I. Introduction
Wal-Mart is a world-wide active American retail trade company and currently the largest retail company in the world. Beginning in 1962, Wal-Mart has made the transition from a small firm in Arkansas to the largest employer with 3, 800 store units in the United States with record revenues today. But nevertheless, since Wal-Mart launched its online branch, it had to suffer from substantial setbacks from competitors such as Amazon.com or Ebay.
The intention of this case study is to evaluate Wal-Marts.com's profitability of success regarding its situation in 1999.
II. Discussion Questions
II.1 What is the impact of Wal-Mart.com on customer-borne transaction costs?
Wal-Mart's business philosophy is based on the simple
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II.2 Do you think that Wal-Mart.com is likely to create additional value?
Applying our knowledge about Economics of Strategy, we know that there are different ways to create additional value:
(1) To lower production costs or producer transaction costs. Wal-Mart.com is able to lower production costs due to the fact that the number of employees, rent and advertising costs will be respectable lower for the business online than for a discount store. Instead of intermediate warehousing, Wal-mart.com will directly deliver the ordered number of products and in this regard lower its producer transaction costs, which will shift its supply curve to the right, causing a right shift of the demand curve as well.
(2) By implementing policies to reduce consumer transaction costs, for example, lowering the expenditure of time of customers and other possibilities as discussed above, resulting in a shift of the demand curve to the right and
(3) by taking actions other than reducing consumer transaction costs and through devising new products and services. Wal-Mart.com will offer products from all 25 categories you can find in a regular Wal-Mart store. To create additional value, it will offer a richer choice of high quality products, for example DVD players and cameras. But not only will it offer these higher-priced items, it will also offer them as complements, which means that Wal-Mart.com for example will sell DVD players with a set of the latest DVDs.
Working together with
1) Should Wal-Mart be expected to protect small businesses in the communities within which it operates?
Wal-Mart Stores, Inc. (or Walmart as written in its new logo) is an American public corporation that runs a chain of large, discount department stores. It is the world's largest public corporation by revenue, according to the 2008 Fortune Global 500.[5] Founded by Sam Walton in 1962, it was incorporated on October 31, 1969, and listed on the New York Stock Exchange in 1972. It is the largest private employer in the world and the fourth largest utility or commercial employer, trailing the British National Health Service, and the Indian Railways. Wal-Mart is the largest grocery retailer in the United States, with an estimated 20% of the retail grocery and consumables business. It also owns and operates the North American company, Sam's Club.
4. Relations with Suppliers- Wal-Mart has in place a system that helps to achieve their goal of lower prices. This Information Technology system includes computers, networking, and internet that cuts inventories and waste and helps with speedy delivery. This system also helps Wal-Mart to keep in constant contact with suppliers by transferring the data that suppliers need so they know what Wal-Mart needs. Wal-Mart also works with suppliers to improve their production and squeezes the best prices out of its supplier. The video referred to Wal-Mart as the customer’s agent. All of this focus Wal-Mart puts on suppliers reduces costs and lowers prices. Wal-Mart’s technological/logistical leadership remains unmatched by competitors (Web, 2005).
Wal-Mart also teaches manufacturers to be more cost-effective so product prices can stay down. For example, Wal-Mart might suggest that a supplier cut its labor costs by shipping toasters in their cartons, rather than packing them in bigger boxes and
With around 5000 retail outlets worldwide, operating in more then a dozen countries and with over US$286 billion in annual sales, Wal-Mart is the top retail chain and number one fortune 500 company in the world. Wal-Mart is the top employer in the U.S. with 1.3 million employees, “the company accounts for 9 cents of every US retail dollar and sells around 20 per cent of the nation’s groceries and pharmaceuticals.” (Times News Network).
Wal-Mart plans to work closer with their local and national suppliers to provide a direct access to their products as well as to help the under budgeted consumer afford the necessary needs for their families. Throughout the United States, Wal-Mart has went under plenty of reconstruction in order to help the customer feel comfortable shopping while they are looking for their specific needs. Heavy relocation of multiple products helped categorize their services to enhance the consumer from not searching everywhere for certain items.
