Wal-Mart Supply Chain
Background of Mal-Mart
Based in Bentonville, Arkansas and founded by the legendary Sam Walton in 1962, Wal-Mart is the world’s largest retailer with more than 10,000 stores worldwide. Wal-Mart remains a family-owned business, as the company is controlled by the Walton family, who own a 48 percent stake in Wal-Mart. The company has a total of 2.2 million employees worldwide.
Wal-Mart is best known for its discount stores, grocery stores and warehouse stores. It offers products such as apparel, small appliances, housewares, electronics, hardware and a variety of drinks and food. Wal-Mart stores are located in low-rent, suburban areas, close to major highways. Its distribution centers are usually located within a day’s driving distance from its stores in order to better serve its stores. According to Wal-Mart annual report, the number of stores has increased from 7262 units in 2008 to 10,130 units in 2012. Its net sales have increased from $373,821 million in 2008 to $443,854 million in 2012.
Wal-Mart competitive position
Wal-Mart strong competitors are: Target, Kmart, Costco and Safeway. Wal-Mart’s competitive position can be analyzed by Porter’s five forces. The Porter’s five forces are: the threat of new entrants, the threat of substitute, the bargaining power of suppliers, the bargaining power of buyers and rivalry among existed competitors.
The threat of new entrants is low:
The entry barriers are high because Wal-Mart has a large scale of operation, an outstanding distribution system and loads of stores, which require huge capital. Also Wal-Mart brand name is very strong and price is very low, which threaten the potential competitors.
The threat of substitute is moderate:
The Wal-Mart makes a great effort to make sure that they are better meeting customer needs. However, the customer switching cost is really low so that customers can easily switch to other stores. On-line purchase can be a substitute means for shopping.
The bargaining power of suppliers is
Based in Bentonville, Arkansas and founded by the legendary Sam Walton in 1962, Wal-Mart is the world’s largest retailer with more than 10,000 stores worldwide. Wal-Mart remains a family-owned business, as the company is controlled by the Walton family, who own a 48 percent stake in Wal-Mart. The company has a total of 2.2 million employees worldwide.
Wal-Mart is best known for its discount stores, grocery stores and warehouse stores. It offers products such as apparel, small appliances, housewares, electronics, hardware and a variety of drinks and food. Wal-Mart stores are located in low-rent, suburban areas, close to major highways. Its distribution centers are usually located within a day’s driving distance from its stores in order to better serve its stores. According to Wal-Mart annual report, the number of stores has increased from 7262 units in 2008 to 10,130 units in 2012. Its net sales have increased from $373,821 million in 2008 to $443,854 million in 2012.
Wal-Mart competitive position
Wal-Mart strong competitors are: Target, Kmart, Costco and Safeway. Wal-Mart’s competitive position can be analyzed by Porter’s five forces. The Porter’s five forces are: the threat of new entrants, the threat of substitute, the bargaining power of suppliers, the bargaining power of buyers and rivalry among existed competitors.
The threat of new entrants is low:
The entry barriers are high because Wal-Mart has a large scale of operation, an outstanding distribution system and loads of stores, which require huge capital. Also Wal-Mart brand name is very strong and price is very low, which threaten the potential competitors.
The threat of substitute is moderate:
The Wal-Mart makes a great effort to make sure that they are better meeting customer needs. However, the customer switching cost is really low so that customers can easily switch to other stores. On-line purchase can be a substitute means for shopping.
The bargaining power of suppliers is