Strategic Analysis Of Wal-Mart's Supply Chain Management

As Johnnie C. Dobbs, Wal-Mart can be seen as an efficient company in means of its supply chain management. As a start, Wal-Mart’s core strategy is based on its leadership in the cost domain where it tries to decrease its costs as much as possible compared to its competitors. It targets a wide range of customers by providing high volume-low cost products. Through the ability to power its cost drivers, Wal-Mart leads its competitors in means of cost and persistently tries as much as possible to saturate these costs in the supply chain. Wal-Mart’s supply chain has developed in many different areas to prove its efficiency over the years. In means of Wal-Mart’s purchasing power, Wal-Mart made sure to work directly with its suppliers especially those
This turndown started to show up by the beginning of 2006 when their competitors started to catch up with them. For example, all the technological strategies invented by Wal-Mart such as bar codes, shared sales data with suppliers and in-house trucking fleets were now being adopted by all their competitors. Despite the different strategies that the new executive vice-president implemented, the outcome was the same in each time where copying was the solution of the competitors. In other words, the lack of the sustainable competitive advantage is the major problem Wal-Mart was facing and he had to solve. For instance, when it came to distribution strategies Wal-Mart created the “hub-and-spoke” design where a high volume distribution centre works for a bunch of stores that was shortly copied by his competitors as well. Moreover, the competitors didn’t stop here for they also imitated Wal-Mart’s ability to share information with his suppliers through Retail Link by developing “Retail Interface” which is a similar project to the first one that collects the level of sales that could be shared with the
All of these reasons caused Wal-Mart stores to struggle in the U.K (especially ASDA) that started to fall behind its competitor Tesco that was proving its strong market presence. Yet, the painful strike that Wal-Mart got was them pulling out from South Korea and Germany in May and August 2006 respectively. Wal-Mart lost its stores in South Korea where they were sold to the country’s biggest discount chain (one of its major competitors in that market), and exited the German market due the strong presence of his competitors Target Stores and Costco that were manipulating the market and growing faster than