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WalMart Analysis using Porter's (2008) Model & Lee and Whang's (2001) Framework - Case Study Example


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WalMart Analysis using Porter's (2008) Model & Lee and Whang's (2001) Framework

For example cross docking, it had its own distribution centres and inside out location strategy. With Wal-Mart efficient distribution, economies of scale matches the volume strategy. Another advantage is cost saving from low inventory levels which in return can be utilised in consumer satisfaction. Secondly, it had a good partner relationship with its suppliers. Wal Mart integrates its suppliers through information systems and treats them well in terms of pricing. This helps in improving the supply chain and lowering the cost of distribution. Third competitive advantage is its advanced technology of data mining. With the help of data mining, they are able to gather useful data for the suppliers, improves customers satisfaction with the help of accurate demand forecast. The cost is reduced as there is no excess of inventor. The forth competitive advantage is Wal Mart work force culture. It values more for the customers; it is not compromised in any ways. The stores are able to response quickly to the changing demand. Lastly it’s the EDLP (everyday low price). With the help of EDLP customer satisfaction is improved through low price. The advertising cost is also reduced and steady price improves the supply chain (Quelch, p.189-192). Porters Five Force Model Power of Supplier Wal-Mart offers a lot of business to wholesalers and manufacturers. This enhances Wal mart with more powers. It can threat to switch to different suppliers. Thus the power of suppliers is medium. Power of Consumers The

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The author states that one of the activities of Wal mart was efficient distribution. For example cross docking, it had its own distribution centres and inside out location strategy. With Wal-Mart efficient distribution, economies of scale matches the volume strategy. Another advantage is cost saving from low inventory levels.

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individuals can easily shift to some other competitors who offers product at a lower price than Wal-Mart. But the consumers will lose the convenience with the organization. Thus the power of consumer is medium. Threat of New Entrants Entry barriers for new players are high compared to its competitors due to high initial set up costs such as distribution channels and this is because Wal-Mart has good distribution systems, huge brand name. Wal-Mart has an absolute cost advantage. Therefore the threat of new entrant is low. Threat of Substitute Threat of substitute is low as there are not many companies which offer low pricing and convenience. The customers may switch off to other speciality stores but they would not find the low pricing strategy of Wal-Mart. Online shopping also becomes an alternative. Rivalry The rivalry among the firms is high. There are few big competitors of Wal Mart; they are Sears, Amazon.com and Target. Thus the rivalry is high among established competitors. Porters Generic Strategy Porter’s generic strategy focuses on three strategies and they are cost leadership strategy, differentiation strategy and focus strategy. Cost leadership Cost leadership strategy is defined as offering the products or services at a less price than any of its competitors. It aims to be low cost producer in the firm (Karlof, p.190). Wal-mart has adopted the cost leadership strategy and has emerged as one of the largest companies in the world. The company followed cost leadership that involved developing economies of scale and reduction of cost. Differentiation strategy Differentiation strategy aims at offering a product that is unique and should provide superior value of products (Karlof, p.191). Wal-Mart does not apply a differentiation s
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Wal Mart Case Analysis using Porter's (2008) Model & Lee and Whang's (2001) Framework Contents Contents 2 Question 1. 4 Competitive Advantage 4 Porters Five Force Model 5 Power of Supplier 5 Power of Consumers 5 Threat of New Entrants 5 Threat of Substitute 5 Rivalry 6 Porters Generic Strategy 6 Cost leadership 6 Differentiation strategy 6 Focus strategy 6 Sustainability 7 Question 2 7 Wal Mart Supply Chain 7 Question 3 8 Objective of Wal-Mart's RFID Initiative 8 Reference 10 Question 1…
WalMart Case Analysis using Porters (2008) Model & Lee and Whangs (2001) Framework
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