advantages and its sources? Key Success Factors in US: Cost Controls: Wal-Mart demanded lower price, high quality, efficient bookkeeping and punctual delivery from their suppliers Helped suppliers improve inventory management and efficiency by weeding out extra costs Forced its suppliers to search hard for ways to eliminate the inefficiency in their own processes in order to drive costs to a minimum and to improve the quality of their products Logistics Management: Target was to have inventories at half the rate of sales and to have any required delivery arriving on the shelved within one day No store was more than a day's drive from its distribution centre Use of technology gave Wal-Mart great efficiency in the supply chain arrangement and was a distinct competitive advantage, started using electronic data interchange (EDI), satellite technology: able to connect all stores to home office Enabled it to offer its customers the right product mix at the right time while keeping inventory and associated costs as low as they could possibly be Benefits to Workers: Started profit sharing plans for rank and file workers, 2/3 of the American workforce owned stock in Wal-Mart Cross Training: people switched jobs to enable them to understand different parts of the company's operation, which gave them more variation int heir jobs Financial numbers were also shared with every employee Position against unions, would rather close a store than allow it to be unionised Promotes open door policy so that employees could channel complaints Employees were motivated, happy, and passionate about their job Creative barriers to entry (rural locations)- small town: Avoided direct competition from stronger players Due to small populations it served once Wal-Mart opened a store, the town could not support another store of similar size Rural backwaters also reduced costs due to lower land and real estate prices Customer Service: 3 cardinal beliefs: (1) providing great customer service, (2) showing respect for the individual, and (3) striving for excellence these beliefs were translated to 10 specific business rules for every executive/ associate
Sundown rule required for employees to answer requests from customers by the end of business hours
Competitive Advantage of Wal-Mart: Quality of merchandise
assortment of goods price level store environment customer support store hours availability of free parking Wal- Mart focused on two major drivers: Price and Service each Wal-Mart store monitored the prices of about 1500 items in their competitors' stores objective: to offer same merchandise at other local stores but at 20% less on-going program to lower prices even further when there was the opportunity to do so roll back Special Buy: a product with a special tag that offered everyday items bundled with additional amounts of the same product or another product for a limited time