Walmart Case Study Analysis

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For decades, Wal-Mart has held the title of the American retailer (although it is international) where people can get products for the lowest price possible. As the world’s largest retailer, Wal-Mart has been looked at as a role model for many competitors who desired the profits Wal-Mart has received in past periods. The founder, Sam Walton, began to design his stores in 1962 to the have everyday low pricing (EDLP) method, opposed to the popular at the time hi-lo pricing. Lucky for Walton, throughout the late 1900s there was a great trend in discount retailing—buying in bulk at a lower price, which EDLP catered to, making Wal-Mart the leading retailer. The firm also strides itself on its efficient strategies in its supply chain,…show more content…
That is, the distribution centers were always up to date on which stores were selling what, and which stores needed more inventory and what products they needed. Because of this, Wal-Mart stores were almost never out of stock for any product, and kept customers satisfied.
While Wal-Mart has been the leading retailer in the industry and has had many great strategies to keep up its competitive advantage, for the past decade competitors have been able to close the gap between them. Major competitors of the firm include Dollar Stores, Kmart, Sears, Costco, Tesco and Kroger. Amazon.com has become a major threat to Wal-Mart, with the convenience of online shopping many customers have switched over to ordering from Amazon.com than physically going in a Wal-Mart store and making the purchase. While Wal-Mart’s stock has been stalled at $45-55 per share, all of its competitors’ stocks have been increasing. Neuhausen states, “We’ve owned Wal-Mart stock for the past decade, and it’s been basically flat over that period. During the same time, we’d have made more money had we been invested in the S&P index of the largest 500 U.S. stocks… The data suggest that new competitors, especially the Dollar Stores, Amazon.com and Tesco are gaining in popularity in the United States” (Mark, 14).
It is imperative that Wal-Mart takes some sort of

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