8/10/2019 Wal-Mart Group 3 Sec-E
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GROUP ASSIGNMENT
WAL- MART STORES DISCOUNT OPERATIONS CASE ANALYSIS
---submitted by GROUP 3, PGP-1, Sec-E
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Wal-Mart Stores
Was incorporated in 1969, although was rooted in the variety
store that was opened in Newport, Arkansas, in
1945
Consistently led other discounters in both profitability and
growth Operated 859 Discount city stores with distribution centers
in five locations Wal-Mart pioneered in creating fit among
different activities and doing activities better than its
rivals
According to Michael E. Porter
Strategy is
Creating a unique and valuable position by involving different
set of activities than competitors Making trade-offs in competing,
choosing what not to do Integrating and coordinating activities and
creating a fit among them
Wal- Mart s Strategy
Following are some activities/characteristics of Wal- Marts
which were unique and different than its
competitors:
o Purchasing and Distribution: Using a central computer system
it linked its purchasing and distribution activities Developed a
reputation for bargaining very hard with the vendors. Unlike some
other discounters
Wal-Mart took no more than a fifth of its volume from any one
vendor. No vendor accounted for
more than 2.8% of the company's total purchases
o Store operation: Wall-mart focused on sales of hard good,
unlike its competitors who has a greater percentage share
of soft goods in the net sales. Hard goods were more profitable
in terms of sales per square foot
The Wal-Mart system included over 70000 stock keeping units - a
larger number than most other
chains because Wal-Mart was the primary source of merchandise in
many of the rural communities it
served
Led the industry by installing a computerized system to track
inventory. To improve its reaction time
in adjusting inventory it set up a satellite network
o Marketing:
Was very competitive in terms of prices. Its store manager had
more latitude in setting prices thandid their counterpar ts in
centrally priced chains.
Wal- Marts promotional strategy was governed by its philosophy
of everyday low prices no questions asked policy on returns
