SUPPLY CHAIN MANAGEMENT AT WAL-MART Case Solution
These websites serve the buyers and customers in the form of e-stores and provide added continence and luxury to the customers and this is something that they can use as their competitive advantage over the traditional mass merchandisers such as Wal-Mart. Therefore, the threat of substitutes is quite high.
BARGAINING POWER OF CUSTOMERS:
The company operates in multiple markets in the developing and the developed regions of the world. These markets in which the company operates are spread in over 15 countries all over the world.
The customers in these target markets of the company have diverse culture, tastes and preferences and due to this reason their demands are also quite diverse. Apart from this,there are several other large scale retailers and merchandisers who are also operating in these markets and this significantly empowers the customers in these regions.
They have multiple choices to go and shop from therefore, all the mass retailers shape their policies and strategies to attract more and more customers by addressing their needs and demands. Due to this reason, the bargaining power of the customers is quite high for Wal-Mart.
BARGAINING POWER OF SUPPLIERS:
The bargaining power of customers is quite low as it has been studied from the case study that the management of Wal-Mart tries to dictate and influence the workings and operations of the suppliers that are contracted with the company.
Wal-Mart is the leading and most dominant retail company of the global retail industry in terms of the revenues and operating margins that it generates from the markets where it operates.
This gives an added advantage and leverage to the management of the company when negotiating with the suppliers for the contracts for supply of products to the company at a time place and price of their choice. Due to this reason, the bargaining power of the suppliers of the company is quite low.
The competitive rivalry in the industry and the competitors’ threat for the management of the company is quite high as the competitors of Wal-Mart have also expanded with the innovative techniques and practices of Wal-Mart.
The competitive edge that the management of the organization has long sustained and the business has enjoyed is fast disappearing. The business has also lost some of its market share that it has long enjoyed to some of the competitors in the domestic as well as the overseas markets including Germany and U.K and this is a cause of concern for the management of the company.
VALUE CHAIN ANALYSIS:
The value chain analysis of the company reveals that an effective supply chain management is the most critical success factor and advantage for the business and the management of the company in order to maintain their lead and dominance over the competitors in the global retail industry.
The business has traditionally adopted and implemented impressive supply chain management systems based on the policies and practices of systems based on innovation and latest technologies. This has facilitated the business to gain a major competitive advantage over the competitors in the industry and is one of the critical success factors for the business in the markets.
The business also has an added luxury of its own distribution fleet for the stores and retail outlets of the company and all the major urban and rural markets of the region where it operates are also extensively covered through this impressive distribution network. Almost all of the retail stores and chains of the company are with in 24-hours travel distance from the warehouse of the company.
This allows the organization to supply products to the stores more feasibly and swiftly as compared to its competitors whose distribution networks are thinly stretched all over the country. All this has been ensured while keeping the cost of sales of the organization to the lowest levels than any of its rivals in the industry……………..
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