptcy and merged with Sears in 2004 to form what was at the time the third-largest U.S. retailer, behind Wal-Mart and Home Depot. Wal-Mart closed 269 stores worldwide in 2016, including 154 in the U.S. and 115 abroad, primarily in Latin America. At the same time, CEO Doug McMillan announced that Wal-Mart would open over 300 new stores in 2017, most of them overseas.

a) Using Porter's Value Chain Analysis, explain how Wal-Mart achieved significant competitive advantages.

b) Given the new challenges, how can the world's largest company reignite its growth? Are opening new stores sufficient? Does Wal-Mart need more dramatic change?