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Wal-Mart Stores

In: Business and Management

Submitted By 83611192
Words 1312
Pages 6
EXECUTIVE SUMMARY
As the largest supermarket, Wal*Mart is facing the new challenges: it is the target for all of its competitors. Its competitors will study its business model. The management of Wal*Mart needs to find suitable solutions to sustain a stable growth rate. At the end of 1993, Wal*Mart had a market value of $57.5 billion, and its sales per square foot were nearly $300, compared with the industry average of $210. The supercenter format had produced impressive growth, with sales in 1993 increasing to $14.6 billion from $11.8 billion in 1992. Based on the data provided in the case, we can find that Wal*Mart’s discount store’s net income per square foot of $18 compared with Target’s at $1.5 and Kmart’s at $-1.1. (Exhibit 1 shows the Performance of Discount Department Stores by 1993 Sales.)
ANALYSIS
Wal*Mart had many excellent business management systems, such as supply chain management, customer relationship management, and distribution management. All these systems were benefit from its heavy investment in information technology. Continue investing in advanced IT business system was one of the best strategy to sustain Wal*Mart’s competitive advantage.
In addition, food retailing was a $380 billion industry in 1993.The supercenter format had produced impressive growth, with sales in 1993 increasing to $14.6 billion from $11.8 billion in 1992. Food, which typically accounted for 40% of sales, was the key ingredient in a successful discount/grocery operation because of its powerful traffic draw. Meanwhile, the U.S. market for organic food was growing at a pace of almost 20% per year, compared with 3%–4% for the food sector as a whole. In 2005, Wal*Mart shared estimates ranging from 12% to 20% of the market. In expanding its grocery business, Wal*Mart had shown an ability to undercut competitors by 20% and still be profitable. Wal*Mart’s global sourcing was

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