Walmart Strategy Implementation Analysis

Strategy Implementation: Walmart’s strategy of cost leadership comes with an efficient management of resources at all levels. As said, operational efficiencies play an important role in helping Walmart achieve its “Everyday Low Prices (ELDP)”. The company applies reliable mechanisms and sophisticated technology apart from maintaining tightly knot supplier base and operations strategies. Efficiency in handling the inventory and product data, tracking and warehousing all play a part in implementation of the strategy. These methods help in a lot of money over millions of dollars.

The key aspects of strategy implementation are with respect to supply chain, culture and technology. Walmart follows a network based model wherein the stores are placed

Here, non-unionized drivers who drive the Walmart trucks can easily park their trailers while moving from one location to another. This helps in saving on routes as the trailers can then be transported as is to the required destination without any of the truck having to have an empty haul for a new way route. This strategy cuts costs, time and also helps in saving on inventory as the trailers are not inventoried. This strategy has helped Walmart save on costs heavily. This and a host of other strategies involving direct procurement and reducing links in the supply chain have helped in reducing distribution costs to just 1.7% of the cost of sales. This is significant over its other competitors Sears with 5% and K Mart with 3.5%

The Indian subcontinent is home to a rapidly expanding middle class which is seeing a steady rise in income levels. The economy is favorable and the reforms and regulations are being loosened. With only 8% penetration of organized retail in the country, Indian markets present a huge opportunity for Walmart to expand and diversify. Other factors include changing consumer preferences and urbanization. There is also a drastic rise in internet penetration. On the supply side, there is rapid real estate infrastructure development that is favorable for an organization like Walmart. Easier access to credit and increased efficiency along with happy investors have helped in putting up an interesting and promising note for Walmart. There is a rise in growth CAGR of 15% in the retail industry and over 10% in terms of consumers in organized retail. However, the country is also plagues by concerns of eroding small and medium level retailers and Kirana shops that form livelihood for many households. Other concern include regulations and FDI rules including getting 30% of products through MSMEs and small scale industries. Bureaucratic hurdles, Workforce related issues and concerns with –retailing also form some of the concerns for