Walmart Case Study Analysis Essay

1848 Words Aug 14th, 2016 8 Pages
For decades, Wal-Mart has held the title of the American retailer (although it is international) where people can get products for the lowest price possible. As the world’s largest retailer, Wal-Mart has been looked at as a role model for many competitors who desired the profits Wal-Mart has received in past periods. The founder, Sam Walton, began to design his stores in 1962 to the have everyday low pricing (EDLP) method, opposed to the popular at the time hi-lo pricing. Lucky for Walton, throughout the late 1900s there was a great trend in discount retailing—buying in bulk at a lower price, which EDLP catered to, making Wal-Mart the leading retailer. The firm also strides itself on its efficient strategies in its supply chain, …show more content…
These techniques were very innovative at the time, and Wal-Mart was always able to come out on top because of the advanced supply chain strategies no other competitor could compare with, until it would copy Wal-Mart.
Distribution is arguably the most effective aspect in Wal-Mart’s supply chain. 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

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