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• Efficient IT infrastructure enables to smoothen inbound and outbound logistics.
• Distribution efficiencies reduces the dependency on the suppliers inefficiencies.
• Wide range of products provides customer anything and everything under one roof.
• Current dominating market position gives advantage in market development and penetration.
• economies of scale
• The weakness is that their overhead is expensive to run store facilities all over the world.
• Hierarchical corporate structure may impair decision-making.
• In an attempt to succeed by means of low prices, may possibly portray Walmart as a cheap store.
• Market maturing
• Concentration in a low margin industry
• Zoning issues are the store real estate problems. Just because a company has the ability to build a huge store anywhere it wants to, it does not necessarily mean that it is possible to build one anywhere it wants to. The real estate issue becomes more evident in crowded cities such as Japan where there is a major concern over the availability of real estate.
• Expansion into emerging International markets
• Societal trend towards environmental friendly and American –made products
• Move toward value for money products in the slower economic growth
• Even though Wal-Mart is the largest retailer and most successful, they can still be threatened by many factors ranging from their main competitors, environmental, and economic factors.
• In many places in USA, Wal-Mart has faced the Anti Wal-Mart activists. According to them having Wal-Mart in the neighborhood kills the local retailers, increases the property taxes to pay for sewage, roads, utilities, and sidewalks.
• Regulations and political stability in the international markets
• Exchange rate fluctuations
• A union problem for ex.Germany has one of the highest degrees of unions and this has a profound effect on hiring, retaining, and laying off employees. Once an employee is hired, it costs more in Germany to keep the employee on payroll and to lay off the employee. German workers are one of the highest paid workers in the world.
• Capital intensive for expansion
The main challenge for Walmart in the years to come is to make sure they continue to keep their customer’s and associates satisfied. In addition, to be a profitable corporation for their investors who own stock in Walmart.
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Taking the organization ahead – A roadmap from 2004 ton 2007:
• Internal product development :
Our product-development team, working with Wal-Mart buyers, is driving significant improvement in key product categories such as apparel, domestics and electronics.
• Global procurement:
Last year we assumed responsibility of global procurement from a third party. This allowed us to better coordinate the entire global supply chain from product development to delivery. In addition, our global procurement program allows us to share our buying power and merchandise network with all our operations throughout the world.
• Promote the “Walmart” Culture: All Wal-Mart leaders must understand our culture and our commitment to integrity. That’s why we’ve developed a number of leadership initiatives, including the Business Leadership Series, People Asset Reviews and accelerated programs for high-potential international managers.
• Leverage the core competencies we have developed in logistics, information systems and real estate :
These competencies represent an essential part of our “every day low cost” commitment, which makes “Every Day Low Prices” possible. One of our favorite ways to introduce value is the Rollback program, which began in 1992 as a way of reminding Customers that we’re not resting on our Every Day Low Prices.