An assignment prepared for the purpose of analyzing the four building blocks of Walton ( Refrigeration Department) 1) Achieving Superior Efficiency 2) Achieving Superior Quality 3) Achieving Superior Innovation 4) Achieving Superior Customer Responsiveness

1. ANALYZING THE BUILDING
BLOCKS
Competitive Advantage

2. An Assignment
On
Analyzing Building Block of
WALTON BD Ltd.
Prepared for
Nasrin Akter
Assistant Professor,
School of Business & Economics
Prepared by
Name ID
Md. Ismail Hossen 111 131 394
Fatema Falguni Sumona 111 131 164
Khurshida Akhter 111 131 229
Sec: ‘F’ (MGT 4356)
Date of Submission: January 2, 2017
United International University

3. Achieving Superior Efficiency
Economies of Scale
1) Walton has the ability to Reduce their cost per unit basically after producing
2200-2500 units of Refrigerators per day. After that every extra refrigerator
reduces their total cost of per refrigerator.
2) Also they were able to spread their cost of production using Production Process
System which reduces their total time of production of a refrigerator. The reduced
time increases the productivity and ultimately reduces the total cost per
refrigerator.
3) Division of Labor is also presentin their manufacturing line whereoneemployee
is assigned to complete a specific task everyday making him more efficient on that
particular task. For example: an employee responsible for ‘Foaming’ the
refrigerator will be assignedto do that daily. Rotation occursaftera certain period
of time.
Efficiency & Learning Curve
1) Efficiency and Learning occursintheir assembly line where the ultimate product
is combined together. They have different departments to produce for each of the
core parts of the Refrigerator. Finally, all the different parts are brought together
to assemble and while assembling they can skip a few steps like pre-installing the
nut bolts to specific items of the refrigerator.
Efficiency & Experience Curve
1) In case ofthe Bulk Production ofthe Refrigerator theunit costof the Refrigerator
is reduced.This usually occurswhenthe productionexceeds2200-2500units. The
most efficiency occurs in Pre-Eid seasons where the production maximizes and
cost is minimized in per unit of production.
Marketing Strategy
1) The core fact in their marketing strategy is the estimation of the Price that to be
charged for each unit. The price is set to create the base of their Marketing Mix.
Usually the price is estimated using the historical data of their Production.
For Example: Before Pricing their Refrigerators in Pre-Eid season they first
identify how much units can be sold and now they are expecting 300,000 units to
be sold this Eid-Ul-Adha then they will likely to reduce the price to attract the
interested customers.
2) Now, as the price has been set they will not directly reduce the Price rather they
will Go for Sales Promotion to support their pricing strategy. Now the Product
Placement will be in their Showrooms as well as many distributors front line
where its most visible. Finally Sell Quality Products to support the price of the
product.

4. 3) Now as a result of the Integrated Marketing they tend to attract more customer
to their show rooms which increases their overall sell.
4) Defection rate is rather low due to the fact that Refrigerator is purchased for a
long time period as a result they don’t particularly measure how much customer
are purchasing again. But they have a different system Rate of Reference
Purchasewherethey measurehow many customersarePurchasingtheir product
through Reference which then shows them the No. of new customers they are
getting as result of previous sells.
Material Management
1) In caseofthe Material Management they follow the Just in Time (JIT) system which
reduces their overall cost for Inventory due to the fact that required inventory is
received whenever these are needed. All types of Material needed is calculated
throughforecastingona monthly basis which is given to suppliersso that they can
be Pro-active while suppling the Inventory.
Achieving Superior Quality
1) Quality as Reliability: They Promote their product as a great combination of
Price and Quality. Also with the lower price quality is never compromised and
good quality is always ensured.
a. Now they are producing their own compressors which they are going to
use for their own refrigerators as well as export to south Asian countries.
The international demand indicates the quality of the product is reliable.
b. They also have focus on the customer needs. Customers want a quality
product with lower price and their statement on quality reflects how they
are putting their customers need first.
c. Their products are designed for the Ease of Use of the product. All the
products are ergonomically designed and user friendly with no complex
task required to use the product.
2) Quality as Excellence: They have also managed to achieve excellence in the
quality through their Design, Durability, Special Features.
a. Design: Walton Refrigerators are available in various design and all the
design is well developed and detailed. Well the quality of their design and
styling oftheir refrigerator is oneofthe reasonthecustomersare attracted
towards it.
b. Durability: They are quite confident in the durability of their product and
expect that products will around 10 years or more. Not only that, their
Warranty in various stages shows that the product is quite durable. For
example, they provide a 10-year warranty on the main parts of the
Refrigerator which indicates that they areconfidentthat the main parts are
to last around 10 years.
c. Special Features: Walton is also quite confident in their special features of
the Refrigerators and continues to brings new attributes to the latest
refrigerators. Some of the special features are Intelligent Inverter

5. Technology, Ecozen no frost technology, Nano Health Care, DECS longer
enduring cooling system.
Achieving Superior Innovation
Walton has a lot of spending in Research & Development and based on their analysis they
areoneofthe companies in SouthAsia with highest investment Research&Development.
But they are yet to achieve new product development. The research is mainly done right
now on the competitors of the product and try to produce their product in better way
than the competitors. Also they are now producing many parts within the company and
plans to export products to foreign countries which represents their future innovation
potential.
Achieving Superior Customer Responsiveness
1) Focus on Customer: They have customerin the focus oftheir strategy andto live
up to the expectations of the customer and deliver the product with quality. They
have set up Service centers in all 64 districts of Bangladesh so that customers can
easily reach the service center for help
2) Corporate Visit: Also to demonstrate the and prove the customer of the
Corporate levels they arrange yearly internal visit programs where the Business
Customers are invited and see the production for themselves.
But, the overall customer responsiveness is not up to their expectation as well to
the customers due to the slow response time by the firm. It usually takes longer to
repair products and supports centers are not very good also. Main reason for this
problem is the lack of skilled employee in the service department as well as high
turnover rate in the service centers.
Competitive Advantage
Now after analyzing all of their building blocks it can be seen that they are much more
focused in producing and delivering products of the industry standard and pursuing a
low cost strategy to create a value for the customer. The putting more focus in achieving
the efficiency rather than the innovation which given them the edge to pursue the low
cost strategy and differentiation is not seen much in their product. So basically now their
most important building block is achieving superior efficiency and then ensuring the
Superior Quality of their product.
“Great combination of Price and Quality” So, what we can analyze that they are
able to produce quality products which has the capability to perform at the same level of
their competitors but can purchased for a much lower cost than of the competitors which
makes them a successful low cost strategy pursuer.