Walmart S Cost Leadership
walmart's cost leadership/Broad market strategy WALMART'S STRATEGY
Basis for Customer Value lowest cost
Broad Market
Target
Market
Who:
Determining the customers to serve
1.Wal- Mart ensures that it positions itself strategically in the market by offering products that meet the needs of all the population segments.
2.Wal- Mart’s target marketing has been based on the fact that different age groups’ demands are catered for sufficiently What:
Determining which customer needs to satisfy
•before 2006: always low price
•after 2006: save money ,live better
How: Determining core competencies necessary to satisfy customer needs
Core competencies
1.Low Cost Operations
2.Culture:
Wal-Mart’s employees are hardworking, efficient, and process oriented.
3.Distribution
Wal-Mart operates an unrivaled global network of 146 distribution centers . Because of this, the trickle-down effect happens. Trucks do not have to travel long distances to make deliveries which helps to reduce time for delivering
5 competitives forces on walmart
Rivalry with existing competitors
1.Having the low-cost position is valuable to deal with rival ,rivals hesitate to compete on the basis of price
(entry barriers)
2.Case of Costco and Dollar Amazon (cost advantage)
Walmart: cost advantage entry barriers
Bargaining power of buyers(customers) powerful customers can force a cost leader to reduce its prices ,but not below the level at which the codt leader's next-most-efficient industry competitor can earn average returns P103 ananlysis: As a number of firms is increased,abundance of groceries firm in this industry,and that lead to the result of the buyer's power is more and more powerful.but in this industry,buyer always have low bargaining powers, so it is more important to bring more values to attract them,because they have many options.
Bargaining power of suppliers
1.cost leader may be able to force its suppliers to hold down their price but it can not gain the best good price
relative
Basis for Customer Value lowest cost
Broad Market
Target
Market
Who:
Determining the customers to serve
1.Wal- Mart ensures that it positions itself strategically in the market by offering products that meet the needs of all the population segments.
2.Wal- Mart’s target marketing has been based on the fact that different age groups’ demands are catered for sufficiently What:
Determining which customer needs to satisfy
•before 2006: always low price
•after 2006: save money ,live better
How: Determining core competencies necessary to satisfy customer needs
Core competencies
1.Low Cost Operations
2.Culture:
Wal-Mart’s employees are hardworking, efficient, and process oriented.
3.Distribution
Wal-Mart operates an unrivaled global network of 146 distribution centers . Because of this, the trickle-down effect happens. Trucks do not have to travel long distances to make deliveries which helps to reduce time for delivering
5 competitives forces on walmart
Rivalry with existing competitors
1.Having the low-cost position is valuable to deal with rival ,rivals hesitate to compete on the basis of price
(entry barriers)
2.Case of Costco and Dollar Amazon (cost advantage)
Walmart: cost advantage entry barriers
Bargaining power of buyers(customers) powerful customers can force a cost leader to reduce its prices ,but not below the level at which the codt leader's next-most-efficient industry competitor can earn average returns P103 ananlysis: As a number of firms is increased,abundance of groceries firm in this industry,and that lead to the result of the buyer's power is more and more powerful.but in this industry,buyer always have low bargaining powers, so it is more important to bring more values to attract them,because they have many options.
Bargaining power of suppliers
1.cost leader may be able to force its suppliers to hold down their price but it can not gain the best good price
relative