Wal-Mart Strategy Analysis
What are the key activities that Wal-Mart uses to create competitive advantage over its competitors? * Merchandising – Wal-Mart tailored merchandise offering to local markets through traiting to track product movements and focus on selling products that are higher in demand. Store managers were also given more latitude in setting prices to meet local market conditions. * Store Operations – Wal-Mart chose to build a store at a location where it could be expanded at a later date. Wal-Mart also used electronic scanning to improve communication between stores and distribution centers and for improved inventory analysis. * Distribution – Wal-Mart built their own warehouses, also distribution centers, to buy in volume at attractive prices and store merchandise, thereby minimizing inventory at storefronts. Wal-Mart uses cross-docking to transfer products directly from in-bound vehicles to store-bound vehicles. This enables products to be delivered continuously to warehouses and dispatched to storefronts without sitting in inventory. * Vendor Relationships – Wal-Mart eliminated manufacturer representatives from negotiations with suppliers. Wal-Mart also developed partnerships with suppliers by installing an electronic data interchange (EDI). This enabled the sharing information electronically with suppliers to improve performance.
Convenience of store locations
Tailored merchandising offering to local markets
Lower advertising expense
No 3rd party vendor reps
Ample inventory provided by cross-docking
Pricing tailored to local markets
Centralized distribution network
Inventory management among stores using EDI
Limited customer service
Providing Value to Customers
Draw a map that shows the interaction/interrelationship between Wal-Mart’s critical activities. Present it in a way so as to show how the competitive advantages create sustained profit differences.Low...
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