walmart Essay -- essays research papers

Describe the record of the industry in which Wal-Mart contestsThe discount retailing industry, in which Wal-Mart competes, suffered slower gain in industry sales and in new store increases by reaching maturity. This resulted in a shakeout that has left the industry very concentrated. These trends argon likely to continue due to intensified competition driven by companies seeking to expand market share by gaining efficiencis and economies of cuticle in distribution and purchasing. Indeed, in 1993 the top 5 discounters accounted for over 70% of supply industry sales. Consequently, barriers to entry are tall. Other barriers to entry include the high capital expenditure requirements of leasing or buying the stores promotional costs Brobdingnagian capital costs of leasing or buying warehouses and distribution channels in order to buy and store the product costs of preparedness and hiring the work-force to nominate high-quality customer service. Finally, the threat of subsitution is high, for all the merchandize is readily avail adequate at many a(prenominal) types of stores this reinforces the need to compete on prices, costs and customer-focus. As growth in this industry slowed securing more market share is the critical way to compete as only then are you able to leverage your economies of scale to build cost advantages.The nature of Wal-Marts competitive priorities are found on the foundational of minimizing all its costs vis--vis its competitiors so that it may provide the last(a) cost merchandise, and thereby boost its market share. Wal-Mart aims to differentiate itself, and enhnce its competitiveness, by making technology, its advanced computer and telecommunication system, a core competency. This nourishment of superior technology greatly enhances Wal-Marts ability to focus on build and maintaining relationships with its customers, suppliers and employees for example, it cuts down on unnecessary large inventory levels and enables intimate and by the way contact with suppliers. Wal-Mart further competes on cost, value of the dollar philosophy, and also carrying out quality, by adding value through its training program and its corporate grow which increases customer satisfaction. However, Wal-Marts management which initially portrayed itself as the terminal cost provider had to change this policy partially because it becam... ...r relative to its suppliers, Wal-Mart was able to implement and enforce radical cost-cutting measures these included saving realized by eliminating manufacturers representatives from negotiations with suppliers by making its vendors pay for communicating expenses. Wal-Marts decentralized, incentive driven corporate cultural program is also a major asset in reducing costs for, despite non-unionization, employees assist in realizing savings and in keeping shrinking costs under their competitors. This program also raises employee satisfaction, and probably reduces employee turnover (thereby redu cing costs for training new workers), and boosts customer satisfaction. Wal-Marts hihgly-automated two-step hub distribution network, involving greater supplier participation, and usage of techniques such as cross-docking enabled the company to utilize even faster inventory control (resembling a manufacturing firms JIT). Finally, even the placement of the distribution centers and stores, which were grouped together, enhanced the hie with which inventory was managed. It also meant that trucks could be used which further reduced costs and increased reliability and speed of service.