Wal-Mart relies heavily on a few key things that they believe will help them have a competitive cost advantage. Size plays a big role in what Wal-Mart is trying to do to keep market share. Wal-Mart’s size helps to effect the economy, and surrounding geographic locations by mitigating the threat of new entrants. If Wal-Mart has already invested in a small area it will be hard for competitors to come in, and share the market, or even small businesses to make rent. Sure, the brick and mortar side of the business is impressive. However, the size that Wal-Mart’s reputation holds is so much larger than we, as consumers can visualize. Also, the distribution centers are a prime part of the success Wal-Mart has. They utilize the hub and spoke system, …show more content…
China is not that. Wal-Mart needs to pack up, and head to higher or more common ground. They are fighting a losing battle in China that doesn’t make good business sense. The conditions to do business in China do not fit the Wal-Mart mold. Running the hub and spoke method of distribution is made to be very difficult because of three store limit China imposed on Wal-Mart, and many cities in China were not that excited about foreign retailers coming in. With the sever levels of bureaucracy to go through in China, getting a Wal-Mart center off the ground for each new store they tried to open become more arduous and time consuming. Wal-Marts big trucks on those tiny roads made for overall difficult logistics. Wal-Mart should realize they are not able to operate the in the size, way of logistics or type of locations that works for them. Instead of spending more money on R and D, invest at home and where the business model works. With the Chinese market the way it is, Wal-Mart cannot mitigate threats easy, or exploit opportunities because they are having trouble even putting their stores where they want. Great business model, sure, but some places just don’t work. Wal-Mart leaving doesn’t mean failure. Wal-Mart leaving just means re-allocation of success driven goals. Focus business elsewhere where the business model of Wal-Mart
Wal-Mart, a "Big-Box Retailer" employs more than 2.1 million associates worldwide and has two-thousand seven-hundred stores in the United States with many more in Argentina, Brazil, Canada, Central America, Chile, China, Germany, Japan, Korea, India, Mexico, Puerto Rico, and the United Kingdom, making Wal-Mart the largest retailer in the world. "Wal-Mart accounts for upward of 30 percent of U.S. sales, and plans to more than double its sales within the next five years" (Lynn 29-36). Why is Wal-Mart so successful, and is Wal-Mart actually bad for America?
With Wal-Mart being so outrageously huge in this short of time, I believe that it has not yet settled into their customers why Wal-Mart is so cheap. Wal-Mart will replace higher wage jobs with lower wage jobs and require taxpayer assistance to keep Wal-Mart employees out of poverty. Numerous studies reveal that, contrary to the company's PR, Wal-Mart does not create new jobs when it comes to town. Wal-Mart simply replaces higher paying retail jobs with lower paying ones and, due to its adverse impact upon local businesses, may actually cause a net decrease in job numbers. The factories in China supply their employees with a whopping three dollar...
Wal-Mart represents the sickness of capitalism at its almost fully evolved state. As Jim Hightower said, "Why single out Wal-Mart? Because it's a hog. Despite the homespun image it cultivates in its ads, it operates with an arrogance and avarice that would make Enron blush and John D. Rockefeller envious. It's the world's biggest retail corporation and America's largest private employer; Sam Robson Walton, a member of the ruling family, is one of the richest people on earth. Wal-Mart and the Waltons got to the top the old-fashioned way: by roughing people up. Their low, low prices are the product of two ruthless commandments: Extract the last penny possible from human toil and squeeze the last dime from its thousands of suppliers, who are left with no profit margin unless they adopt the Wal-Mart model of using nonunion labor and shipping production to low-wage hellholes abroad." (The Nation, March 4th 2002 www.thenation.com/doc.mhtml?i=20020304&s=hightower).
As seen in Exhibit F, Best Buy has 1,055 main locations that consist of their standard large format stores, and 406 Best Buy Mobile locations that focus on mobile device sales. To supply these locations, Best Buy has 23 distribution centers located throughout the country. Comparatively, Wal-Mart has 4,625 stores stocked by 158 strategically located distribution centers. This puts Wal-Mart at a huge advantage in a couple of ways. Not only is Wal-Mart much more likely to have a store nearby any given customer, they are also better equipped to keep its products in stock at all times. This means more customers visit, and due to stocking, more customers can make the purchase they want. On an international level, Wal-Mart also exceeds Best Buy’s few hundred stores with 6,308 stores in over 11 countries. This furthers Wal-Mart’s availability to customers and puts them at an advantage over Best Buy. Additionally, the increased scale of Wal-Mart’s retail and distributive operations make them extremely competitive on pricing, a major aspect of purchase decisions for high-ticket items like consumer electronics.
