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Understanding Supply Chain Management in Your Business Strategy - Essay Example

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Wal-Mart Stores, Inc was initiated in 1969 and engages in retail and wholesale all over the world offering assorted merchandise and services at relatively low prices. There are three segments of merchandise such as Wal-Mart US, Wal-Mart international, and Sam’s Club. The…
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Understanding Supply Chain Management in Your Business Strategy
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Supply Chain Management: Wal-Mart Company Affiliation Supply Chain Management: Wal-Mart Company Wal-Mart Stores, Inc was initiated in 1969 and engages in retail and wholesale all over the world offering assorted merchandise and services at relatively low prices. There are three segments of merchandise such as Wal-Mart US, Wal-Mart international, and Sam’s Club. The Wal-Mart US is a retail store operating in all the 50 states in the US. There is also a digital retail in addition to the Wal-Mart international segment consisting of operations in 26 countries outside the US. The customer base is 245 million very week and the net sales for 2015 fiscal year was 48.2 billion dollars (Lu, 2015). Wal-Mart employs about 2.2 million people in the world and has very innovative and committed leaders to drive its growth.
Wal-Mart uses various ways of promoting their products to reach as many audiences as possible. One of the strategies it uses is the Above The Line (ATL) in which the company uses the mass media to promote its brands and reach many consumers all over the world. Such media includes television, radios, the internet, and the print media (Lu, 2015).. The company can reach a wide audience by using the ATL and increase their sales. The other way the company promotes its sales is through Below The Line (BTL) advertising which is a one to one method such as using stickers, pamphlets, brochures, or handbills placed at the point of sale, and on the roads through placards and banners. Product demonstration and samples at busy places such as malls and marketplaces and residential areas also play a big part in advertising. The other BTL by the company are the use of road shows and distribution of literature on the product using vehicles.
Walmart competition in the consumer retail industry can be analysed using the Porters Five forces to understand its strategies that make it remain relevant in the market (Lu, 2015).. Entry barriers for Walmart are high as it has outstanding locations, brand name, distribution systems, and financial capital to keep off its competitors. Walmart possesses an absolute cost advantage over its competitors making it remain relevant. To reduce rivalry among established companies such as the Target Company, Wal-Mart differentiates its products and uses smaller packaging to serve low-income earners. Individual buyers have little power over Wal-Mart as its pricing strategies and the quality of its products attract consumers to its retail shops. Wal-Mart has reduced the bargaining power of suppliers by offering a lot of business to manufacturers and wholesalers. Its large suppliers such as the Coca-Cola and Proctor have less bargaining, as Wal-Mart is one of their biggest customers.
Wal-Mart faces low pressure from substitute products by keeping the prices for its products low and the customers will not find any other place to buy goods at low prices. To reduce the threats of new entrants, Wal-Mart uses innovation to improve the quality of its products to attract customers (Lu, 2015). The supply chain management for Wal-Mart is a support value process as it is concerned with innovation to improve the quality of its product. Wal-Mart has a streamlined supply chain management through community to enhance good customer relations.
References
Lu, C. (2015). Incredibly successful supply chain management: how does walmart do it?. Tradegecko.com. Retrieved 12 June 2015, from http://www.tradegecko.com/blog/incredibly-successful-supply-chain-management-walmart Read More
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