Wal-Mart Stores in 2003

947 Words2 Pages
bulb-icon

Recommended: Wal-Mart's competitive strategies

Wal-Mart Stores in 2003

Identify the issue

Wal-Mart stores, one of the most successful retailing chain in the world, has gain competitive advantage over its competitors. Thanks to his unique set of features, like its powerful IT system, its way of manage suppliers or its logistic system, Wal-Mart is able to responds quickly at demand changing, maintain low costs and satisfy its customers.

Framework used in analysis

The analysis will be conducted using the value chain framework in order to analyze the situation and activities that Wal-Mart currently faces. The different resources and capabilities will be organized and categorized according to the value chain. Therefore, it will be possible to find out the unique set of competitive advantage that permits Wal-Mart leadership in retailing industry.

* D.C. : Distribution centre

Primary activities

Distribution is one of the most important activities of Wal-Mart. The company decided to build his own warehouses in order to buy in volume at attractive prices. Wal-Mart’s distribution centres are huge(One million square feet in size), highly automated, near to stores and operate 24 hours a day. Goods are delivered to stores usually within 48 hours of being ordered. The percentage of merchandise flowing through distribution centres are higher for Wal-Mart (compared to competitors). These features permit high efficiency (Wal-Mart inventory turns is 7.6 compared to 5.4 of Kmart and 6.1 of Target. Wal-Mart inventory cost accounts in 2003 only for 2- 3% of revenues compared to 4-5% of other retailers) The Scan’n pay system reduces the risks of unsold items for Wal-Mart and it’s an indication of its huge bargaining power . Innovation has always played a central role in Wal-Mart distribu...

... middle of paper ...

...ics of Wal-Mart paying less to its workers than industry average and its incentives are mainly for higher level of management people. We think it may be one of the reasons why Wal-Mart achieves cost saving in labor aspects. Although salary may be low and various employee benefits may be no better than its competitor, Wal-Mart put great effort to do training which benefits the employees’ future development.

The IT system helps Wal-Mart attain high efficiency. IT system is utilized in lots of, if not all, Wal-Mart value chain activities and it helps the company achieve operation efficiency and cost saving. For example, RFID system reduces labor cost and IT system in operation increase the labor productivity to a great extent; MCAPS creates great value for supplier which in turn improve the bargaining power of Wal-Mart to its suppliers. These kinds of example are a lot.

Show More
Related

  • Deenu Parmar's Labouring The Walmart Way

    199 Words  | 1 Pages

    In Deenu Parmar's "Labouring the Wal Mart Way," the author discusses the business practices of Wal Mart, their impact on systemic poverty, and on existing work unions. Their business model forces competition to align with them, or close up shop. Wal Mart hires workers that would usually have a difficult time finding employment. That said, they pay them well below a living wage. Staff are also subject to abuses like overtime without pay. Wal Mart is resolute in their feelings towards unions. Their hiring process designed to cut out union sympathizers. This way, they can prevent any retaliation from staff seeking a better work environment. If anti-union efforts are unsuccessful, they close the store. It also forces existing unions to take pay

    Read More

  • Wal-Mart's Argumentative Essay

    1214 Words  | 3 Pages

    Few companies create as much controversy as Wal-Mart has done with its approach to maintaining high profits with low costs. Individuals either love or hate Wal-Mart. There are consumers who like the low prices and convenience of shopping at Wal-Mart. Supporters of Wal-Mart also laud the fact that the company creates multiple jobs for not just the individuals who are employed within the stores but also those who create the products that are sold in the stores. Critics of Wal-Mart have issues with the treatment of those individuals who work at Wal-Mart. Wal-Mart has a poor track record when it comes to Fair Labor Practices by giving low wages, bad healthcare coverage, and treats employees. Low wages, no benefits, irregular schedules, and unreliable hours are just some of the horrible working conditions most Walmart workers have to endure.

