Walmart Strategy
Evaluate Wal Marts strategy in the discount retailing industry
Has Wal Mart attained a sustainable competitive advantage in the discount retailing industry?
Wal Marts strategy in the discount retailing industry is that they offer shoppers lower prices than anywhere else, and their goal is to keep retail prices low. This strategy of Wal Mart has made them one of worlds largest retail stores.
Sam Walton born in Oklahoma opened his first store in 1945, a small variety format franchised from Ben Franklin. He developed hi low price/high volume orientation from the manufacturers by trying to lower his costs of goods sold by ordering more merchandise directly from manufacturers. By 1960s, Waltons chain had become the largest Ben Franklin franchisee in the US. Walton then learned about development of discount retailers and opened the first Wal-Mart discount store with his brother. By 1980s discount retailing by large retail stores like Wal Mart, K mart and Target generated $66 billion in sales in the US. Wal Mart and other department stores decided to experiment by combining general merchandise and grocery items to make it a super center, by adding full line grocery stores and specialty departments.
In 2003, Wal Mart was the largest company and the private employer in the world. Wal Mart also uses electronic data interchange since the 1980s to communicate with suppliers by providing suppliers access to sales data for inventories of their products on store by store basis. This helps Wal Mart reduce both stock outs and overstocking.