Wal Mart Supply Chain

4290 Words Jan 7th, 2013 18 Pages
Wal-Mart IIIInc IiInc.

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Wal-Mart
Executive Summary
With over US$444 billion in 2012 sales from operations in 27 countries, Wal-Mart Stores, Inc. is the world’s largest retailer. Wal-Mart is the world’s third largest public corporation, according to the Fortune Global 500 list in 2012 and world’s biggest private employer with 2.2 million associates worldwide. Wal-Mart serves customers and members more than 200 million times per week. Wal-Mart operates under 69 different banners. Wal-Mart’s supply chain, a key enabler of its growth from its beginnings in rural Arkansas, has long considered by many to be a
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In the general merchandise area, Wal-Mart’s competitors included Sears and Target, with specialty retailers including Gap and Limited. Department store competitors included Dillard, Federated and J.C. Penney. Grocery store competitors included Kroger, Albertsons and Safeway. The major membership-only warehouse competitor was Costco Wholesale.
The Development of Wal-Mart’s Supply Chain
Before he started Wal-Mart Stores in 1962, Sam Walton owned a successful chain of stores under the Ben Franklin Stores banner, a franchisor of variety stores in the United States. Although he was under contract to purchase most of his merchandise requirements from Ben Franklin Stores, Walton was able to selectively purchase merchandise in bulk from new suppliers and then transport these goods to his stores directly. When Walton realized that a new trend, discount retailing — based on driving high volumes of product through low-cost retail outlets — was sweeping the nation, he decided to open up large, warehouse-style stores in order to compete. To stock his new warehouse-style stores, initially named “Wal-Mart Discount City,” Walton needed to step up his merchandise procurement efforts. As none of the suppliers were willing to send their trucks to his stores, which were located in rural Arkansas, self-distribution was necessary.
The initial competitive advantage for Wal-Mart was its supply chain management. As Wal-Mart grew in the 1960s to 1980s, it benefited
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