Walmart Case
walmart value chain
Wal Mart
What, historically, has been Wal-Marts key source of competitive advantage in discount retailing?
WalMarts competitive advantage is a result of several key strategic choices.
• First, WalMarts choice of geographic location in rural/small town locations that were not being served by competitors allowed it to establish itself as the sole discount retailer in these areas.
• WalMarts inventory management strategy. From the onset, WalMart has been a leader in implementing new and cost effective methods to manage inventory. Merchandise is tailored to local market demand via “traiting” where a products movements are indexed over a thousand store and market traits.
• WalMarts operations strategy. WalMarts operations activities fit well together to achieve maximal efficiency and lower costs. By having multiple distribution centers, WalMart is able to lower a stores square footage that is devoted to inventory . This allows higher efficient use of store floor space for displaying more goods
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and generating greater sales volume.
• WalMarts vendor relations. WalMart has made specific supplier choices along the way that are geared towards minimizing costs and maximizing efficiency. Buying is centralized at headquarters which keeps purchasing costs down
• WalMarts culture. From the onset, Sam Walton led by example and emphasized frugality, customer service, and an open book policy. WalMarts culture focuses on building loyalty among associates, suppliers and customers.