Strategy Management Walmart and K Mart

Business Level Strategy Wal-Mart and K-Mart

- Wal Mart focus on Cost leadership

- K Mart focus on Cost leadership and Product Differentiation

2. Business level strategy and the reasons

Business level strategy Wal-mart

Cost Leadership - The largest US. Corporation in sales. It can produce high volumes of production. Fixed costs are spread over a larger number of units of the product or service, resulting in a lower unit cost.

- Squeezing suppliers to ensure low prices for its goods. It also imported many material and goods from China, "the world factory" for its low cost.

- WalMart is known to negotiate with suppliers for the lowest cost of the product without any frills and marketing expenses which adds to the cost later.

K-mart

Cost Leadership and Product Differentiation - Until 1997, K-mart used cost leadership strategy. Its customers were average people with low to average income.

- The year 2000 K-mart could not compete with Wal-Mart on price level. The quality of the products was not as good as Target's, for example. They tried to differentiate and developed a new market strategy to overcome these problems. Products were designed for home and family members.

Comments :

Regarding business level strategy both of them (Wal-Mart and K-Mart). Actually they have similarity business level strategy but Wal Mart more specific in Cost leadership. Like we already mention in last assignment that Wal Mart have mission " Provide goods and services for our customers at everyday low prices". From this statement we can to know that Wal Mart think that the most commonly behaviour of customer is low price/ cost leadership. And also Wal Mart creating perceptions that price are lower than really are. K mart not only focus on cost leadership but also in product differentiation. They provide product with different quality and brand compare to competitor.

3. Organization Structure, Management Controls and Compensation