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Wal-Mart's competitive strategies
Walmart's supply chain as a source of competitive advantage
Wal-Mart's competitive strategies
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• Wal-Mart’s supply chain practices strive to offer the lowest cost price to their consumers. It is done by avoiding unnecessary middlemen and seeks to purchase products directly from the manufacturers. The firm is committed to find the best prices by leveraging on their buyer power to obtain favorable supple chain arrangements. • Wal-Mart strategic alliances with Procter and Gamble (P&G) through a vendor-managed inventory (VMI) also known as continuous replenishment, which began their partnership since the late 1980’s. P&G benefits from Wal-Mart openly sharing its point-of-sale (POS) information (via satellite and Internet electronic data exchange software) and is free to determine appropriate inventory levels and policies (Samaddar, Nargundkar & Daley 2006). “In this relationship, buyers relinquish control of key resupply decisions and sometimes even transfer financial responsibility for the inventory to the supplier. The arrangement transfers the burden of asset management from the consuming organization to the vendor, who may be obliged to meet a specific customer service goal.” (Waller, Johnson & Davis 2001, p.1) o Sources: Samaddar et al. from http://ac.els-cdn.com.ezp.lib.unimelb.edu.au/S0377221705002407/1-s2.0-S0377221705002407-main.pdf?_tid=8bb6760c-cd4c-11e3-b41b-00000aab0f26&acdnat=1398521619_501b0f439b60053dbf3279a49ee37c70 • P&G’s involvement facilitates lower inventories, greater product availability, the avoidance of stock-outs, greater inventory turns and lower lead times within this pull-based supply chain. VMR greatly reduces the bullwhip effect and variability in the supply chain from downstream (retailers) to upstream (suppliers). (http://www.datalliance.com/vmi_retail_sc.pdf) • CEO of Wal-Mart Brazil, Marcos ... ... middle of paper ... ...pril 13, 2012, from http://www.business.illinois.edu/Working_Papers/papers/06-0102.pdf The Wal-Mart Story. (2012). Retrieved April 13, 2012, from http://www.cisco.com/warp/public/779/ibs/vertical/retail/Wal-Mart.PDF Useem, J. (2003, March 3). One Nation under Wal-Mart. Fortune, 2-9. Walmart unveils program to make supply chain greener. (2010).Canadian Sailings, 3(8), 22. Javorcik, B. S., Keller, W., & Tybout, J. (2006). Openness and Industrial Responses in a Wal-Mart World: A Case Study of Mexican Soaps, Detergents and Surfactant Producers. National Bureau of Economic Research, 12(4), 5-7. Lee, H. (2010). Don’t tweak your supply chain: Rethink it end to end. Harvard Business Review, 88(10), 62-69. Useem, J. (2003, March 3). One Nation under Wal-Mart. Fortune, 2-9. Zellner, W. (1992, March 16). How True-Blue is Wal- Mart’s ‘Buy American’ Pledge. Business Week, 1-6.
Overall, Carlsen is able to provide a convincing case against Wal-Mart and their latest “step in a phenomenal takeover of Mexico’s supermarket sector.” She conveys multiple rhetoric devices and is able to do so in a relatively short article. Though Laura effectively uses the three primary persuasive appeals logos, pathos, and ethos throughout the piece, her argument is most successful when she takes a more direct approach in reaching her target audience, saying “The dispute is not a battle between past and future. It is a struggle over a country’s right to define itself.” She also states Wal-Mart’s practices interfere with on the country’s “contemporary integrity” by constructing on the ancient site. Her tone, along with her use of various rhetoric appeals, contributes to creating an effective and successful argument.
In the United States and all over the world, the entry and operations of big retailers like Wal-Mart into a small town sparks great controversy within the community. The fact that people contemplate on the fact that the policies and actions of Wal-Mart are destructive to a small town’s economy is not new. Most small town’s economies are run by subsistence and self-reliant traders. With time, the traders embrace the division of labor and specialization of skills in accordance with the trade, production and manufacturing needs of the community. In such a market, a simple move like a decision by the producers to sell directly to the consumers may spark
Dicker, John. The United States of Wal-Mart. New york: Penquin Group Inc., 2005. 21-59. Print.
Sethi, Parkish. "The World of Wal-Mart." Carnegie Council. N.p., 18 May 2013. Web. 26 Jan 2014. .
Wal-Mart is a brand that is well known around the world, especially in the USA. It has gradually developed into the largest retailer in the world. Wal-Mart’s globalization efforts have been happening rapidly. But have they been successful in all aspects of their international expansion or not? This is the main thought that is going to be discussed in this essay. The questions I will be looking at are based on a case called “Wal-Mart takes on the world” from the book of International Business The Challenge of Global Competition eleventh edition – Ball, McCulloch, Geringer, Minor, and McNett. Questions are the following:
The case study starts off with quotes from Wal-Mart executives with their thoughts of how employees/consumers should feel about the arguably most innovative retailer. “Wal-Mart employees who do not think globally are working for the wrong company.” “Wal-Mart must think and act as if it’s a global company. Otherwise, it cannot grow enough in the United States to maintain its stock price. It needs to be in South America. It needs to be in Asia. It needs to be in Europe.”
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.
Wal Mart is a very successful company that offers many products to a variety of people. Most stores will take into account who is purchasing the product, who wants the product,
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.
Since brands depend on delivering a uniform, consistent product, global brands has traditionally adopted a “one size fits all” strategy (Crothers). Wal-Mart continues to expand internationally because it relates to other U.S global brands such as McDonalds. “ McDonalds grounded on one simple idea: provide desirable food and drink at low cost.”(Crothers 130). Wal-Mart’s strategy was almost the same to begin with. What they have in common is convenience and low cost. Its fast and quick just like McDonalds’. Customers at Wal-Mart can buy anything at one place and one time. It’s a superstore and everything you need is there. Customers do not need to leave to go to another store, which is why Wal-Mart is so successful. Smaller retail companies get replaced because they don’t have a chance with competing with Wal-Mart. A Wal-Mart store opening can destroy almost three local jobs for every two they cre...
...bama. "Outstanding article on the WalMartization of America by Harold Meyerson at The American Prospect." Daily Kos. N.p., 3 Dec 2013. Web. 1 Jul 2014.
This report provides a comparison of the supply chain management practices of Wal-Mart and Toyota. Comparison was done after researching, examining, and analysing each company’s supply chain management practices, in relation to each company’s values and philosophy. Comparison was done in five sections, by examining strategic alliances, procurement and outsourcing, challenges and risks, sustainable strategies, and efficient supply chains in relation to technology. Additional figures and references used can be found in the appendix and reference list.
It opened in 1962 by Sam Walton, Wal-Mart has become the largest retailer in the United States, and with over 3,300 stores Wal-Mart continues to be successful. Under his successor, CEO David Glass, the small discount store chain started in Arkansas has become one of the largest corporations in the world. David Glass lays out the philosophy: “we approach this new and exciting decade of the 90’s much as we did in the 80’s focusing on only two main objectives, (1) providing the customers with what they want, when they want it, all at value, and (2) treating each other as we would hope to be treated, acknowledging our total dependency on our associate-partners to sustain our success.” This statement by Glass shows that Wal-Mart has devised a plan in order to maintain its high ranking in the retail business. The question becomes, can Wal-Mart continue to expand and succeed in an increasingly hostile retail environment? I will discuss the external stakeholders? 2) Do a SWOT analysis of Wal-Mart. What are the company’s distinctive competencies? 3) How would you describe Wal-Mart’s “Grand” strategy for the next decade? In terms of Porter’s generic strategies?
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 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.