Walmart stores.

INC:

Founder of Walmart- Sam Walton. Died in 1992. Glass & Soderquist are CEO and COO respectively.

Lot of growth happened in the year 1993 and 1994. Now the problem is how to sustain the growth it
has shown. In April 1993, growth in comparable store sales is 7%-8% that fell below 10% range since
1985.

In 1969, all the stores opened are Walmart stores.

Discount retailing:

Emergence of discount stores @ low margins. They used to charge 10-15% lower magins compared to
conventional stores. By 1993 industry had become more concentrated.

History of growth:

BY 1970 he expanded his discount stores. Growth of walmart was phenomenal. By 1993 there was stiff
competition from its competitors. Walton was more emotional towards people so he had to put low
prices compared to all other retailers. He used to spend most of the time spending observing the
competitors.

Take care of people/ employees in walmart that automatically serves the customers interest. His
management style is a “Management by walking around”. Gives responsibilities to associates, customers
& suppliers.

Merchadising:

Local store manager takes preference of customers which one to place and at what position. Their
promotional strategy is “Everyday lowprices”. It used to give freedom for setting the prices of products
in preference to local customers. In remote locations the Walmart prices are higher than the
competitors. When competitiors are there they used to charge less comparatively. By early 1990s
atleast 2% to 4% of price diff exists b/w Walmart and its competitors.

Strategy known as National brand strategy -> Sales of Nationally advertised products . Launched “ Buy
American program” in order to increase the sales of US products.

Store Operations:

Lease 70% and rental the rest. Walmart stores open from 9a m to 9pm. On Sundays it is 12.30 to 5pm.
Some supercenters are 24X7. Improved communicagtions b/w stores happened which made to install
satellite system which helped to communicate easily.

Distribution:

Two step hub and spoke distribution center.

Walmart truck -> Merchandising center (distribution center) -> Walmart store. 80% of products are
supplied by distributors and the rest is supplied by suppliers. In bound technique was used to sold
inventory without wasting the inventory stay. Distribution center had worked 24X7.

Vendor relationships:

It took safe relationships with vendors. No child labour should be there. Centralized its buying from the
headquarters only. Installation of electronic data interchange (EID) to receive all the orders
electronically. Funds transfer also made easy. IT spending also improved. Not all suppliers realtionships
are successful.

HR Management.

Good management made it as one of the best companies to work for in America. Production,
marketing and distribution people are at good at work. Training programs were launched. Rewards were
given to associate and the employees. It had given options to purchase the stock from the Walmart.

Management

He was good as Walton. He was frugal innovator. He used satellite to talk to his employees which made
him in constant touch with others.

Diversification

He had brought diversified products selling. Opened up many merchandisers along with books, music
and Videos.

Sam’s Clubs.

Architecture , innovation and reputation are the sources of competitive advantage.

Walmart is playingon Architecture.

1) Please describe the sources of Wal-Mart's Competitive Advantage in discount retailing!

The global player Wal-Mart operates in 14 different markets all around the world, serving 176 million
customers every week. Today, the second biggest company of the world, concerning turnover which
amounts to 312,427 million US-$, categorizes its operational facilities into five divisions. Among those
divisions are the Wal-Mart discount stores, offering convenience and low-priced goods. Wal-Mart
supercenters are the biggest stores, being open 24/7 hours and employing a workforce of 350 people,
selling all kinds of groceries and general merchandise at the lowest possible price. Wal-Mart
neighborhood markets are specified in offering pharmaceuticals and fresh produce groceries such as
diaries and meat. The fifth category, the so called Sam's club stores are the biggest members-only
stores, offering goods in large volumes.
Wal-Mart started to build up its stores in smaller cities having a population ranging from 5000-25000
inhabitants, where hardly any other competitors were located. Consequently, consumers stopped
driving to other cities to do their shopping, but started to shop at Wal-Marts stores in their own towns.
By the mid 80's Wal-Mart had one third of its stores in regions where no direct competitors could be
found. The discount-retailer gained therefore more influence on the customer, eliminating the prejudice
that discount retailing is only possible and profitable in larger cities. Sam Walton strived for his vision to
offer his products and merchandise always below competition. The whole company was oriented to do
so from the very beginning as well as saving costs in all business decisions and areas. As a result out of
this policy, Wal-Mart was able to build up high amounts of monetary reserves to resist long-term price
conflicts with other competitors.
Concerning the merchandise, Wal-Mart allowed its store managers to find out which...