    Read More

  • 10 Reasons Why Walmart Is The Worst Company In America

    1111 Words  | 3 Pages

    From this, it is clear that not everyone is a fan of the company. But where are this perspective coming from? It is just as likely for them to be from a biased outlet as the information they’re presenting being false. However, these perspectives can be easily counteracted by opposing ideas. One of which being the author stating the so-called “investing over $2.7 billion in wages” plan. Which I can confirm is true. In addition, since this plan was introduced in 2015, it has had a positive impact on the companies sales both in stores and online. The 200 training centers opened in 2015 as mentioned by the author, was a positive implementation in order to increase the minimum hourly rate. Before of which, had been a common complaint and issue associated with the company. Not only this, but there were endless complaints made about the company’s employee treatment, but it seems as though Walmart has acknowledged these complaints and in recent times has taken a step in the right direction. The author had not addressed much factual information regarding its suppliers and rather the “goals”

    Read More

  • Against Walmart Essay

    1523 Words  | 4 Pages

    Walmart is one of the most successful franchises of all time and continues to take fire from multiple angles, whether it’s about the costing of jobs, the wages, the health insurance, the small business destruction, or the environmental impact, but can always back itself up by negating those claims with facts that proves that it is beneficial to the community.

    Read More

  • walmart

    1685 Words  | 4 Pages

    Wal-Mart's marketing strategy was to guarantee "everyday low prices" as a way to attract customers. The traditional discount retailer, which relies on "sales," not only has to do more advertising and promotions but also has to rely more on catalog mailing, buildup of inventory before a sale, markdowns on the unsold inventory, etc. Wal-Mart stores operate according to their "Everyday Low Price" philosophy. Wal-Mart has emerged as the industry leader because it has been better at containing its costs, which has allowed it to pass on the savings to its customers. Wal-Mart has become a capability competitor. With such low wages for those who make the Bratz dolls, Wal-Mart can profit greatly while still providing low prices to its customers. In a global labor market, it is the companies who can find the cheapest, most exploitable conditions, with little worker protection or regulations that will profit the greatest.

    Read More

  • Wal-Mart's Competitive Environment

    1679 Words  | 4 Pages

    Wal-Mart’s competitive environment is quite unique. Although Wal-Mart’s primary competition comes from general merchandise retailers, warehouse clubs and supermarket retailers also present competitive pressure. The discount retail industry is substantial in size and is constantly experiencing growth and change. The top competitors compete both nationally and internationally. There is extensive competition on pricing, location, store size, layout and environment, merchandise mix, technology and innovation, and overall image. The market is definitely characterized by economies of scale. Top retailers vertically integrate many functions, such as purchasing, manufacturing, advertising, and shipping. Large scale functions such as these give the top competitors a significant cost advantage over small-scale competition.

    Read More

  • Walmart

    7713 Words  | 16 Pages

    In 1945, Sam Walton opened his first variety store and in 1962, he opened his first Wal-Mart Discount City in Rogers, Arkansas. Now, Wal-Mart is expected to exceed “$200 billion a year in sales by 2002 (with current figures of) more than 100 million shoppers a week…(and as of 1999) it became the first (private-sector) company in the world to have more than one million employees.” Why? One reason is that Wal-Mart has continued “to lead the way in adopting cutting-edge technology to track how people shop, and to buy and deliver goods more efficiently and cheaply than any other rival.” Many examples exist throughout Wal-Mart’s history including its use of networks, satellite communication, UPC/barcode adoption and more. Much of the technology that was utilized helped Sam Walton more efficiently track what he originally noted on yellow legal pads. From the very beginning, he wanted to know what the customers purchased, what inventory was selling and what stock was not selling. Wal-Mart now “tracks on an almost instantaneous basis the ordering, shipment, and delivery of literally every item it sells, and that it requires its suppliers to hook into the system, enabling it to track most goods every step of the way from the time they’re made and packaged in the factories to when they’re carried out store doors by shoppers.” “Wal-Mart operates the world’s most powerful corporate computing system, with a capacity (as of late 1999) of more than 100 terabytes of data (A terabyte is 1,000 gigabytes, or roughly the equivalent of 250 million pages of text.).

    Read More

  • Wal-Mart

    940 Words  | 2 Pages

    Over the years Wal-Mart has been under heavy scrutiny for their treatment of employees. Poor work conditions, inadequate health plans and low wages are among the problems that many Wal-Mart employees face. Like every other company, Wal-Mart’s main goal is to make profit; however, they do so at the expense of their employees. This adds to the criticism, “Wal-Mart fails to pay its employees a living wage.”(Bauer)

    Read More

  • Potengths And Strength And SWOT Analysis Of Walmart

    1583 Words  | 4 Pages

    Walmart is one the biggest retail corporation and is the one that employs more people. Thanks to people Walmart is what it is. Walmart sells goods to 260 million people in 28 countries. Walmart is a great company, and its marketing characteristics are top-notch. This is demonstrated through A complete evaluation of the company is detailed here. From the internal strengths and weakness to external opportunities and threats; these are the main parts of this marketing plan. This plan includes other parts such as the company's growth strategy. The Environmental analysis, the SWOT analysis, the marketing objectives, the marketing strategies, and the marketing implementation are essential parts of a marketing plan.

