Wal-Mart’s Strategy Article Review
Wal-Mart is internationally known because of its main goal to provide goods that will be affordable for everyone. It increases annually the amount of stores built out of the USA, but stays as a leader inside the country too. Its supply chain strategy has helped to attract more customers because of the high quality and big quantity of various products. In addition, Wal-Mart has developed its online store structure that allows keeping a track of changes in the customers’ demands.
The half of Wal-Mart’s stores is not located in the USA. This international business plans on building about 60% of the new square footage abroad. Wal-Mart is going to create 500,000 job opportunities out of the USA to attract not only foreign customers, but also productive professionals. According to the statics on 21 February 2013, the revenues of Wal-Mart’s international stores have increased by 15% every year. These methods of the international spread are viable because Wal-Mart Stores, Inc. as one of the most known and successful multinational retail corporations can afford building new stores abroad. The company has a good financial base to manage them. Wal-Mart attempts to hire more foreign workers because it will decrease the unemployment rate and increase the demand for more professional employees. My business sells the HVAC equipment. I think it is going out of the USA and can be risky because of its price. However, if I go for this, my company will become international and attract more customers triggering more sales.
Wal-Mart’s Stores, Inc. has developed the supply chain strategy that has four key components: vendor partnership, cross docking, distribution management (technology) and integration.
- Firstly, Wal-Mart searches for the partners that can satisfy the huge demand and provide low-price products. It offers its partners the potential for the high volume and long-term purchases.
- Secondly, Wal-Mart practices the cross docking when products shipped to the warehouses do not remain there for a long period of time. Lastly, Wal-Mart widely uses technologies.
It has developed the largest information technology infrastructure. I support the strategy of cross docking because it keeps inventory and transportation costs down, and reduces the time of the products’ transportation, which decreases the prices in Wal-Mart. Additionally, I think that the technological infrastructure would be useful for my HVAC equipment selling the company too because it can accurately forecast the customers’ demand, create efficient routes, and manage response logistics. This all impacts the popularity and growth of my company.
Wal-Mart Sales, Inc. has greatly increased its sales offering customers the opportunity to shop online. In order to stand out among all other stores that also provides such ability. Wal-Mart is going to build more warehouses where it will keep products only for online orders. It will build the e-commerce distribution centers. Right now, Wal-Mart allows customers to order online and pick up in the stores. This year, it plans on testing this concept not only in 35 stores as it did last year, but already in 50. I think that the tactic of building warehouses to keep products only for online orders will decrease the shipping price and attract more customers. I am sure that if I do the same with my company it will be easier to manage online and in-store purchases of the HVAC equipment.
Using the missions, strategies and tactics of Wal-Mart, I would bring my HVAC equipment on the worldwide market and increase the output. The opportunity to shop online would attract more customers living far away from my stores. If I built more warehouses only for the products ordered online, the price of shipping would decrease. Thus, more customers would buy my HVAC equipment; thus, my company would stand out among competitors.