WALmat 
WAL-MART CASE STUDY
CORPORATE SUMMARY
FEB. 1ST, 2015
As one of the largest retailer in the world, Wal-Mart, focuses on EDLP and possesses a great deal of power to grip the throats of those suppliers, who depends merely on one’s perspective. The counterpart-Sarah Talley, representative of a small entity, found out an innovative tactic to achieve win-win situation.
Wal-Mart’ s main objective is to provide customers with low price commodities everyday to win customer loyalty and push pressure on suppliers taking advantage of its high buyer’s bargaining power. With regard to the counterpart, Frey Farms aims at establishing long-term cooperation relationship with Wal-Mart to get better sells. They both desire to pay low cost but gain high margin.
In this case, Wal-Mart has a large customer bases thus it can provide a large platform for suppliers to sell their products. Besides, Wal-Mart masters the initiatives in choosing suppliers. For Fery Farms, Sarah has an idea of optimizing supply chain to cut transportation cost. Sarah also has knowledge about Wal-Mart’s culture, so she can be helpful in problem solving process. But the thing is that Wal-Mart is well-trained and knows it has bargaining power. This is an advantage for Wal-Mart, so that it can have many choices. But for Frey Farms, it faces risk of going out of business once lost this large buyer.
Weighing strengths and weaknesses of both parties, it is a non-power balance cooperation. If Frey Farms wants to maintain long-term cooperation relationship with Wal-Mart, it is necessary to stress on how to achieve common goal, how to cut cost, and what both parties can gain from cooperation. Besides, for Frey Farms, it is better to become a problem solver and to tell Wal-Mart, “What you need is what I have”, in case that Wal-Mart could easily switch to another supplier. Moreover, it is inadvisable to bluff strong buyer, suppliers can coordinate with buyers through effective communication and appropriate compromise.
CORPORATE SUMMARY
FEB. 1ST, 2015
As one of the largest retailer in the world, Wal-Mart, focuses on EDLP and possesses a great deal of power to grip the throats of those suppliers, who depends merely on one’s perspective. The counterpart-Sarah Talley, representative of a small entity, found out an innovative tactic to achieve win-win situation.
Wal-Mart’ s main objective is to provide customers with low price commodities everyday to win customer loyalty and push pressure on suppliers taking advantage of its high buyer’s bargaining power. With regard to the counterpart, Frey Farms aims at establishing long-term cooperation relationship with Wal-Mart to get better sells. They both desire to pay low cost but gain high margin.
In this case, Wal-Mart has a large customer bases thus it can provide a large platform for suppliers to sell their products. Besides, Wal-Mart masters the initiatives in choosing suppliers. For Fery Farms, Sarah has an idea of optimizing supply chain to cut transportation cost. Sarah also has knowledge about Wal-Mart’s culture, so she can be helpful in problem solving process. But the thing is that Wal-Mart is well-trained and knows it has bargaining power. This is an advantage for Wal-Mart, so that it can have many choices. But for Frey Farms, it faces risk of going out of business once lost this large buyer.
Weighing strengths and weaknesses of both parties, it is a non-power balance cooperation. If Frey Farms wants to maintain long-term cooperation relationship with Wal-Mart, it is necessary to stress on how to achieve common goal, how to cut cost, and what both parties can gain from cooperation. Besides, for Frey Farms, it is better to become a problem solver and to tell Wal-Mart, “What you need is what I have”, in case that Wal-Mart could easily switch to another supplier. Moreover, it is inadvisable to bluff strong buyer, suppliers can coordinate with buyers through effective communication and appropriate compromise.