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Walmart Around The World-10!13!2014
Walmart Around The World-10!13!2014
Walmart Around The World-10!13!2014
Question 1.
We assume you have already been familiar with Walmart's sources of
competitive advantage in other classes or references. Could you summarize
Walmart's competitive advantages in U.S. and its business model?
We have studied before the supply chain of Walmart and how it led the success
in America. We believe Walmart's success accounts its greatest portion for its excellent
operational management, which is in other sense its competitive advantage.
First of all, the business strategy of Walmart is "Every Day Low Price (EDLP
strategy)", which attracts customers by offering the products with the lowest price. Its
fuctional strategies are exceptionally well-aligned to EDLP. Thus their strategies are
strategically fit.
In terms of the supply chain, Walmart shows an efficient supply chain. It has
relatively little variety of products (less customized), longer production lead-times, high
set-up costs, and larger batch sizes that allow the firms to supply at a low unit cost. The
six major drivers (facility, inventory, transportation, information, sourcing, and pricing)
and their roles are also critical in creating this characteristic. For instance, Walmart has
purchased and been operating its own logistics system (transportation driver), and could
take advantages in terms of inventory costs. All the supply chain factors of Walmart
mesh perfectly well together to lower its supply costs and thus enable the EDLP strategy.
Question 2.
Evaluate Walmart's globalization strategy over the last two decades. Where
did Walmart struggle? Where did it do well? Can location characteristics
explain the differences in Walmart performance? What are the location
characteristics that affect its performance?
Our team has summarized whether Walmart has struggled or succeeded in
different countries (we scored them in a 5 points scale), and the characteristics of these
locations on the table below. Some explanations are also followed by.
Country
Success
Location Characteristics
/Region
Score
/Walmart's strategies
Mexico
country
Canada
Argentina
Brazil
Brazil
China
Competitive Market
South
Korea
UK
Japan
Central
America
Chile
Africa
Service-oriented
Competitive Market
Loose competition
Lack of infrastructure
Corrupted government
Question 3.
What are your team's recommendation to a company which is researching any
global operations in the retail industry?
Our recommendations to global operations in the retail industry are shown below
in regarding to the four location characteristics that affected the performance of
Walmart.
Characteristic
Detailed recommendations
s
Social
Cultures
Geographical
Features
Political
Factors
and local regulation are favorable to entry and operation. (ref. Mexico
case)
Industry
Status