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.
Walmart’s ownership and execution of the supply chain is a core competency that sets them apart from the competition. They have minimized the turnaround time to replenish inventory back into the stores. They also have agreements with suppliers to deliver products direct to the stores. Walmart owns 158 distribution centers strategically located in close proximity to many Walmart stores. The distribution centers employ 7,000 truck drivers to deliver truckloads of merchandise to the 10,700 retail stores with their tractors and trailers, as the inventory system dictates.
Strategy This researcher would characterize Wal-Marts’ strategy as Market penetration and Market development. Market penetration is strategies focused “primarily on increasing the sales of present products to present customers” (Donnelly, Peter, 2007). Market development is pursuing growth of the company by seeking “to find new customers for its present products” (Donnelly, Peter, 2007). Chief components of Wal-Mart’s strategy are they have used cutting edge technology, created strong relationships with suppliers, developed efficient distribution centers with their own truck fleet, and have kept store construction and maintenance economical.... ... middle of paper ...
Wal-Mart definitely has the business strategy of Low Cost Leadership. They do nothing to really differentiate themselves from competitors and provide no-frills self-service stores that always provide the lowest prices. Wal-Mart has built enough clout with suppliers that they can dictate the prices and go in and change suppliers manufacturing processes in order to wring out more and more savings for the consumer. Everything that Wal-Mart does from calling suppliers collect to having execs double up in hotel rooms, is to save the customer money. While they do try to provide good customer service on top of low prices, Wal-Mart's strength is low-prices. No one has such a supplier and distribution network like Wal-Mart that allows such low prices.
How does managerial planning for Project Impact take place at different levels within the organization?
Summarize and discuss the core issue in the case. Do not repeat the entire case details but only pertinent information at the heart of the case.
Wal-Mart Stores, Inc.’s legendary competitive advantage in distribution and low cost operations has eroded beyond the point of recovery. Once considered the undisputed cost leader in retail, a recent study showed that after discounting tax and shipping, a basket of goods at Walmart cost 19% more than at Amazon.com (Jannarone, 2011). Forbes contributor Steve Denning points out that if a consumer wants something quick, he shops at a convenience store; if he wants something cheap he’ll buy at Amazon.com; and Walmart is no longer needed (Denning, 2011).
This consultancy report is addressed to Walmart, the leading multinational retail company of the world planning to enter in recently liberalised and reformed Indian retail sector, where foreign direct investment has been allowed cent-percent in real terms. The report deals with four specified aspects. Firstly political system and risk of India is analysed from the perspective of Walmart. Next market potential is assessed with reference to opportunities and challenges. Further trade and investment barriers are detailed with reference to the observation of the World Bank. Finally entry mode and location choice is recommended for Walmart to operate in India, where the likely cross-cultural management point is also made.
Wal-Mart is known to beone of the best supply chain companies in the world. Throughout the years Wal-Mart has adapted strategies that keep up to their name. Unlike many retailers, Wal-Mart purchases goods directly from manufacturers, skipping a few steps of the supply chain cycle. Buyers use advanced negotiation skills to make sure they are receiving the best price on purchases. Wal-Mart also has their own trucks picking up from warehouses, reducing the price significantly on transportation. Long term relationships with vendors are extremely emphasized to understand prices and cost structure. These practices build Wal-Mart to its name and keeps low prices for retail customers all over the world. Supply Chain studies have shown that in 1998, Wal-Mart would fill up stock in 2 days compared to their competitors which would complete it in 5. Part of the reason Wal-Mart would replenish so
Wal-Mart Stores, Inc. is a renowned retail goods superstore that sits atop the Fortune list at number one. It would be very difficult to find an individual who is unaware of Walmart’s position as the largest brick-and-mortar retail chain in the world. The company has thrived over the past few years and continues to grow by effectively managing its store operations and distribution strategies. One of the major contributors to the business consistently meeting market expectations is directly attributable to their management approach. Walmart has revolutionized the way retail companies manage their supply chains in more ways than one.
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.