Business Strategy Walmart Case Study

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...