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Walmart Case

Essay by   •  November 8, 2012  •  Essay  •  1,070 Words (5 Pages)  •  1,317 Views

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Wal-Mart is the second largest company in the world it has 8500 stores in 15 countries, under 55 different names. Wal-Mart focus on mass merchandising by offering a multitude of products and services within one convenient store. They sell sporting goods, electronics, housing needs, clothing, groceries, consumables, and toiletries all in one convenient location. Similar to a mall, Wal-Mart meets all of its customers' needs in one location. This is a very valuable ability because it allows the customer to have more control over his or her time. The company operates under three main operation segments. Its most common segment will be its Wal-Mart. The second common segment found in the United States is Sam's Club. Sam's club is similar to Wal-Mart except that it is larger in size and puts more emphasis on wholesale retail. The company's last segment consists of International stores. Though Wal-Mart has few locations outside the United States its name is widely known.

Within the United States, Wal-Mart has a variety of mass merchandising locations. Wal-Mart's products and services within each location are based on demographics and surrounding stores. Superstores, discount stores, and neighborhood markets are the three types of stores Wal-Mart might open, given a certain demographic. If a community is large and consists of multiple school districts and many families, Wal-Mart will consider opening a Superstore or neighborhood market. Within a neighborhood market, Wal-Mart offers lower pricing to compete with higher priced stores such as Targets, Kohl's, Shop Rites, ACMEs, and Super fresh.

2. VALUE CHAIN ANALYSIS

Wal-Mart takes care of all the activities internally except partially outsourcing its logistics requirements. Its systems integration from inventory, to stores, to headquarters to suppliers is the lifeline of its success. The core activity remains in its bulk buying and inventory management which supports Wal-Mart's competitive advantage of pricing and every element

shows traces of cost leadership. Wal-Mart located its discount stores around regional warehouses allowing a streamlined and low cost physical distribution.

* Inbound Logistics

Wal-Mart's primary activity of receiving inventory is planned right from the point of production, which Wal-Mart is not involved with. Wal-Mart has integrated systems with key suppliers which communicate in real time data with sales information and stock status so it can replenished in time. Shipments are timed and slotted and planned in an orchestral way.

* Operations

Wal-Mart maintains a lean approach to inventory. Wal-Mart innovated a technique of replenishment called the Cross-Docking where incoming goods are offloaded into outgoing trucks directly without stocking them even for a few hours. Most goods pass through the warehouses within a span of 48 hours, enabling minimum idle time and lowering excess inventory possibilities. Most of the goods never touch the floor of the warehouse, as goods are passed on 24 miles length of conveyor belts between incoming trucks to outgoing trucks.

* Outbound Logistics

Goods are transferred within 48 hours of receipt from suppliers. The replenishments are also done twice weekly, which is double the industry's

Standard.

* Marketing and Sales

Wal-Mart maintains a simple and effective marketing strategy which it has managed to replicate globally apart it being the focus of its strategy. The Every Day Low Price (EDLP) is simple and eliminates unnecessary advertising trying to push sales, as Wal-Mart has successfully sold the concept to the customers, that it sells its products at the lowest prices, everyday. This is one of the most interesting attributes of Wal-Mart.

* Service

Wal-Mart's

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