Wal-Mart C A S E:

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Agenda The Key Success Cross Docking System

The Key Success

Cross Docking System

The Key Success Culture of service excellence The “Greeters” who welcome and service customers Human Resources System Stock ownership and profit sharing The motivational power for its employees Allowing employees to own part of the business The strategy of “Everyday Low Prices” Offers a better deal and saves on merchandising and ads costs Economies of Scale Wider choice of merchandise

Culture of service excellence

The “Greeters” who welcome and service customers

Human Resources System

Stock ownership and profit sharing

The motivational power for its employees

Allowing employees to own part of the business

The strategy of “Everyday Low Prices”

Offers a better deal and saves on merchandising and ads costs

Economies of Scale

Wider choice of merchandise

The Key Success (cont’d) Starting point of achieving this success is a persistent focus on damn satisfying the customers needs Provide customer access to quality good Availability of products Cost structure which enables competitive pricing Trust worthiness  build relationship with customer The technique used in achieving this key success called “cross docking” Cross docking enables Wal-Mart accomplished the economic of scale and at the same time minimizing the inventory cost depth

Starting point of achieving this success is a persistent focus on damn satisfying the customers needs

Provide customer access to quality good

Availability of products

Cost structure which enables competitive pricing

Trust worthiness  build relationship with customer

The technique used in achieving this key success called “cross docking”

Cross docking enables Wal-Mart accomplished the economic of scale and at the same time minimizing the inventory cost depth

Cross Docking System Benefits: Reduces Wal-Mart cost of sales Reducing the excess inventory Sales prediction Everyday low prices Reducing the promotion expense Barriers: Huge investment Hard in adopting Management complexity Continuous contact among each department: Distribution Center Suppliers Every point of sales in every stores Operation of private satellite-communication system Responsive transportation system

Benefits:

Reduces Wal-Mart cost of sales

Reducing the excess inventory

Sales prediction

Everyday low prices

Reducing the promotion expense

Barriers:

Huge investment

Hard in adopting

Management complexity

Continuous contact among each department:

Distribution Center

Suppliers

Every point of sales in every stores

Operation of private satellite-communication system

Responsive transportation system

Mapping Capabilities: Inventory Replenishment at Wal-Mart Suppliers Payment Terms Retail Stores DC Suppliers Trucking Fleet Corporate HQ Satellite Com Private Aircraft Video Conferencing

Mapping Capabilities: Inventory Replenishment at Wal-Mart The Process Good payment term to the whole process inside of Mapping Capabilities Enables suppliers to respond quickly the sales data Data are gathered from stores, distribution centers Distribution centers deliver new order in less than 48 hours Store managers share best practices The result: link business process that give Wal-Mart its competitive edge.

The Process

Good payment term to the whole process inside of Mapping Capabilities

Enables suppliers to respond quickly the sales data

Data are gathered from stores, distribution centers

Distribution centers deliver new order in less than 48 hours

Store managers share best practices

The result: link business process that give Wal-Mart its competitive edge.

Four Basic Principles of Capabilities-Based Competition The building blocks of corporate strategy aren’t products and markets but business processes. Competitive success depends on transforming Wal-Mart’s key processes into strategic capabilities that consistently provide superior value to customer. Wal-Mart creates this capabilities by making strategic investment in a support infrastructure that links together. Because capabilities necessarily cross function, the champion of capabilities-based strategy is the CEO

The building blocks of corporate strategy aren’t products and markets but business processes.

Competitive success depends on transforming Wal-Mart’s key processes into strategic capabilities that consistently provide superior value to customer.

Wal-Mart creates this capabilities by making strategic investment in a support infrastructure that links together.

Because capabilities necessarily cross function, the champion of capabilities-based strategy is the CEO

Five Dimension CEO’s success in building and managing capabilities will be depend on company that combine scale and flexibility to out perform the competition along 5 dimensions: Speed: the ability to respond quickly the customer and incorporate new ideas and tech quickly into products Consistency: the ability to produce product that satisfies customer’s expectation Acuity: the ability to see competitive environment and thus to anticipate and respond to customer’s evolving needs and wants. Agility: the ability to adapt simultaneously to many different business environment. Innovativeness: the ability to generate new ideas and to combine existing elements to creates new sources of value.

CEO’s success in building and managing capabilities will be depend on company that combine scale and flexibility to out perform the competition along 5 dimensions:

Speed: the ability to respond quickly the customer and incorporate new ideas and tech quickly into products

Consistency: the ability to produce product that satisfies customer’s expectation

Acuity: the ability to see competitive environment and thus to anticipate and respond to customer’s evolving needs and wants.

Agility: the ability to adapt simultaneously to many different business environment.

Innovativeness: the ability to generate new ideas and to combine existing elements to creates new sources of value.

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