Wal-Mart - Essay Example

20 March Strategy Assignment One: The main buyers of Wal-Mart are the middle people and the poorer sections of society. It has triedto price its products in a way that they are accessible to almost all different kinds of people. However at the same time, it also caters to a large section of the upper and middle classes of society. Therefore, in order to sum up, its main buyers would be any kind of people or companies looking out to purchase products at a very affordable and reasonable price. In this way, it has been able to transfer the purchasing power on to the people because as the prices are so low, the quantities demanded by the people have risen and they are able to buy more. This according to simple microeconomics indicates that the people have more purchasing or bargaining power as compared to the producer, in this case, Wal-Mart, or the purchasing power is very high for the people. Two: The suppliers of Wal-Mart are very diverse and belong not only to different cultural backgrounds but also to different sections of society. They have even started a supplier diversity program since 1994 where suppliers in the form of women as well as minority groups are encouraged to produce and sell products to them and earn in the process. It also has formed a coalition with a number of large firms around the world like Oklahoma food suppliers as well as suppliers in China. In this way, suppliers have a great amount of power as the company is very approachable and literally invites suppliers to join it and be a part of it. They are made to go through training programs and made fit and ready for the job. In this manner, a lot is done to ensure their welfare and maintain a high level of product quality at the same time. Three: The main competitors for Wal-Mart are Target Corp and Costco. As per the valuation, shares as well as total revenue earned by the company, these two companies have currently come closest to measuring against Wal-Mart as the main competitors in the global market. However, the degree of rivalry continues to be medium and does not really pose a threat to Wal-Mart as such because of its soaring high figures. Four: Wal-Mart is following the cost leadership / broad target strategy in its working. This may be justified because according to Porter, broad target or cost leadership comes in when any firm is trying to win the market share by bringing about cost effectiveness in the produce and supply of its products. This is done in order to appeal the most to the consumers and form a part of their investments. Having the lowest range of prices of the products and services makes a firm reachable and accessible to a vaster consumer market and the firm can then hope to take a sort of lead or advantage in the economies of scale. In this kind of a situation, a firm mostly takes to producing standardized products which are easily available at a mass scale or rate of production and Wal-Mart has been following this. Five: In the value chain model, there are some very important processes in the case of Wal-Mart. They are: 1. Inbound and Outbound Logistics – this is because Wal-Mart’s main job is to receive and store products and inventory, control it as well as have transport facilities. Outbound would include warehousing, packaging and basically making the products available to the consumers easily. 2. Operations – this is the stage of value creation or of converting the inventory to finished products for the purpose of sale to the consumers. 3. Marketing and Sales – this is very important for Wal-Mart because its main job is to try and attract the consumers through the processes of marketing and sales. This is done with the help of promotions, advertising, retail managements and pricing. It basically forms a part of the entire marketing mix that is crucial for the existence of this company. 4. Service – this helps to enhance the product’s value and creates a link between the product and the consumers with respect to the company and thus is very important for Wal-Mart. Six: Entry barriers are in simple words, the hindrances and obstacles that make it difficult for any company or new firm to enter into an already established market. It may be due to government regulations or economies of scale. Most of the times these entry barriers are also because of the huge impact that already established business firms have on the consumer market which make it tough for new firms to enter into and compete with. Wal-Mart has taken to using information technology in order to raise the entry barriers for similar companies and firms within the field. This is a very strategic move and has helped the company to get a better positioning in the market. Wal-Mart used an extranet to integrate their entire supply chain, and such use of information was beneficial to them for a period of more than two decades and helped the business to establish world over quickly and gain a first mover advantage over the international consumer market. This was basically done in order to provide a number of inter connected networking chains to understand and transmit information regarding the supply, manufacturing as well as the distribution quicker over in order to meet the needs of the customers. Seven: The nine different processes in the Value Chain Model along with examples suitable for Wal-Mart are as follows: 1. Inbound Logistics – to accept products and inventory from the suppliers from all over the world 2. Operations – assembling the products received from the suppliers for the purpose of sale 3. Outbound Logistics – transporting and distributing the finished products to the various Wal-Mart outlets 4. Marketing and Sales – Placing promotions and advertisements on the internet as well as on hoardings and billboards for the purpose of selling to consumers 5. Service – providing customer support services and accepting product returns 6. Procurement – attaining raw materials from various suppliers 7. Technology and Development – undergoing research and development for the purpose of finding the needs and wants of customers 8. Human Resource Management – retention and compensation of employees and managers in the different outlets all over the world 9. Firm Infrastructure – maintain the management of the inner workings and functioning the structure and composition of the company Works Cited "WMT: WAL MART STORES INC Top Competitors." Business News, Stock Quotes, Investment Advice - DailyFinance. Web. 24 Mar. 2011. . "Walmartstores.com: Suppliers." Walmartstores.com. Web. 24 Mar. 2011. . Schmitt, Emily. "The Profits and Perils of Supplying to Wal-Mart - BusinessWeek." Businessweek - Business News, Stock Market & Financial Advice. 14 July 2009. Web. 24 Mar. 2011. . Fisher, Charles. "Wal-Mart You Don't Know | Fast Company." FastCompany.com - Where Ideas and People Meet | Fast Company. 1 Dec. 2003. Web. 24 Mar. 2011. . Read More