In the future Wal-Mart Stores Inc. will continue to expand and respond to growing technology. Improving efficiency will enable us to provide products to all of our customers at everyday low prices.
Productivity is very important to any successful business. Wal-Mart has increased its productivity through many different advances. Business analysts have long admired Wal-Mart's logistics management, even though the public recognizes them for their low discounted prices. Wal-Mart has always been resourceful at moving and stocking goods, building its stores as branches around distribution center hubs. But, instead of simply
Some of the opportunities that Walmart has, is being capable to keep the prices low, keeping the highest rating among their competitors, for example, Target. This is possible since they are able to buy directly from the vendors avoiding the intermediary and buying in bulks. Another opportunity that Walmart is concerned about is the environment; keeping this in mind Walmart is working in green initiates that follow three steps, “create zero waste, operating with 100% renewable energy and selling products that sustain our resources and the environment”. In order for Walmart to compete with the new era, they started to grow fast in online shopping, giving the customers the opportunity to choose to deliver to their homes, or they can go and pick
Wal-Mart is a chain of large departmental stores all over the United States and it is a Multinational corporation. It is the biggest private employer and the second largest public corp. Wal-Mart was found in 1962 by Sam Walton and to this day it is a family owned business. Wal-Mart’s headquarters are located in Bentonville Arkansas. Some of the countries Wal-Mart’s operates in under different names are Mexico, United Kingdom, China, India, Canada, Argentina, and Brazil.
Wal-Mart is a successful retail corporation that is known worldwide. The retail company has created economic benefits for consumers that are extremely tremendous. Wal-Mart has provided more choices for consumers at lower prices in communities where local retail monopolies were evident prior to this retail chains arrival. This company operates their retail stores in numerous formats worldwide. Their commitment is saving people money so they can have better lives. With that being said, we will begin by analyzing Wal-Marts environment
Wal-Mart was founded in 1962 by Sam Walton in Roger, Arkansas. Wal-Mart has 4,100 stores and clubs in the U.S. and a total of 7,300 unit’s world wide. It employed about 2 million associate’s world wide and approximately 1.4 million in the United States. Wal-Marts average annual total revenue rate was slightly more than 10% for the three years from the fiscal year ending 2006 to the fiscal year ending 2008. They also had a stock split of 100 %; they saw this split 11 times during the periods of 1971 through 1999. They have received numerous awards and were ranked 5th in Fortune magazine’s “Global Most Admired All-Stars” as the third most admired company in America (Wal-Mart, 2008).
Wal-Mart use telecommunications to link directly from their stores to their central computer system and from that system to its supplier’s computers. This allows automatic reordering and better coordination. Knowing exactly what is selling well and coordinating closely with suppliers permits Wal-Mart to tie up less money in inventory than many of their competitors.
Walmart serves nearly 260 million customers weekly across 27 different countries, both in stores and through its websites (“Fortune”, 2015). Walmart relies heavily on its proper and effective marketing strategies; Walmart would not be able to achieve the level of success without these strategies. Low prices, easy access for its customers, and social media campaigns are a few of the vital tactics Walmart has used in its marketing plan. “Save Money. Live Better” is Walmart’s mission in delivering customers products at the lowest prices. This low price strategy plays a marketing role that caters to customers who seek the lowest prices and with grocery stores that provide great deals (Brown, 2017). Walmart’s low cost business model is protected by its powerful supply and distribution chains throughout the world. Customers can expect the same cost efficient style in every Walmart store worldwide.
Yes, I do believe Wal-Mart is doing enough to become more sustainable. Wal-Mart is one of the most powerful companies internationally. As with all things that come with power, Wal-Mart’s business practices are scrutinized thoroughly. This includes their relationships with suppliers, employees, consumers, and the environment. In recent years, the environment has become such a big issue that Wal-Mart, as well as other companies have had to respond to this growing concern.