OVERVIEW
Being the world’s largest retailer, Wal-Mart has more than 6500 stores worldwide. Its strategy has been to provide a broad assortment of quality merchandise and services at “everyday low prices” and it is best known for its discount stores. As a key enabler of its growth, supply chain was long considered by many to be a major source of competitive advantage of the company. However, the company started to lose its competitive advantages over others since other competitors began to copy the technique of using bar codes on products and share the tactics of using same sales data with their suppliers, to name just a few. Thus, in order to stay competitive and remain leader of the industry, it is necessary for Wal-Mart to refine existing and develop new marketing strategies to ensure that supply chain will remain a key competitive advantage for the company.
According to the case, Wal-Mart was introduced from several aspects: from the company background, to its development of supply chain, purchasing, distribution, retail strategy, information system, and human resources. In the following part, the case highlighted two key supply chain improvement initiatives that had been developed by Wal-Mart in 2006, namely “Remix” and RFID. Although faced with increasing issues, Wal-Mart continued to seek improvements for its supply chain, aiming to dealing with problems such as failure in controlling supplier’s out-of-stock rate and Wal-Mart’s high inventory level.
In conclusion, the case posed certain challenges that had been faced by Wal-Mart when suffering from both international and domestic market declines. (By Shujun Sun)
SWTO ANALYSIS of WAL-MART
Strengths:
One stop Shopping with wide range of products all in one store
International operation with store in 50 State and 15 countries
Successful of its lowest cost strategy. Large scale of operations with low cost
Weaknesses:
Less differentiation in brands than its competitors
Pays below minimum wage. Weak employee morale
Over expansion within boarders
Opportunities:
Seek more global markets: Europe- Asia, especially, Chinese market
Develop the strategy of super large centers (Super Wal-Mart)
Develop home delivery system
Wal-Mart could diversify their store into other types such as dollar store
Trend toward healthy eating
Threats:
Increasing competition
Target, Meijer, Kmart and ShopKo have fought for market dominance with Wal-Mart
Political problems in countries that Wal-Mart operates in
Strengths:
Wide range of product collections in one store. As it is known to all shoppers, Wal-Mart has been the leading marketer when it comes to providing a relatively complete range of product collections. A great variety of products enables customers to shop their listed items in one try without stepping into other stores in Wal-Mart. (By Meng Yue)
International operations. Wal-Mart does not rely on sales from US stores only as its competitors do. It has more than 6,500 stores worldwide with $312.4 billions sales in 2006, which is the world’s largest retail. Foreign markets open up new opportunities for Wal-Mart’s growth and provide new experience for the company as it operates quite differently abroad than in the home market. (By Benya Yau)
Low cost strategy. Wal-Mart is the largest retailer in the world with more than $400 billion in revenue and 10,130 stores. This makes Wal-Mart the giant that no other retailer can match with. Due to such large scale of operations, the corporate can exercise strong buyer power on suppliers to reduce the prices. It can also achieve higher economies of scale than competitors because of its size. Higher economies of scale results in lower prices that are passed to consumers. (By Benya Yau)
Cost leadership strategy. This strategy has helped Wal-Mart to become the low cost leader in the retail market. This strategy requires selling products at the lowest price possible and providing a no frill services to achieve higher
