Competitive and Supply Chain Strategies
Give arguments to support the statement that Wal-Mart has achieved very good strategic fit between its competitive and supply chain strategies.
Wal-Mart’s competitive strategy is based on three dimensions: high product availability, a wide variety of goods, and everyday low pricing. Consistently providing a wide variety of goods at low prices presents a challenge to many retailers due to the costs required in managing transportation, inventory, facilities, and information. Their pioneering use of
“crossdocking” and internal distribution system management allows for decreased transportation costs for a wide variety of goods while cutting inventory needs, i.e., it allows them to strike a balance between high product availability (responsiveness) and cost (efficiency) that meets their customers expectations. Their supply chain strategy also capitalizes on the relatively stable demand for their products, which is a function of their infrequent usage of product promotions and their everyday low pricing strategy.
Finally, Wal-Mart recognizes its suppliers capabilities and has partnered with key suppliers to allow these suppliers to manage replenishments through vendor managed inventory (VMI) enabled by information sharing agreements. In summary, Wal-Mart’s supply chain was constructed and is managed to enable providing a wide variety of stable-demand items at consistently low prices, which is their competitive strategy.
What are some industries in which products have proliferated and life cycles have shortened? How have the supply chains in these industries adapted?
Product proliferation (wider variety) and shortened life cycles are apparent in more and more industries over time as consumers become increasingly demanding for items that fit their unique desires. The most obvious industries in which the combination of increased product variety and short life cycles can be found is in the high-tech industries such as
PCs, cellular phones, and multimedia products. Some of
Wal-Mart’s competitive strategy is based on three dimensions: high product availability, a wide variety of goods, and everyday low pricing. Consistently providing a wide variety of goods at low prices presents a challenge to many retailers due to the costs required in managing transportation, inventory, facilities, and information. Their pioneering use of
“crossdocking” and internal distribution system management allows for decreased transportation costs for a wide variety of goods while cutting inventory needs, i.e., it allows them to strike a balance between high product availability (responsiveness) and cost (efficiency) that meets their customers expectations. Their supply chain strategy also capitalizes on the relatively stable demand for their products, which is a function of their infrequent usage of product promotions and their everyday low pricing strategy.
Finally, Wal-Mart recognizes its suppliers capabilities and has partnered with key suppliers to allow these suppliers to manage replenishments through vendor managed inventory (VMI) enabled by information sharing agreements. In summary, Wal-Mart’s supply chain was constructed and is managed to enable providing a wide variety of stable-demand items at consistently low prices, which is their competitive strategy.
What are some industries in which products have proliferated and life cycles have shortened? How have the supply chains in these industries adapted?
Product proliferation (wider variety) and shortened life cycles are apparent in more and more industries over time as consumers become increasingly demanding for items that fit their unique desires. The most obvious industries in which the combination of increased product variety and short life cycles can be found is in the high-tech industries such as
PCs, cellular phones, and multimedia products. Some of