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Walmart - Case Study Example

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Sam Walton created Wal-Mart in 1962. Even though it displayed a successful record in its development over the years, it has experienced…
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Case for management at Wal-Mart Introduction Wal-Mart is a regional retail cooperation that has recently developed to become one of the largest companies in sales, in the United States. Sam Walton created Wal-Mart in 1962. Even though it displayed a successful record in its development over the years, it has experienced various hurdles that proved a difficulty for its maturity to a stable state (Wal-Mart Stores 17). This can be shown by some other discount retailing firms that together with Wal-Mart started within that same period. For example, the Kmart which was started by the Kresge corporation, Target started by Dayton Hudson and the Wool co initiated by F.W Woolworth. With the domestic location of its stores, Wal-Mart growth was increasing very slowly but later on they tried to gain from the international opportunities. Wal-Mart became a figure of free enterprise that had lost organization (Wal-Mart Stores 14). With the analysis of the influential five forces that model an industry, Wal-Mart’s growth and development over the years can be well elaborated.
The attractiveness of the discount retail industry
During 20th century, general retail has been alive. It was not that of a good system for the customers because they were not allowed to take any merchandise from the shelves. Later on, Discount retail came to the market and it encouraged, little charge, presented less service, credit, and they returned some advantages to the customers. This displayed how catchy the corporation had developed to be. Consumers displayed readiness in buying the brands from Wal-Mart where they felt comfortable with the “one-stop shopping” where an extensive collection of commodities were located in one place. This was to reduce the time they spent in shopping. In rivalry, a firm can decide to alter the prices to get an advantage, or either improves manufactured goods differentiation (Wal-Mart Stores 15).
Threat of substitutes product means the product found within the companies. A close substitute product will limit the chance of Wal-Mart to raise its prices. But Wal-Mart had a fairer price set on their merchandise, which made a great difference in the market compared to other firms (Wal-Mart Stores 17).
Principal functions and activities where Wal-Mart’s main competitive advantages lie and their distinctive capabilities.
Their main lead came from the organization and management style, IT, in store operations. They did set low prices in their goods which gave them an upper advantage in the market; this was due to aggressive use of technology in their retail operations. Its competitors tried to respond to Wal-Mart’s advantage in logistics and EDI by making modest cooperative changes by bringing into play the use of the internet and software package made by Isoft corp. With it great management style, Wal-Mart had basic integrity in all of its deals. It does not cheat on its suppliers. The distinctive resources and capabilities in the organized and good management are the basic integrity and good control of prices. In IT, we look at the use of logistics and EDI in internet and software.
Sustainability of Wal-Mart’s advantages
Its advantages were sustainable in terms that they had a wide coverage with several stores and they were able to reach a wide range of market. They started selling their merchandise on the internet. This is an upholding move because every day use of the internet keeps on increasing and the chances of loosing market keeps going low. They do not deal on one product, which increases their chances of making a profit. This helps them in balancing their finances. In case of a reduction in profit in one line of product, the loss can be normalized via the profit made in the other products.
My assessment of this is viewed in that, in one part like the cross docking, many competitors like the foremost retailers have found it complicated to reproduce Wal-Mart’s products. Kmart copied the form of management, which entailed offering large income potential to store managers in that, each store manager’s was directly linked to a customer’s satisfaction index. It also faced opposition in building new stores, and it was criticized by magazines and professionals who claimed that it was depressing wage growth in the United States economy; it was a ground of anti capitalist to wage war against it through media and social campaign (Wal-Mart Stores, 2010).
Wal-Mart’s strategic options
Wal-Mart has devised new formats in dealing with their management and ways to accelerate the international growth. Wal-Mart has planned to add more than 600 units and also the new stores were anticipated to be of natural escalation rather than acquisitions.
Conclusion
For a long period of time, Wal-Mart has been a regional retail that has been dealing with several stores that cut across the regions in US. Though it has experienced some challenges in its form of growth, it has increasingly formed means of which it has gained success in the market. This is through the competition that it faced from the other companies like k-Mart, and other specialized retailers for a period of time, of which it later on managed to come on top. Wal-Mart has come up with strategic options that will accelerate its international growth and stabilize its management and growth in the market.
Works cited:
Case 1-2: Wal-Mart Stores, Inc., in 2010. Read More
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