For each strategy that Wal-Mart promotes in flyer ads or television commercials, they measure the return on investment from these promotional strategies. If a strategy does not have a return on investment of a certain percentage in sales, those strategies are revamped or discarded. Backward expansion strategy is another key to Wal-Mart’s success. Unlike other retail stores, Wal-Mart opens their stores in a small town first before entering into metropolitan areas. “Wal-Mart spreads out like molasses from its Arkansas base by constructing new stores strategically located near distribution hubs and smaller towns, rather than leapfrogging across the nation like the other retailers” (Harper, 2004, p. 2).
Following is an analysis of Wal-Mart's competitive strategy. Pricing 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's supply chain management supports a fast and responsive logistics system. In this paper, I will converse about the history of Walmart, and its supply chain management Walmart's History, and Walmart's Supply Chain Process 1. History and background of Walmart and the products that it deals with Walmart was started by Sam Walton in 1962, after experiencing franchising in Newport. He realized that he could pass to his consumers the discounts that he earned by purchasing in wholesale and subsequently managing to acquire profits through the sale by volume. Sam Walton was obsessed with cost cutting and he managed to foster this culture in the business that he started (Frank, n. d).
He says, "Let them (your customer) know you appreciate them." So what has Wal-Mart done to show that they appreciate their customers? They use one-to-one relationship marketing tactics, executed by the famous Wal-Mart greeter. The Wal-Mart greeting was the original method used by the giant retailer to show customers that they are appreciated. A greeter at the door thanks customers for coming in, assists with a shopping cart, and provides a "goodbye thank you" upon departing the store.
The alternative norms are that Costco operations are entirely based on the warehouse model and membership fees offer customer more of an economic advantage to customers than Wal-Mart everyday low prices and flexible payment with suppliers. My objective is to analyze the two retail giants’ methodology to satisfy and maintain customer although that I anticipate Wal-Mart’s to be a better buy than Costco because of the gargantuan scale of Wal-Mart has constructed its commerce on saving the customer
Suppliers of Walmart know that a good relationship with Walmart will ensure that a large percentage of their earnings are not lost. Walmart is able to maintain the number one position in the industry by owning their supply chain processes. Walmart has in place a large number of warehouses and advanced technology in order to reduce costs by eliminating the middlemen. Walmart also prides itself on great customer service. For example, on entering a Walmart store, one would be immediately greeted at the door by a staff with a smile.
Firms give discounts, because this attracts new consumers, since they are looking for low prices (Parguel, Pechpeyrou, Sabri-Zaaraoui, & Desmet, 2007). Attracting new customers means higher revenues and higher profits. The following task for a firm is to keep customers. By giving loyalty rewards, people will come back to your store. This also creates a disincentive for consumers to shop elsewhere, because they forgo discounts or extra benefits by doing this.
For the final group project we chose to complete a management analysis on Wal-Mart. Covered in this paper are the issues of productivity, hiring practices, corporate social responsibility and culture, diversity and affirmative action, the use of information technology, leadership, teamwork, and managing ethics. Productivity is very important to any successful business. Wal-Mart has increased its productivity through many different advances. Business analysts have long admired Wal-Mart's logistics management, even though the public recognizes them for their low discounted prices.
In 1962, Sam Walton opened his first Walmart Discount store in Rogers, Arkansas. Walmart started as a company that focused on helping customers and communities with discount prices and vision that Mr. Walton had to move the company and his employees forward. To this day, Walmart is still known for these things and more. This company didn 't lose focus on help expanding in communities, caring for the people and making money in the process. Walmart has continued to stay ahead of all it 's competitors through all the changes in technology and is still the largest leading retail of it 's kind.
The founder of Wal-Mart is a late 1940’s retailer by the name of Sam Walton. Walton was said to be a cheap man, and would cut corners and save money wherever possible. That is how his idea to pass the savings on to the customer came to be. He knew he could save money like other retailers by making deals with suppliers, but he also knew that if people could experience the savings more directly the sales volume would increase and he could still make a profit. Walton wanted to earn his profits through volume.