Submitted by: Submitted by daskk2009
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Category: Business and Industry
Date Submitted: 09/19/2013 07:57 AM
Business Strategy– Wal Mart case
What might explain Wal Mart’s performance over time in discount retailing ? Is it the industry or company specific factors ?
Wal Mart’s performance overtime in discount retailing is related more to company specific factors and less to industry factors.
Offering products at everyday low prices is only one of Wal-Mart’s many strategies. The company value chain helps identify activities associated with how Wal-Mart achieves their many strategies.
First, Wal-Mart’s supply chain management is extremely cost effective.
Merchandising
• Wal-Mart has been known to imitate competition’s successful merchandising concepts.
• Suggestions from all employees are expected and sometimes rewarded
• Store managers were given more latitude in setting prices than did centrally priced’ chains . Store managers priced products to meet local market conditions so as to maximize sales volume and inventory turnover while minimizing expenses.
• There existed a 2-4% pricing differential between wal Mart and its close competitors at most of the places
• They had a “ Satisfaction Guaranteed” policy , which meant merchandise could be returned to any store with no questions asked .
• Private label apparel made upto 25% of apparel sales.
Store Operations
• It set up stores only in locations where there is scope for future expansion.
• Another cost-effective method in Wal-Mart’s supply chain management is their ability to track the movement of products through the entire value chain. Whether the product is in shipment, in distribution center inventory, in-store inventory or on the shelf, or at the cash register, Wal-Mart can track it in real time.
• Their capability in streamlining supplies among stores and suppliers has helped them maintain appropriate inventory and track what sells and what doesn’t.
• Electronic scanning of uniform product codes. This ensured accurate pricing and improved efficiency.
• Installed a...