    Read More

  • Walmart Information Management System

    758 Words  | 2 Pages

    Walmart is a retail giant that just about everyone in America has purchased something from them. It is a one stop shop for anything that a person could ever need. Walmart stores can be found anywhere in fact most people are less than an hour drive away from a Walmart store. Walmart’s success has put many companies out of business. The chains success is primarily from low prices and using an information technology system to meet customer demands giving them a competitive advantage. Walmart’s first major use of information technology came in 1975 when the company leased an IBM computer system to track inventory in warehouses and distribution centers. Computers have come a very long way since this time and are used almost everywhere. But in 1975 this was cutting edge technology and gave Walmart the competitive advantage over other retailers. Another thing that Walmart used to be revolutionary in their supply chain was the use of scanning barcodes in 1983. Before barcodes objects had to be read by a skilled cashier. With barcodes all that was needed was a quick scan and the computer would do all the work. This greatly sped up checkout time and made tracking inventory and data collection much faster and easier for both customers and the employees. Since this time it has become an industry standard for products.

    Read More

  • Strategic Management of Wal-Mart

    1002 Words  | 3 Pages

    Wal-Mart Stores Inc. is in the discount, variety stores industry. It was founded in 1945, Bentonville in Arkansas which is also the headquarters of Wal-Mart. Wal-Mart operates locally as well as worldwide. It operated 1209 discount stores, 1980 super centers, and 567 Sam’s Club by January 31, 2006. It has also extended its operations to many international countries. It runs its retail stores in two forms: Sam’s Club and Wal-Mart Stores. The Sam’s Club sells assorted product lines such as hardwares, electronics, jewelry, and to mention a few. The Wal-Mart stores also offer similar products in addition to the following: health and beauty products, apparel for women, men and children, household appliances etc (www.yahoo.finance.com). The Vision Statement, Mission Statement, Values and Code of Conduct, Corporate Governance: Directors, Executive Management, Committees and Stakeholder will be the key elements that will discussed in this report as it relates to Wal-Mart. In addition to that, the major trends in the general/macro environment and industry will be analyzed.

    Read More

  • Walmart Inventory Management Case Study

    1260 Words  | 3 Pages

    From the manufacturers’ warehouse to the shelves, the business must orchestrate a symphony of the right products to the right places at the right times. Walmart serves customers and members more than 200 million times per week in retail outlets, online and on mobile devices. The company is able to offer a vast range of products at the lowest costs in the shortest possible time (Chandran, 2001). The main reason for this incredible growth of Walmart is because its distribution centers are highly automated.

    Read More

  • Strategic Analysis Of Wal-Mart's Supply Chain Management

    1616 Words  | 4 Pages

    Wal-mart has been able to achieve respectable leadership in the retail industry because of its focus on supply chain management. Discuss in detail the distribution and logistics system adopted by Wal-Mart.

    Read More

  • Operational Planning For Wal-Mart

    1617 Words  | 4 Pages

    Wal-mart has a reputation for caring for its customers, of course their employees, and for the prospective public. So Wal-Mart can be an industrial leader for the world of shoppers with an eye for lower affordable prices, company decision makers would continue it's systematic strategies that it's founder and president established years ago. Sam Walton believed in three guiding principles in his strategy planning they were to provide the customer with good value and service, to have a good relationship with its associates, and to be involved with the community.

    Read More

  • Performance Management Essay

    1020 Words  | 3 Pages

    ...arket, they still attempt to improve their performance in other areas, by contributing to charity and hence improving their local reputation, however they have very low customer and employee satisfaction. These lowered performance indicators stem from low employee motivation. It would be very beneficial for Walmart to increase these performance factors as the small cost of improving employee’s conditions and motivation would be balanced by not having to re-hire 70% of their work force every year.

    Read More

More about Wal-Mart Stores in 2003

Open Document