Walmart Stores Inc Case Study

WALMART STORES INC.

The source of Wal-Mart's competitive advantage in the discount store industry stems from its company strategies. Some of Wal-Mart's strategies include; "everyday low prices" and "satisfaction guaranteed", which at the end of the day are the core of the industry and the single most important business aspect that delivers a favorable bottom-line. Wal-Mart demonstrates excellence in the industry by committing to achieving its strategic goals.

Everyday Low Prices

The purpose of discount stores is to offer discounted prices on merchandise. Since no company enjoys reducing margins, the trick in offering discounted prices on merchandise is maintaining low operational costs.

New Entrants Substitutes Rivals Suppliers Buyers

High start-up costs for warehousing and distribution make it difficult to minimize costs and offer discounted prices on merchandise. Dollar stores and wholesalers operate under the philosophy of a discount store, but are constrained to product choice and product volume. Few competitors, but those few hold large % of market share, such as Target, Kmart, Venture, Caldor and Ames. Vendors are typically responsible for their own shipments and managing inventory. Vendors are given shelf space based on contractual sales volumes and rely on their own projections.

Wal-Mart launched as a small store in small rural towns to relieve pressure on discounting prices and pinching profit margins. Wal-Mart offers diversity with merchandise across several departments, selling in units as well as bulks. It also expanded to wholesaler markets with Sam's Club. Wal-Mart has implemented many innovative inventory systems to improve efficiencies, such as electronic scanning (UPC) and integrative in-store satellite systems. Wal-Mart installed an electronic data interchange for almost 90% of vendors to interact between companies electronically regarding inventory. Wal-Mart's "retail link" includes transmitting daily