Walmart Inc Case Study
WAL-MART CASE STUDY ANALYSIS
SWOT
STRENGTH
▪ Information Technology :
They have a strong information technology system as implemented EDI, Information system, UPC at POS, Satellite system, Pick to light system, Vendor management inventory system which was not implemented by any other competitor. ▪ Supply Chain (Strong). They had a long term relationship with the supplier as there was no non sense negotiator as they eliminated the manufacture representative from negotiation with the suppliers. ▪ They were focused on Human resource and development as associates were considered a key to success for Wal-Mart.
WEAKNESS
▪ They were not globally known so it would be difficult for them to create a brand name globally.
OPPURTINITIES
▪ They can further expand globally where they can explore new areas and markets where no body else is reaching.
THREATS
▪ They are facing competition in local markets. ▪ Competitors may imitate their strategy. ▪ Intense Price Competition ▪ Legal and political issues
GENERIC STRATEGY
Cost Leadership
▪ Wal-Mart commits to deliver quality products with the lowest price ▪ Store Managers are given authority to lower prices based on the local competition. ▪ Stores are built in border of large cities and communities with the warehouse appearance that giving them the competition advantages in leasing and maintenance costs.
Differentiation
▪ They were differentiating in a way they have an Excellent Inventory System o Focus particularly on eliminating less profitable products and reducing the variety of products in a given category. o Restructure the flow of goods from manufacturer to the store shelf. The higher quick turnover results in more turns and therefore less inventory.
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VALUE CHAIN
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PORTER FIVE FORCE MODEL
Threat to Entry ' LOW
BARRIER TO ENTRY - HIGH
Economies of Scale is high: IT can deter entry by forcing the entrant to come
SWOT
STRENGTH
▪ Information Technology :
They have a strong information technology system as implemented EDI, Information system, UPC at POS, Satellite system, Pick to light system, Vendor management inventory system which was not implemented by any other competitor. ▪ Supply Chain (Strong). They had a long term relationship with the supplier as there was no non sense negotiator as they eliminated the manufacture representative from negotiation with the suppliers. ▪ They were focused on Human resource and development as associates were considered a key to success for Wal-Mart.
WEAKNESS
▪ They were not globally known so it would be difficult for them to create a brand name globally.
OPPURTINITIES
▪ They can further expand globally where they can explore new areas and markets where no body else is reaching.
THREATS
▪ They are facing competition in local markets. ▪ Competitors may imitate their strategy. ▪ Intense Price Competition ▪ Legal and political issues
GENERIC STRATEGY
Cost Leadership
▪ Wal-Mart commits to deliver quality products with the lowest price ▪ Store Managers are given authority to lower prices based on the local competition. ▪ Stores are built in border of large cities and communities with the warehouse appearance that giving them the competition advantages in leasing and maintenance costs.
Differentiation
▪ They were differentiating in a way they have an Excellent Inventory System o Focus particularly on eliminating less profitable products and reducing the variety of products in a given category. o Restructure the flow of goods from manufacturer to the store shelf. The higher quick turnover results in more turns and therefore less inventory.
[pic]
VALUE CHAIN
[pic]
PORTER FIVE FORCE MODEL
Threat to Entry ' LOW
BARRIER TO ENTRY - HIGH
Economies of Scale is high: IT can deter entry by forcing the entrant to come