Supply Chain Management
Wal-Mart is the world’s largest leading superstores company with huge growth in the market, where its secret of success is the supply chain management, in which it effective reduces the cost of doing business. On the other hand, the company has aneffective online system that shares real-time sales data with the suppliers in the market. Therefore, it has enabled Wal-Mart to reducecostas well as itallows thesupplier to produce the products as per the data shared with them. Similarly, the supplier knows what the demand of Wal-Mart is in the near future. Indeed, it knows how much inventory Wal-Mart has in warehouses and at stores.
Such an excellent information system has provided Wal-Mart the competitive advantage in the market over the competitors in the market. It also has its transportation network across its distribution centers and the stores around the US and the world. Similarly, the effective operations of the supply chain management of procuring and transporting of the products provide acompetitive edge. However, Wal-Mart was able to cut the cost due to itswidespread network of supply and transportation team, and it could be effectively reducing the cost of by benefiting from the economies of scale. Similarly, it was purchasing products in bulk quantity that reduced the cost of supply and transport, and suppliers also reduced the costs due to purchases of products in bulk quantity.
Furthermore, Wal-Mart’s supply chain management has been its competitive advantage. However, many other issues might lead to the inefficiency in future as the competition in the market has been increasing since many new and old entrantshave adopted old and refined techniques used by the retail companies in theworld including Wal-Mart’s. Thus, the competition in themarket is supposed to increase in the near future. Moreover, Wal-Mart has the proper information technology implementation in the organization to share information with the suppliers to maintain the sufficient amount inventory in the distribution centers at Wal-Mart.
Therefore, the increasing competition and aspreading network of the other retail stores around the world, includingthe US, might create inefficiencies in operations, as the customers might divert towards other competitors due to the competitive prices. However, if the company fails to realize that its inventory is increasing as compared to the sales growth annuallythen it could be determined that either Wal-Mart has excess inventory or demand in the market is declining.Therefore, it would result in lowering the prices of the goods that are already sold by Wal-Mart on premium discount or everydaylower price strategy.
Question 2: Are the company’s supply chain capabilities still a source of competitive advantages? Why or why not?
Supply Chain Capabilities
The competitive advantage refers to a distinctive competency as an advantage over the operations of the rivals in the market. Meanwhile, the operations might add value to customers, as well as would also benefit the organization. Similarly, Wal-Mart also has capabilities of the supply chain that are the still source of competitive advantage for the company as it has unique, well structured, and well-designed supply chain infrastructure supported by the information technology systems that work, and shares information with the suppliers……………………
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