Walmart Case Study
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
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