Walmart Case Study

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Case StudyI. Background and Situation Analysis
Executive Summary:
Walmart Inc, with its large economies of scale, is
renowned as one of the largest retailers in the United
States, and in the world. Recently, in line with its image of having the lowest-cost producers and suppliers, it has
decided to cut even more costs by making a commitment
to increasingly locally source its fresh produce from
domestic providers. As a result, this has vastly aided the
company in lessening shipping and storing expenses,
along with the probability of spoilage. Having local
suppliers is also strategic in helping them address
emergency shipments needed, which could result in
stock-outs should they not be fulfilled. This increasing
shift to “buying local” does not only provide benefits to Walmart in terms of less costs and fewer losses, but it
also gives them the competitive advantage of providing
fresher fruits and vegetables for many consumers.
On the side of its competitors, Kroger, with the same
strategy as Walmart, also prefers to have local suppliers
in order to lessen energy and fuel expenditures –
especially when it comes to storing and refrigerating the
products. Incidentally, Supervalu also uses local suppliers
that deliver 25-40% of their purchases. With all these in
mind, the problem for Walmart now arises when the term
“local” is not consistent in designation and meaning
among different grocery store chains and buying markets
– this has eventually resulted in much consumer criticism, as they feel, more and more that these retail chains are
leading false promotions and inducing misinformed
purchasing.

SWOT Analysis

Strengths
 Offers low cost and convenience shopping
 Relationship with suppliers
 Large purchasing power
Weaknesses
 Not as flexible compared to nicher competitors
 Lack of employee coordination and
management
 Some products tend to have low quality
Opportunities
 Expand operations in the European and Asian
regions
 Consumers becoming more health-conscious
and are changing their lifestyles
Threats
 Other low-cost competitors
 Economic fluctuations

II. Problem Statement (Objectives)
How can Walmart effectively communicate its
commitment of locally sourcing of products?
III. Target Market
Cost-conscious families and individuals from low- to
mid-income market segments characterize the primary
target market of Walmart. They are typical consumers
who appreciate the value of products they purchase,
and have lesser concerns for product branding. They
typically go in and out of the store to buy what they
need and would like to save money from what is left
after purchasing. With the global economic downturn,
Walmart and other supermarkets were able to expand
their consumer bases from lower class to middle class
consumers.
These days, the target market has had a growing
interest in healthy and organic foods. This is
associated to their increasing concern for their
wellness. They are very discerning in terms of
selecting and purchasing consumption goods –
especially organic ones. Quality and freshness of
products are their topmost considerations. In
addition, they not only have their personal needs in
mind, but most must also take their family’s nutrition
into consideration. Their perception about the health
benefits attributed to consuming “fresher” goods has
made them prefer locally produced fruits and
vegetables. They perceive that local produce would
offer more freshness as compared to products sourced
in other states. Aside from becoming more healthconscious, they are also becoming more socially conscious. The current economic state of U.S. has made
an impact in the consumer preferences. Americans
now seek for more “Americanized” products. They are
now patronizing locally produced goods rather than
imported ones. Local produce is increasingly being
more valued than goods being shipped from
neighbouring areas, and even countries. With...
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