Wal-Mart Strategic Audit
Wal-Mart Stores, Inc.: Under Attack (2006)
Strategic Audit
By
Jessica Brown
Sue Dobbs
Elaine Edwards
Catherine Oden
Wal-Mart Current Strategies
Offering products at everyday low prices is one of Wal-Mart’s many strategies. The company value chain helps identify activities associated with how Wal-Mart achieves their many strategies. First, Wal-Mart’s supply chain management is extremely cost effective. For example, Wal-Mart has been known to imitate competition’s successful merchandising concepts. Another cost-effective method in Wal-Mart’s supply chain management is their ability to track the movement of products through the entire value chain. Whether the product is in shipment, in distribution center inventory, in-store inventory or on the shelf, or at the cash register, Wal-Mart can track it in real time. Their capability in streamlining supplies among stores and suppliers has helped them maintain appropriate inventory and track what sells and what doesn’t.
Operations and distribution strategies have also helped Wal-Mart achieve low prices. Wal-Mart’s strategy has been to plot stores outside of large cities and within 200 miles of existing stores. Clustering stores together in small areas, Wal-Mart relies on word-of-mouth advertising to win over consumers in larger cities. Because stores are close together, distribution costs are below average. Furthermore, Wal-Mart seeks to meet different customers’ needs with four distinct retail options; these include discount stores, supercenters, Sam’s Clubs, and neighborhood markets. Each store concept has a specific range of store size, total employment, and estimated sales.
One of Wal-Mart’s foremost strategies is to provide superior service to customers. Every store has a “greeter” near the entrance to welcome customers, offer them a shopping cart, and direct them toward where their items are located. Rule number eight in Sam Walton’s 10 Rules for Building a Business is to “Exceed our
Strategic Audit
By
Jessica Brown
Sue Dobbs
Elaine Edwards
Catherine Oden
Wal-Mart Current Strategies
Offering products at everyday low prices is one of Wal-Mart’s many strategies. The company value chain helps identify activities associated with how Wal-Mart achieves their many strategies. First, Wal-Mart’s supply chain management is extremely cost effective. For example, Wal-Mart has been known to imitate competition’s successful merchandising concepts. Another cost-effective method in Wal-Mart’s supply chain management is their ability to track the movement of products through the entire value chain. Whether the product is in shipment, in distribution center inventory, in-store inventory or on the shelf, or at the cash register, Wal-Mart can track it in real time. Their capability in streamlining supplies among stores and suppliers has helped them maintain appropriate inventory and track what sells and what doesn’t.
Operations and distribution strategies have also helped Wal-Mart achieve low prices. Wal-Mart’s strategy has been to plot stores outside of large cities and within 200 miles of existing stores. Clustering stores together in small areas, Wal-Mart relies on word-of-mouth advertising to win over consumers in larger cities. Because stores are close together, distribution costs are below average. Furthermore, Wal-Mart seeks to meet different customers’ needs with four distinct retail options; these include discount stores, supercenters, Sam’s Clubs, and neighborhood markets. Each store concept has a specific range of store size, total employment, and estimated sales.
One of Wal-Mart’s foremost strategies is to provide superior service to customers. Every store has a “greeter” near the entrance to welcome customers, offer them a shopping cart, and direct them toward where their items are located. Rule number eight in Sam Walton’s 10 Rules for Building a Business is to “Exceed our
Cited: Wheelen, Thomas L., and J. David Hunger. Strategic Management and Business Policy: Achieving Sustainability. Upper Saddle River, NJ: Prentice Hall, 2010. Print