Supply Chain Analysis Of Wal-Mart

Register to read the introduction… The distribution is imperative to the firm because it wants to ensure that there is as much in-stock availability as possible. The first and main distribution center for Wal-Mart is located in Bentonville, Arkansas. A benefit Wal-Mart has is that the company has great power over its 40,000 suppliers (out of these 40,000, 200 are key suppliers), and soon after the opening of the distribution center in Bentonville, suppliers located nearby to support the company.
Each store that was opened was directly because of the distribution strategy—the criteria for stores’ locations were that it should be low rent, suburban area, and on or very close to a highway. This keeps the costs low and distribution much more easily possible. This was a great strategy to have because, as Wal-Mart became more and more prevalent in the industry throughout the 1980s, “By the time the rest of the retail industry started to take notice of Wal-Mart… it had built up the most efficient logistics network of any retailer” (Mark,
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Global Sourcing involves changing to the way Wal-Mart procures its products. The company has made a partnership with Li & Fung to manufacture Wal-Mart products, in lieu of just purchasing certain products from random factories. This will save the company time and money. Project One Touch focuses on optimizing product delivery. The goal of this initiative is to have a great increase in on-shelf availability. So far, this project has shown that the shelf availability has increased by 5.7% to 93%. The Multi Channel Strategy now allocates a broader selection of products that are exclusively on Wal-Mart’s online store, to then promote online shopping, reacting to the booming online shopping market, like Amazon.com. These strategies are new, so it is hard to see the outcome, but so far it seems like these implementations have made a good impact on the company.
Wal-Mart differentiated itself from the startup by using EDLP, and should continue to use this pricing strategy. Wal-Mart stores are known for its low prices, and redefining the company by changing the prices and qualities of its products (like implementing a hi-lo pricing strategy) would be a long and difficult thing to do, and a majority of customers would not be happy with the change. Although the trends have changed and discount retailing may not be the most popular next to online shopping, Wal-Mart needs
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Although the attempt of the smaller store formats, similar to one of the dollar stores’, was a failure, maybe the company can try to make smaller stores that only offer food and groceries, other than just offering the food in a large warehouses where you can also buy clothes and TVs. Putting Wal-Mart food stores in lower income neighborhoods could increase the firm’s profit considerably, as it would be something similar to Kroger and Shop Rite. The prices of food would remain low, but the range of food could have an endless possibility. Wal-Mart could focus on the variation of food the stores could have. The first few food stores can be located very close by to the “high velocity” food distribution centers, making it easy and inexpensive to deliver the products to the new grocery stores. If the stores make an impact and increase sales, Wal-Mart can plan on the growth of these grocery

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