Wal-Mart Stores Inc.: Dominating Global Retailing

1218 Words Mar 19th, 2012 5 Pages
Wal-Mart Stores Inc.: Dominating Global Retailing
The retail industry in the U.S. has become saturated, and the market is control by a few big retailers. They all offer very similar products, so the differentiating factor are usually quality and price. Competitive advantage comes from innovative strategic thinking, funds to buy other competitors, and impeccable execution. In addition, the global economic crisis has increase customers’ price sensitivity, and has put more pressure on retailers.
In the past, when Wal-Mart was confronted with threads and challenges, it was forced to innovate. From the beginning, Mr. Sam Walton realized that the discount retailing concept would be profitable and presented this idea to his boss. After not
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Wal-Mart uses Retail Link, an inventory system that allows it to communicate with suppliers and track purchase orders, inventories, invoices, and payments while collecting real time information about consumers. This information is later used to launch promotion and market analysis, which not only benefits Wal-Mart but also its suppliers. Full transparency allows suppliers to analyze customer preferences and predict inventory for the next several months. Wal-Mart also offers advice to it suppliers about points of cost controls and efficiency.
Moreover, Wal-Mart developed its own fleet of trucks. This is not such a powerful competitive advantage because many of its competitors also have their own fleets. However, Wal-Mart has developed a cross-docking and backhauling system sets them apart from its competitors. Cross-docking consists on having loading docks in both side of the building. While one side receives the merchandise from inbound trucks, on the other side, outbound trucks are being loaded to deliver the same merchandise to the store. Much of the seasonal items do not stay in the warehouse for more than 10 minutes. This helps them to be efficient and lower costs related to inventory. The second part of this strategy is backhauling. Empty trucks returning from the store stop at manufacturers to haul inventory back to the warehouse. Suppliers pay a fee to Wal-Mart for using its distribution system helping both companies to

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