Neighborhood markets: A crucial thing that Walmart has always focused on is addressing consumer needs on a larger scale and without compromising on convenience. It is buying a controlling stake of roughly 77 percent in Indian e-commerce brand Flipkart to penetrate the Indian market. Cost leadership strategies are implemented by Walmart and it helps to offer many different products or services at a lower price than their competitors. Wal-mart’s cost leadership strategy 1962, Sam Walton starts WAL-MART In 5 years expanded to 24 stores revenue more than 12.6 million in sales 1972, listed in New York Stock Exchange MARKETS OF WAL-MART (2003) o Total Sale of Wal-mart o Total Retail Area o Total Employers US $ 313 Billion 663 Million Sq.ft. They are 106,000 square feet in area and these stores are brightly lit, well arranged, and good looking shopping spaces focused at maximizing shopping pleasure. In 2017, the retail giant had total 11,695 stores of which 6,363 were located overseas and 5,332 were located in the United States. To achieve its mission, Walmart applies cost leadership strategy. The shipping centers employ more than 600 people each who upload and unload more than 200 trailers every day. Inventory management is a crucial part of managing a great retail system. Walmart has also kept six disaster distribution centers that are placed strategically across the US and are stocked well that in case a natural disaster happens, help can be sent without any delay to the communities. Walmart’s more than 150 distribution centers have played a central role in strengthening its business. While smaller in size compared to the two previous formats, the neighborhood markets still cater to several important needs of the community. concepts including discount stores, Supercenters, Sam’s Clubs and Neighborhood markets. All Rights Reserved. WalMart’s strategy in cost leadership Efficiency in operations and distribution strategies: OD strategies have helped WalMart achieve low prices- WalMart opens the stores outside of large cities and within 200 miles of existing stores. Seventeen years later, annual sales topped $1 billion. The brand employs around 2.2 million workers whom it calls associates. So, Walmart advises its drivers to follow the most efficient routes. According to Jhon Steen (2009), in order to accomplish such prices, Woolworths focus on two main points: Logistics and Economics on Scale. Prices can be an important differentiator and cost leadership is the biggest source of competitive advantage for Walmart. This makes the company best placed to survive a price war and generates … Now, Walmart is looking for more growth and a larger share of the retail pie in the US as well as abroad. This network of Walmart’s distribution centers ships general merchandise, dry groceries, perishable groceries, and other specialty categories to its consumers daily. This strategy can be highly successful; however it is very difficult to employ as it requires minimising costs and passing the savings to the customers. Now, there are hundreds of them operational throughout the U.S. Walmart has also advanced boldly into e-commerce. From 2005 to 2014, Walmart achieved 87.4% higher efficiency for its logistics fleet. By bunching stores together in … Moreover, India has a very large retail market and plenty of scope for Walmart. This easy sharing of data is enabled by the private satellite system Walmart owns. Researchers often highlight the role of innovative supply chain management in retail. Sam’s club is an important brand of Walmart of which 650 are in the US and 100 in foreign nations. This way, it achieves three things – minimum wastage of time by driving minimum empty miles, low fuel consumption and maximum merchandise delivery with least environmental impact. It owns a private fleet of trucks and employs a team of skilled truck drivers. He graduated with a Hons. To continue to thriving, Overall Cost Leadership Porter defines “Overall Cost Leadership” as the strategy in which a company differentiates from others by having the lowest prices of the market. It has also increased its hourly wages for employees and improved work conditions. © Copyright 2020 Heartrepreneur® LLC. Thus, size and scale have helped Walmart achieve a strong competitive advantage. The situation has grown a lot better after Walmart made changes to its HR strategy. Firm ’ s obsession with lower prices parts of the biggest source competitive! Market share away from its suppliers helps manage a better inventory management system “. 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