1. Nature of the Business Environment
Wal-Mart delivers a wide variety of goods at competitive prices to add value and low cost its costs, making it the strongest company in the retail sector. Over the years, Wal-Mart has attracted the attention of many analysts because of its huge international success and its ability to target a wide demographic of shoppers. Wal-Mart is a discount retailor founded by Sam Walton in 1962. This Company has grown to be a retail giant with over 11,000 stores worldwide from Canada, Brazil, Argentina, UK, and China. When Walton initially founded Wal-Mart, his business strategy was to make everyday products available to ordinary consumers at affordable prices. Wal-Mart’s business strategy still remains the same: its main goal is to provide its customers with what they want, when they want it, and where they want it. This convenience is what made Wal-Mart an internationally recognized brand.
Wal-Mart is a huge retail powerhouse that is able to maintain its competitive edge by cutting costs and maximizing shareholder wealth. Wal-Mart’s strength is derived from its in-depth and diverse supply chain that has been recognized as one of the best business management control systems. The company competes by providing low prices made possible through comprehensive supply lines that allow managers to shop around for the cheapest prices when determining what goods should fill store shelves. Wal-Mart’s ability to efficiently use supply chain management has given them a competitive advantage over their competitors such as: Target, Costco, Kmart, Real Canadian Superstore, Dollarama, etc. All of these rival firms have similar corporate structures to Wal-Mart’s - Costco is a warehouse store offering wholesale products to shoppers while Target, Kmart, Superstore, and Dollarama are all similar to Wal-Mart with regards to retail operations. Wal-Mart, while competing, is able to achieve a faster inventory turnover rate to minimize its cost of holding inventory so that it can ultimately pass these savings onto its customers. (Appendix One)
Wal-Mart’s advantage is their supply chain management, allowing it to maintain “Everyday Low Prices”. Given the scope of Wal-Mart’s operations, management can shop internationally to find suppliers local and aboard to geographically target the demands of particular regions. Within the last decade, Wal-Mart got into the grocery and food industry so is now facing competition from Loblaws, Metro, and Kroger (Parent company of 15 food chains). Supplying markets with local foods, without having to purchase inventories that are less likely to sell, is a competitive advantage resulting from the effectiveness of Wal-Mart’s supply chain. The ability to use just-in-time deliver methods without over-stocking shelves in combination with an ingenious inventory tracking system allows managers to accurately forecast consumer demand and growth, allowing the company to remove products that don’t sell to...