By using this tactical level of management, the mid-tier managers were able to direct the lower managers and make a positive step towards accomplishing the objective that was put in front of them. SWOTT Analysis (Strengths) Low prices, management strategies, and diversity are just some of Wal-Mart’s strengths. Wal-Mart is known for being one of the largest retailers that’s able to provide a wide range of quality products at a low price. Competitors such as K-Mart are unable to compete with Wal-Mart due to the lack of name brand products. K-Mart is able to provide non-name brand products at a reduced price, but cannot maintain the low prices of the name brand products Wal-Mart provides (Hayden, P., Lee, S., McMahon, K., & Pereria, M., 2002).
Wal-Mart has quickly become the world's largest company with its one stop shopping convenience and low prices. There is no debating that Wal-Mart is a dominating force in the American and world economy. However, there is a clash between two different views of how Wal-Mart achieved this status. The defenders of Wal-Mart say that they are so successful because they are market savvy and make good economic decisions. The other side argues that Wal-Mart only became successful by killing off all their competition with their low prices.
Wal-Mart focuses their competitive priorities on bringing the customer the lowest prices by selling in volume. The vast size and selection essentially guarantees that the store will have what the customer wants in stock and at a cheaper price than competitors. This strategy allows them to outsell their competition. In order to facilitate the achievement of their goals Wal-Mart has designed their layout to accommodate a large number of shoppers at the same time. They build expansive stores with wide aisles so that many people can feel comfortable shopping at the same time.
It is actually quite the opposite, Wal-Mart’s supply chain is very customer focused, which is what gives them an advantage over their competitors. Wal-Mart focus’s on the customer and employs a pull strategy, where the demand from customers is the basis for production for Wal-Mart suppliers. This gives them a unique production method, in that they do not produce based on traditional methods rather it is based on short-term forecasts of demand generated by their customers. This allows them to not only keep stock costs low, it also allows them to track demand of individual products. This results in lowered costs of advertising and promoting products because they are able to accurately track demand and can adjust their advertising based on what is selling and what is not resulting in more accurate marketing efforts.
“Wal-Mart Germany Beefs up - Company Profile.” BNET the CBS Interactive Business Network. Discount Store News, 4 Jan. 1999. Web. 17 Sept. 2011. . “Walmartstores.com: Fact Sheets.” Walmartstores.com.
However, Wal- Mart is able to sell its goods at a low rate through a “ highly efficient distribution system and retailing expertise give Wal-Mart a cost advantage that enables it to price its products below the competition and still make a profit”(Dukes, 2003). Since Wal- Mart is not blatantly engaging in predatory pricing and is still making a profit, Wal -Mart is considered to be engaged in normal market competition. Wal -Mart still needs to make a profit on the goods it sells at extremely low prices so it must obtain its goods at a lower cost. Wal-Mart is a mega retailer and with its buying power is able to have an influence that relatively smaller stores may not have. According to the Mexico’s Federal Competition Commission, Wal-Mart is able to use its power of large
As we know Wal Mart sells highly standardized products and for the people the switching cost to change from one to another store is very low. I think that Wal Mart is big enough and that the management has now to concentrate on the numerous issues that are arising in this moment. It would be better for the company to stop for a moment its projects of expansion . In addition to that Wal Mart is excellent in America and it’s not obvious that it will be excellent in other countries too. In other countries there different cultures that may not match the Wal Mart strategy .
Wal-Mart Statement of Ethics. Retrieved on March 3, 2011 from http://ethics.walmartstores.com. Bianco, Anthony and Zellner, Wendy. (October 6, 2003). Is Wal-Mart too Powerful?
Next, a study of the company’s competitive position and strategy is conducted. This includes the dimensions of the... ... middle of paper ... ...905-4 Longo, D. (2001, October), ACNielson Unveils Wal-Mart Solution. Retail Merchandiser 41 10, 10 Neff, J., (2001, August). Rivals shut out Wal-Mart. Advertising Age, 72 35, 8 Neff, J., (2001, October).