Case Study

On

Capacity Planning and Management

By

Vikrant Sehgal

A2325013007

MBA Class of 2018

Under the supervision of

Dr. S S Pal

Assistant Professor

In Partial Fulfillment of the Requirements for the Degree of

Masters of Business Administration

at

AMITY BUSINESS SCHOOL

AMITY UNIVERSITY UTTARPRADESH

SECTOR 125, NOIDA-201303, UTTARPRADESH, INDIA

Q1) Appraise how Walmart is using scale efficiency of its capacity to compete in the US food
market.

Ans) Walmart usps:

1. Walmart has a strong global presence across the world

2. Walmart attracts consumers as very less prices offered as compared to competitors

3. Well-developed supply chain and multiple supply of raw material from many vendors

4. Economies of scale so cost of production is very less

5. Wide network of Walmart stores and therefore it is accessible to all types of individuals

6. Walmart has 11,500+ stores in 28 countries

7. Over 2.2 million people are employed with Walmart

8. It has private brand labels, customer loyalty programs etc.

9. Excellent website means consumers can shop online

Q2) a) Justify why Walmart is pursuing its neighbourhood markets strategy?

Ans) Walmart opened its first neighbourhood market in Rogers, Arkansas with a size of
40,000 square feet. Walmart pursued this strategy to compete head to head with traditional
supermarkets that dominated the cities as earlier Walmart supermarket proved too big to
customers to handle and profits were low.

There are a number of reasons why Neighborhood Market has found success:

i) Grocery now makes up the majority of Walmarts U.S. segment, and it's been its
best performing one in recent years.
ii) Wal-Mart began its life catering to rural customers and has long struggled to
penetrate markets. Wal-Mart's Neighborhood Markets can also take advantage of
food deserts in such environments, neighborhoods where residents have little
access to fresh food.
iii) Wal-Mart has the ability to create a low-priced supermarket chain that is hard for
competitors to match.

b) Is it the case of capacity answering business strategy or business plan answering

capacity constraint or something else together?
c) Explain
Ans) It is the case of capacity answering business strategy because Walmart limited the size
of supermarket to no more than 200,000 square feet. Thus allow the company to find sites in
built-up areas. Also, Walmart harnessed the same buying power and supply chain efficiency
that enables it to offer food at prices 10-15 percent cheaper than competitors. Its aim was to
provide convenience.