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Operation Strategy Capturing market share with “everyday low price” strategy. “the process of creative destruction”. Responding competitors strategy. (opened “Pennies-n-Cents” stores in against dollar stores). Cultural adaptation. Training employees because people are key to Wal-Mart's business Buy at less to sell at less. Withdrawal strategy.
Competitive Strategy Different shop design for each demographic groups. All product in one store. Competence in use of information technology for logistics system. Highest customer satisfaction
Productivity Creating more than 210,000 jobs in the U.S. Saves working families more than US $2,500 per year. Discounting on food alone boosts the welfare of American shoppers by approx. $ 50 billion per year.
Industry Environment - Porter's five forces of competition
1.Rivalry of Existing Competitors: · Wal-Mart has a strong competitive advantage against its competitors Kmart and Target. · Rivalry in this industry is not as strong for the competitors compared to Wal-Mart.2.Barriers to Entry: · High because it is hard to form a large organization that will be competitive at the same size as Wal-Mart with such low prices.· This industry has high barriers because it is too expensive for new firms to enter and to be competitive.
3.POWER of Buyers:· Weak because basically the prices are low from the beginning so there would not be any potential for buyers to bargain with.4.POWER of Supplies:· Weak because Wal-Mart uses its own distribution centers that are located close to its stores. · Wal-Mart is also far and away the biggest customer of virtually all of its suppliers. It's scale of operation allowed it to bargain...
5. Substitutes:· Medium because it depends on where you live and what type of Wal-Mart stores are closer to you. · Substitutes would be going to another grocery store, a toy store, a hardware store; basically going to specialty stores instead of going to one store that has everything in one, as a Wal-Mart can.
A networked connection with store inventory with suppliers for inventory supply when needed.
Shop location Shop layout ShopSi z e Warehouse Si z e Warehouse layout
Product and Service Factor Price Sales Suppliers Every day low price. Lower price than competitors (price leadership). Lower price due lower operational cost.
Product and Service Factor Price Sales Suppliers Net Sales of walmart in 2009-2010 Wal-Mart U.S. $2 58.2 billion Sam’s Club $ 46 .7 billion Wal-Mart International $ 100.1 billion Worldwide Total $ 405 billion
Product and Service Factor Price Sales Suppliers
Partners with more than 2,5 0 0 minority-and women-owned business suppliers.
THE REASON! Efficient supply chain Deals with suppliers for e.g P & G Service Differentiation- different deals with different customers. Sets different service policies, such as service intervals, or delivery times, for different groups of accounts and often products. key to providing excellent, consistent service at a reasonable cost
Just in time (JIT) Lowers holding cost Lowers ordering cost Wal-Mart has made ordering small batches with greater frequency a profitable reality. R educes safety stock and EO Q R educes lead time
RFID Radio frequency identification Keep track of goods at any point in time, and also tells you where it is. Eliminates physical counting of inventory Is in line wit JIT. As soon as inventory levels go down, Walmart can re-order. Implemented in 2 0 0 5.
Why RFID ? Reduce the possibility of inventory shrinkage and out-of-stock situation. Improve fulfillment rates. Improve the customer service. Reduce inventory and labor cost. Eliminate many manual process and improve the operation efficiency.