Wal-Mart Strategy

As the corporate planning manager for Target I have looked into our biggest competitor and analyzed how Wal-Mart’s strategy has brought them such great success. Since 1969 when the company first started, the founder Sam Walton, has instilled his personal frugality into the business which had lead them to be one biggest and best companies in the retail market with over 288 billion in sales and 8.9% market share in the US. I believe by adapting some of these strategies into our own operations and existing plans we can achieve a higher return on equity. We already share a similar marketing strategy where we strive in cost leadership, offering customers branded products at an everyday low price. We currently have a strong reputation that was adapted from this same principle; we give the customers quality products at a fair price giving the customer the most value to their dollar. One of the ways Wal-Mart can market themselves so well is the fact that they choose new locations in more rural areas where is little competition, while we focus too much on cities with more than 50,000 in population. We should not focus on expanding though until we increase our current stores sales and success. It is difficult to compete with Wal-Mart through marketing since they continue to stress their “everyday low prices” motto which brings the customers in the doors. In order to compete with them in a higher level we need to try and cut costs in the same way they do and create better inventory management in order to increase our ROE percentage from 15.6% to 23.2% in inventory turnover. Wal-Mart’s strongest strategy is their superior supply-chain management that has allowed them to drive down costs significantly. They have over 3000 suppliers, none of which have more than 4 percent of their overall purchase volume. Their independence isn’t even the strongest part; their stores are so strategically placed there is always a distribution center that is within a day drive from the