The Growth of Walmart Stores

1007 Words5 Pages
Wal-Mart stores in 2003
Identify the issue
Wal-Mart stores, one of the most successful retailing chain in the world, has gain competitive advantage over its competitors. Thanks to his unique set of features, like its powerful IT system, its way of manage suppliers or its logistic system, Wal-Mart is able to responds quickly at demand changing, maintain low costs and satisfy its customers.
Framework used in analysis
The analysis will be conducted using the value chain framework in order to analyze the situation and activities that Wal-Mart currently faces. The different resources and capabilities will be organized and categorized according to the value chain. Therefore, it will be possible to find out the unique set of competitive
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Information sharing has been implemented since 1980 (EDI system, then forecasting, planning, replenishing, shipping application and huge investments in the Retail Link System). For them Wal-Mart remained the only source of real time data. This permitted Wal-Mart to have an exclusive relationship with suppliers (which eventually can increase Wal-Mart power). The IT system provides many information which helps Wal-Mart reduce stock outs and overstocking; so even suppliers are able to schedule manufacturing more efficiently. Moreover Wal-Mart is saving lots of money by developing cross-border suppliers (first of all China).
Firm infrastructure. Stores are one of the most important parts in Wal-Mart’s logistic system. Stores are originally located in rural area and still the mostly located in rural America compared with its competitors like Kmart and Target. Cost such as rent and maintenance can be saved to a great extent because of the location of the stores. And as the founder Sam Walton advocate frugality, the stores are arranged in a cheap and simple way. All these internally savings contribute to Wal-Mart becoming the cost leader in the industry.
Besides, under the cross-docking system, the goods are transferred from inbound truck to store-bound truck without even entering to the warehouse. The stock-holding cost is greatly reduced.
HR management issues. Wal-Mart emphasizes on treating employees as ‘associates’ and listen to their
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