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Walmart Case Essay

552 words - 3 pages

WAL-MART Strategy

• Focus on low costs

o They sell office supplies like Office Depot, electronics like Best Buy, and hardware like Home Depot, but do not offer as wide variety as other competitors.

Wal- Mart approach is based in

• Economies of scale.

o Wal -Mart lower costs by purchasing larger quantities. They distribute these products efficiently to a large number of stores strategically located to minimize transportation and related costs.

Strategies to Confront Wal-Mart Threat (based on the 4 key success factors in Strategy)

1. Long Term Objective

a. Company´s mission, in our case Carrefour´s mission.

2. Knowing our limitations

a. We might not have the same budget as WM but we can compete on quality, service, and convenience.

3. Knowing our competition (WAL-MART, ...view middle of the document...

4. Effective Implementation

* Strategy 1: Focus--Low Costs

• We could market only a limited number of products to a highly defined end user.

• We could save costs

o If customers bag their own groceries or bring their own bags.

o Different use of its shopping (insert a quarter to unlock a cart from the interlocked row of carts located outside the store entrance. The quarter is returned when the cart is locked back into the group. As a result, no employee time is required to collect stray carts unless a customer is willing to forego the quarter by not returning the cart.

o To open stores in urban areas rejected by Wal-Mart and offering the same prices.

o Other benefits for example: Easy parking unlike the difficult parking of WM.

* Strategy 2: Focus--Differentiation

• We can compete perhaps not in price but on other important factors such as quality, selection, convenience, and service. ( according to online info there is increasing evidence that a number of Wal-Mart's smaller rivals are employing this approach effectively against the big box (McWilliams, 2007a). because consumers are willing to pay a higher price for a product similar to one offered by WM if they believe that other factors--quality, convenience, location, service, favorable terms, etc.--compensate for the higher price.

• Specialization Wal-Mart is able to carry only high-demand products so we could sell specialized product lines that WM doesn´t.

* Strategy 3: Added Value

For example: "Wal-Mart might offer a better price, but we offer a better value."

• One way to improve our value proposition relative to that of Wal-Mart is to add relatively inexpensive features or services when they increase the perceived value of the offering considerably, especially when Wal-Mart is not in a position to integrate a similar approach.

For example, the napkin offered by the lady in a Mexican restaurant, this subtle behavior added extra value with low cost.

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