Wal-Mart competitive advantage
6. To what extent is WM’s competitive advantage sustainable? * At the time discount stores were located within large towns, WM’s strategy was to put good-sized stores into little one-horse towns that everyone else was ignoring. * WM alternative was to build their own distribution centers so that they could buy in volume at attractive prices and store the merchandise. * WM earn the trust of their customers every day by providing a broad assortment of quality merchandise and services at everyday low prices (“EDLP”) so that their customers trust that the prices will not change under frequent activity. * WM introduced “Remix” system designed to reduce inventories, speed deliveries to stores, and eliminate stock-outs. WM ordered supplies on a 5-day rather than 4-week basis which would lead to lower inventories in distribution centers and retail stores. * Its “direct import” initiative involved, purchasing directly from overseas suppliers rather than through importers, and second, taking the control of import logistics. * In 2003 WM announced the adoption of radio frequency identification and became the leading pioneer of this technology. * Individual store managers were given considerable decision-making authority in relation to product range, product positioning within store, and pricing. Decisions over pricing and merchandising were made either at head office or at regional offices. * In 2008 WM changed their logo and redesigned their stores, the new logo looked organic, trying to say that they are an eco-aware company. * WM was a pioneer in applying information and communication technology. WM was among the first retailers to use computers fro inventory control, to initiate EDI with its vendors, and to introduce bar code scanning for point-of-sale and inventory control. * WM was pioneering the use of data-mining for retail merchandising. * WM’s web of information system extends far beyond the...
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