Is Walmart Successful In The Us
1. Why is Wal-Mart successful in the US? What are Wal-Mart’s competitive advantages?
Wal-Mart is able to deliver the lowest possible price to their customers in a friendly environment focused on serving the customer’s every need. They effectively snuck into the retail shopping industry by opening stores in small towns where the population could buy everything they wanted at one place. Becoming the worldwide leader in sales for all companies does not happen without strong competitive advantages. Once Wal-Mart establishes itself in these small towns, they have taken over the demographic. All potential customers’ needs are fulfilled and competition is shut out. With the massive size of supply chain demanded to service thousands of stores, …show more content…
They are stricken with local, state, and national regulations that make it very difficult to achieve efficiencies. In China, the value-creating supply chain model from the US will not work. National infrastructure cannot handle the amount of travel required by Wal-Mart trucks and the roadways that can, charge as much as 10% of truck value in fees. Also, the extremely large Chinese population is broken into severely distinct demographics. In the small “one horse towns” Wal-Mart would usually target, customers cannot even afford a bottle of shampoo and only buy day-to-day necessities. In Larger cities, the distribution of wealth is still enormous but customers shop for items on a whim. The Chinese people will visit stores as much as every day and usually buy very little, if at all. The intense competition of local and international chains makes the market very difficult and local protectionism decreases returns for foreign investors. With very little to incentivize associates, Wal-Mart is unable to effectively create the US culture that emanates in all aspects of operations. Wal-Mart cannot keep costs down and deliver best value to the Chinese consumer because of a combination of issues outside of their control. Their supply chain model is rendered ineffective and they are forced to buy from thousands of local suppliers. The cost per customer is much higher and large market share cannot be achieved. They will not be able to replicate their domestic model and be effective in
Wal-Mart is able to deliver the lowest possible price to their customers in a friendly environment focused on serving the customer’s every need. They effectively snuck into the retail shopping industry by opening stores in small towns where the population could buy everything they wanted at one place. Becoming the worldwide leader in sales for all companies does not happen without strong competitive advantages. Once Wal-Mart establishes itself in these small towns, they have taken over the demographic. All potential customers’ needs are fulfilled and competition is shut out. With the massive size of supply chain demanded to service thousands of stores, …show more content…
They are stricken with local, state, and national regulations that make it very difficult to achieve efficiencies. In China, the value-creating supply chain model from the US will not work. National infrastructure cannot handle the amount of travel required by Wal-Mart trucks and the roadways that can, charge as much as 10% of truck value in fees. Also, the extremely large Chinese population is broken into severely distinct demographics. In the small “one horse towns” Wal-Mart would usually target, customers cannot even afford a bottle of shampoo and only buy day-to-day necessities. In Larger cities, the distribution of wealth is still enormous but customers shop for items on a whim. The Chinese people will visit stores as much as every day and usually buy very little, if at all. The intense competition of local and international chains makes the market very difficult and local protectionism decreases returns for foreign investors. With very little to incentivize associates, Wal-Mart is unable to effectively create the US culture that emanates in all aspects of operations. Wal-Mart cannot keep costs down and deliver best value to the Chinese consumer because of a combination of issues outside of their control. Their supply chain model is rendered ineffective and they are forced to buy from thousands of local suppliers. The cost per customer is much higher and large market share cannot be achieved. They will not be able to replicate their domestic model and be effective in