Wal-Mart goes smaller - Essay Example

Walmart Goes Smaller Discussion Questions The obvious reason why there has been so much resistance to Walmart expanding into urban areas is due tospace. Traditional Walmart stores took up a large amount of space and this can be a problem in crammed urban areas. Walmart has found success in smaller towns where there are not strict limits on store space. Also, I feel that big cities such as Chicago, New York City and Detroit have been against Walmart opening stores in those areas because there is already too much competition.

It is okay for Walmart to open a bunch of stores in some of the smaller towns and cities across open because no one is going to complain. Well there will be some complaints from small business owners in those towns, but they do not have the same financial might as big corporations. Bigger cities are unafraid at what a Walmart store may bring to the local market. Finally, I also think that some people in the cities are put off by Walmart because they see it as a corporate giant that does not have the best interests of the local citizens at heart.

This longstanding reputation has hurt the brand image of Walmart and made city people more aware of what the company can bring to the big smoke.2) One of the main criticisms of Walmart entering the cities was that the stores were too big for zoning requirements. In order to meet this objective, Walmart executives allowed these urban stores to be no more than 8,000 square feet. This is a huge change for Walmart because the company has been so successful with large stores of more than 42,000 square feet.

It says a lot that the company was willing to change its strategy so much in order to be allowed to open stores in the big cities. It is good that Walmart has compromised and find a way to meet zoning requirements. Walmart has also changed its range of products, with customers in the big cities only able to pick up groceries from the store. All other products can be ordered online and then picked up.3) From an operations management point of view, Walmart will not be able to use economies of scale to its advantage.

Because of the limited space available in store, Walmart will have to only keep a select few products on display. This can lead to slow response times and slow down the supply chain completely. Walmart has been successful for so long due to its efficient supply chain, and by giving that away the company may lose ground to some of its competitors. The consumer will be impacted by these changes greatly. Because of the smaller amount of stock available, as well as the fact that stock shipments will be less frequent, this increase in production and supply chain cost will have to be passed onto the consumer.

This will result in customers having to pay more for products at stores in the big cities compared with those in smaller cities.