Walmart

Wal-mart is the most Leading Cost Leadership Company. How Wal-mart is able to keep its price low to be a cot leadership company is first of all, it has efficient supply chain management. WalMart has its great supply chain system. WalMart introduced the most solid supply chain management system that is incredibly efficient. This is because most of product data can be traced from the manufacturer, storage, and the store shelf. This effective supply chain system allows Walmart to save big amount of money because it can prevent losses from faulty product management. On top of that Wal-Mart introduced flexible regional warehouse system. Most Wal-Mart stores are located within a six hour drive of a Wal-Mart warehouse. To be more specific, Wal-Mart firstly builds the distribution center first and then builds stores around it which enable Walmart to keep low price. Besides WalMart, major retailer buys its products super cheap and volume of purchase is high for low cost so the bargaining power of suppliers is weak. Many suppliers depend on big retailer such as WalMart so Walmart is able to obtain product low price and the bargaining power of buyers is also relatively weak because customers have higher demand for low prices. In addition low operation and production cost – Walmart maintains low operation and production cost through offering low wages to its employees and renting place cheap area. Furthermore most of products are manufactured in countryside where labor cost is very cheap. Lastly it has great Cross-docking system. Walmart has its own transportation such as trucks which makes sure that all products are conveyed to its store directly through the distribution channel. Moreover by getting rid of other distribution channel Wal-mart is able to cut distribution cost down.