Case Analysis Of Wal-Mart

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Introduction Over the past decades, Wal-Mart has grown to become one of the largest retail stores in the world. They operate internationally and keep growing each passing year. They have developed some unique strategies that they have used allowing the company to grow into a multinational company. Various case studies and researches have sought to explain the success of this company over the years. Ken Mark from The University of Western Ontario conducted a case study on Wal-Mart and came up with some sound conclusions.
Wal-Mart’s Hub-and-Spoke Distribution Network
In management of costs for any particular business, any method that deems to cut down on costs is highly endorsed. This is in harmony with maximization of profits, which is the
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This initially began with warehouse-style stores in rural areas not easily accessible by most suppliers. This posed a great danger to Wal-Mart since most suppliers refused to transport their goods to these remote stores. The company decided to do this by themselves, that is, self-distribution by buying in bulk from suppliers and shipping the stock to the relevant stores.
As the purchasing power increased, the company slowly started eliminating the intermediaries by making physical appearances to offices by themselves. Locating the stores in low-rent suburban areas, that are close to major highways, ensured that they could build more stores at lower costs. Unlike their close competitor, Kmart, that placed its stores in prime urban areas, Wal-Mart’s network grew widely covering a lager geographical area. Thus, Wal-Mart is able to enjoy a larger customer base at lower costs compared to its other
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Each commodity’s price tag is displayed openly to allow easy and smooth shopping. Products are also shelved according to type to enhance fast identification of any product that a customer needs. The key principle of offering the best value at lowest prices is also achieved since the inception of Wal-Mart stores. This culture has been maintained from the beginning and it does not seem to dwindle even in the future. By offering customers best quality products at the lowest prices ensures constant customer visits to the stores as well as strengthened customer
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