It is believed that Wal-mart respect the idea of makes their customer shopping decision based on price comparison, experience and accessibility. What they could improvise is to come out with more plans with supplier to lower the products price so as to compete with their competitors. If Wal-mart is able to earn the profits by selling lowering their prices, so do their competitors. (Gallagher, S., 2008)That’s is why all along, Wal-mart always focus on this factors to attract more customers and also to prevent from losing their loyal customers. Due to the world is changing every minute in our life, there are many things that Wal-mart need to take note of.
The company was among the first retailing firms across the globe to centralize its distribution system using the hub-spoke system. The system has enabled Wal-Mart to enjoy substantial cost advantages (Walmart, 2017). Additionally, the remarkable growth of the company over the years is largely attributed to its reduction of costs through its other efficient and effective supply chain management practices. The strengths of the supply chain are discussed in the successive parts of this paper. Making Investment in Emerging Technology Wal-Mart has heavily invested and continues to invest in communications and IT systems to successfully track merchandise inventories and sales in its stores across the areas that it operates.
This has helped Walmart to become a dominant retailer in the global arena. With the rapid increase and evolving of technology Walmart continues to focus on innovative processes and systems to improve its supply chain and achieve greater efficiency. Conclusion The evolution of Walmart’s supply chain includes three elements, according to an Arkansas Business article: distribution practices, operating its own fleet of trucks and technology. Benefits from its supply chain efficiency result in time savings, more cost-effective inventory management and improved product forecasting. Walmart demonstrates the complementary use of lean and agile design principles hand in hand when designing a supply chain that is highly efficient while Walmart uses inventory optimization and transportation optimization processes to reduce the costs (lean), it also uses cross-docking to actively respond to the latest store demand (agile).
Through this model, investors have an opportunity to evaluate the market position of the company through is effective and strong performance. Strengths Globally recognized – Wal-Mart has been in the retail business since the year 1962, and most of its efforts are dedicated to ensuring that it provides quality products to their customer and this has made them be a global brand. As a result, the strong market position of the company is its main strength. Competence in technology – Wal-Mart has effectively and efficiently managed to integrate technology in most of its operations. Competence in information system has enabled the company to establish a successful supply chain and logistics thus, saving a significant amount of cost to manage its inventory levels, sales and other crucial information and data.
Also, its size allows the company to advantage from economic of scale, which in time conduce to a lower price of products for the final consumer. 22.214.171.124. Wide range of products The retailer sells a bigger variety of products than any of its retail competitors. Grocery, health and wellness, apparel, entertainment, electronics and so many other products are sold in its shelves. Also it is remarkable the fact that Wal-Mart sell both, brand products and own label products, that are even cheaper.
Then it can achieve economies of scale. Second resource of economies of scale may be increased productivity of variable inputs, such as specialization of labor and efficiencies in energy usage. The corporation has different groups of people specialized in customer service, inventory control, purchasing and many other areas of the field. The inventories in Wal-Mart has established a specialized distribution channel that was not easily matched for its competitors. The company developed the ability to distribute its merchandise from a vast network of distribution centers served by a private truck fleet.
Cost leadership has been the best competitive advantage of the retailer during so many years but it is also important the strategy followed by Wal-Mart when targeting the market. Its income are implemented in stores to keep follow of customers’ purchases lifestyle and so adapt the products offered into the specific need of that part of the market(Down, 2008). The successful leadership of Wal-Mart upon time made the company able to increase its sales since it was founded in 1962 in Arkansas(Asea,2005). But it growth began to decrease in 2008 when it was faced by a long list of critics(unions, human rights organizations, religious groups, environmental activists, community organizations, small business groups, academics, children’s rights groups, institutional investors) who considered that Wal-Mart represents the worst aspects of 21st-century capitalism and that it symbolizes a system of increasing market penetration and decreasing social regulation, where more and more aspects of life around the world are subject to economic competition(Amn,2004). They see that Wal-Mart’s accomplishment rests upon the incomplete damage of social power in favour of corporate power and that it takes advantage of the conditions of the neo-liberal world, from the availability of instant and inexpensive global communication to the continuing collapse of agricultural employment around the world to the rapid diffusion of technological innovation to the oversupply of subjugated migrant labour in nearly every country to the continued existence of undemocratic and corporate-dominated governments.
• Domestic markets moving towards saturation • Domestic market (US) accounts for a small percentage of world’s population. • Walmart perception was discount retailing is essential for the developing economies and hence they achieve the double digit growth rates Advantages • Leverage local buying power with US based MNC’s. • Utilize competencies of efficient store management, technology & logistics. When Walmart expanded
Competitive Advantage As per Supply Chain Digest, Walmart, the giants in their field of retail industry stocks products which are made in more than 70 countries and at any given time they operate more than 11,000 stores in 27 countries around the world and manages the average inventory of $32 billion. The complete organisation is committed to a business model of driving costs out of supply chain to enable consumers to save money and live better. The company viewed on developing and enhancing cost structures that allowed it to offer low everyday pricing, which led Walmart to concentrate on developing a more highly structured and advanced supply chain management strategy to exploit the competitive advantage. (Walmart Annual Report 2014) Business