The structure of the industry in which Walmart is in, is extremely competitive due to there being so many different retailers that offer similar products to the ones that Walmart carries in their stores. Walmart is known as a general merchandise store which is known as a retail store that sell dry goods, furniture, apparel etc.,.
Walmart falls under the hierarchical functional organizational structure which determines how the business is running and its activities to run as smooth as possible. Walmart works in a hierarchy form meaning that orders are implemented from up being the from supervisor to the manager to the employees and things are reported vice versa down up if something were to happen in the store. In order for Walmart to stay at top in the industry they must maintain all their goals and promises to their customers so that they can be able to return time and time again to continue shopping at Walmart.
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Five force analysis
- Walmart’s competitive advantage is their pricing techniques, for example: rollbacks, discounts, ability to exchange products, etc.
- Target and Costco have been trying to compete against, but Walmart has the experience and operational triumphs. There competition among other stores is medium level.
- They have utilized mobile apps, assortment advances, website improvements and inventory optimization. They have an improved supply chain that allows predictive analytics that serve clients by reducing expenses by merging truckloads, case and each movement. Their inventory placement provides Walmart with huge profits.
- New Market Entrants:
- Walmart is the largest in retail brands and would be hard for a new entrant to compete against it. This company has a unique supply chain and distribution system that took them experience and years to obtain what they currently have.
- Their price strategies have helped in building a large market share and this intimidates new market entrants.
- Walmart has had pressures against innovation and pricing strategies, but they tackle threats by lowering the fixed cost per unit and providing new services/products into the store.
Substitute Products and Services:
- Costco can be compared to their prices; however, customers are required to have a membership. Although, clients have turned to online retailers for their convenience, the low prices Walmart offers are incomparable.
- The price advantage Walmart has earned, allows customers to want to keep coming back. They are not only focused on the products they are selling, but on the service their employees are giving.
- Walmart’s initiative to comprehend the customers instead of being product oriented, has helped them survive among substitute products and services.
- The buyers are mainly for customers that do house shopping and not business’s purchases. Even though they have price advantage, the majority of individuals guide themselves for convenience products.
- The company constantly innovates new products with discounts that helps maintain customer’s loyalty in the long run.
- Basically, Walmart’s strategy to maintain customer’s is having a small and powerful targeted audience that will be faithful and in the long run increases their profits.
- Walmart is the largest retailer and has a high market share, Walmart has the advantage of switching from supplier to supplier without major expenses. Walmart’s position right now allows the company to demand its suppliers and they would agree to almost anything.
- They have built a productive supply chain among various suppliers that allows them to shift from one another. For instance, they have experimented with products utilizing different elements so if prices go up in a raw material then the firm purchase from another supplier.
Walmart’s Competitive Strategy:
- Walmart is the largest retailer, has a brand image and it has the power to control their suppliers. Their unique strategy, of price advantage sets them apart from other retail stores (“No one does better than Walmart” is there slang).
- It is in a strong competitive position in their industry, that as soon as customer scans a product they already have it back in the shelves for their inventory. Not only do they have price advantage, but their information systems are up-to-date with technology.
- They have invested greatly in technology that keeps track of sales and manufacture of products. Walmart has an upcoming technique of utilizing microchips that will be able to assist radio frequency distinction and improve the bar code method.
Wal-Mart’s Core Competencies:
- As promised in its slogan Wal-Mart has been providing products at lower prices, it is possible due to the low-cost operations. Wal-Mart share the value of low cost with customers by selling the products at lower prices.
- Hard working, efficient and process-oriented employees have been working with Wal-Mart.
- Better use of technology to directly connect with supplier and partners.
- Implemented just-in-time inventory process to reduce the cost of managing inventory at Warehouses.
In summary Wal-Mart core competencies are employees, cost efficient processes, and relationship with supplier and partners by using technology.
Strategy and Creating Value:
When it comes to their pricing strategy, Walmart has a commitment of “Everyday Low Prices”. The company focuses on adjusting their prices at a lower amount than their competitors. This is done by establishing an effective quality management relationship with all their suppliers. A customer can get a price match on their product if they were able to find it somewhere else for a lower price. This is possible due to the company constantly improving their operation strategies to save money and maintain low prices on their products while still making a profit.
Quality and Brand
Walmart ensures that the quality of their products is always at the best level. With products such as meat, fish, poultry, and ready to eat food, Walmart undergoes safety and quality control procedures to ensure that only high-quality products are sold. The retail company conducts business with suppliers that produce high-quality products. In addition, Walmart has their own Great Value brand, which was created to give customers low priced yet good quality items. It has been reviewed that customers ultimately prefer the Great Value brand over the other generic brands.
Wal-Mart’s Information Technology:
Online Shopping with pickup Walmart.com
Online-only items that are shipped to any Walmart for pick up are now eligible for discounts on about 10,000 items. This is called the “Pickup Discount” The discounts range from just a few dollars to $50.
Walmart’s app is ranking among the top three retail apps with twenty-four million people using it daily. A customer can refill prescriptions, buy groceries and even investigate her best friend’s baby shower registry. Customers can pay online and receive their e-receipt right on their phone. Savings Catcher is also available through the Walmart app where if a competitor has a lower advertised price on something she just bought, shell get that difference back rate on a gift card.
Website Improvement – Walmart.com
- Has come up with a responsive design that will allow any device to be compatible. Recent data shows that almost 15 percent of transactions on Walmart.com occur across multiple devices. The new and improved website will be much more personalized. Shoppers will soon see top-selling items on Walmart.com based on their locations. They will also see a profile of their local store, telling them if that store has online grocery or easy reorder, for example.
- Walmart is ahead of the industry and will be one of the top companies worldwide. Walmart will continue to embrace the future and trying to accelerate growth on the existing sites.
- Walmart will not have any technology innovations which may impact the company.