Case 1
Walmart Stores 1) What is Walmart strategy? What is the basis on which Walmart build its competitive advantage?
Walmart Strategies is selling branded product at low cost. Other than that, Walmart deliberately ensured it did not became to dependent on any one supplier, no single vendor constituted more than 4 percent of its overall purchase volume. In addition to that Walmart also use “saturation” strategy for store expansions. The standard was to be able to drive from the distribution center to the store within a day. Walmart also built large discount store in small rural towns. 2) How do Wal-Mart’s control system help execute the firm strategy?
Each store constituted an investment center and was evaluated on its profits relative to its inventory system. Data from over 5,300 stores on its such as sales, expenses and profit and loss were collected, analyze and transmitted electronically on a real time basis, rapidly revealing how a particular region , district, store, department within a store or item within a department is performing. Information enables the company to reduce the likelihood of stock-out and the need for markdowns and slow moving stock and to maximize inventory turnover. Other than that, Wal-Mart instituted several other policies and programs for its associates. For example, incentive bonuses, a discount stock purchase plan, promotion from within, pay raises based on performance not seniority, and open door policy. In addition, Wal-Mart also persuaded its suppliers to have electronic ‘hook ups” with its store. Furthermore, Wal-Mart own its truck when most competitors outsources